28th May 2022

Ukraine's iron lady returns amid gas talks

The pro-western parties of Viktor Yushchenko and Yulia Tymoshenko have signed a coalition deal to reinstall "iron Yulia" as prime minister of Ukraine, amid sensitive Russian gas talks which could impact the EU.

The move is a throwback to 2004, when the pair toppled the country's Soviet-type regime in the Orange Revolution - an event seen by Moscow as covert US and EU encroachment into its sphere of influence.

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Ms Tymoshenko, who earned her nickname as a shrewd political player in a man's part of the world, has remained an outspoken critic of Russian president Vladimir Putin ever since.

Her new government will have a wafer-thin majority of just two seats in parliament and face powerful opposition from outgoing, Russia-friendly prime minister Viktor Yanukovych.

The pro-Orange switch comes amid talks over 2008 Russian gas prices, with supplier Gazprom saying Ukraine will have to pay more due to rising prices for Turkmenistan gas, which feeds into the Gazprom system.

One Ukrainian expert told Reuters the country could absorb hikes from the present level of $130 per thousand cubic meters to $180 but that $200 "would be a nightmare" for the economy.

A Russian diplomat in September said the new price could be linked to the nature of Ukraine's new government, while Ms Tymoshenko has in the past accused Moscow of using energy to manipulate the post-revolutionary state.

Gas price haggling with similar political undertones in the winter of 2005 saw Russia briefly cut supplies to Ukraine - which transits 80 percent of Russian gas to the EU - sending shockwaves through the European energy sector.

The current rhetoric is cool by comparison, but acting Ukraine economy minister Anatoly Kinakh on Wednesday warned that Ukraine may ask higher transit fees from Europe to offset any Gazprom hikes.

Meanwhile, Gazprom deputy head Alexander Medvedev on Thursday gave reassurances, which at the same time conjured up the ghost of winter 2005.

"If the Ukrainian side meets all its obligations...then there is absolutely no risk as far as Europe is concerned," he said, Reuters reports.

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