hrydz
17.01.06, 20:42
Pipe down
Jan 12th 2006
From The Economist print edition
The explosive political fall-out from the Russian-Ukrainian gas deal
AFP
Pressure points IS A bad deal worse than no deal at all? That is the question
facing Ukraine, which last week won a six-month reprieve on Russia's plans to
quadruple the price of the gas it supplies. Yet opposition parliamentarians,
led by a fiery ex-prime minister, Yulia Timoshenko, say that the deal, which
will raise the price of gas from $50 per 1,000 cubic metres to $95, is still
too expensive. This week they peremptorily voted to dismiss the entire
government.
That sounds like a dramatic setback. Since the 2004 “orange revolution”, the
pro-western government of President Viktor Yushchenko has been losing
credibility both at home and abroad. Russian influence, which crashed after
the Kremlin clumsily backed a rigged presidential vote in November 2004, has
been returning. The row over gas was a sharp reminder of Ukraine's continued
dependence on the goodwill of the country's northern neighbour.
But the government is not dead yet. The legal status of the parliamentary
vote is unclear. Mr Yushchenko, who this week called the
decision “incomprehensible, illogical, and wrong”, plans to challenge it in
court. Most observers expect the government to last until the next election,
which was anyway due in March. It is unlikely that any political group will
have an overall majority after the election. Ukrainian politics will continue
to be a story of horsetrading, in which big business, and Russian money, will
play a role.
Perhaps the hardest question for a new government will be whether Ukraine can
diversify its sources of energy. The new deal with Russia foresees extra
deliveries from gas-rich Central Asia—but through Russian pipes, and handled
by Rosukrenergo, a murky intermediary company of the kind much favoured by
Russia's gas tsars. It might make sense to back a new gas pipeline from
Central Asia across the Caucasus that would be independent of Russia. But
such action would require a strong, far-sighted government, of which there
seems little prospect as yet.
