Victory: Tymoshenko

KIEV, Ukraine — In the ongoing blood sport that is Ukrainian politics, Prime Minister Yulia Tymoshenko appears to have scored a key victory over her political rivals — especially President Viktor Yushchenko — in reaching a gas agreement with Russia last week. But analysts say the battle among the country’s ruling elite is far from over, and could spell further instability in the coming months.

Millions in eastern Europe were stranded without electricity and heat just after the new year, when Russia cut off all gas deliveries through Ukraine because of a pricing dispute (about 80 percent of Russian gas headed for Europe traverses Ukraine). Tymoshenko traveled to Moscow Jan. 17, where she and Vladimir Putin, her Russian counterpart, held an all-night session behind closed doors, during which they hammered out an accord that permitted shipments to resume. 

Under the accord, Ukraine agreed to pay $360 per 1,000 cubic meters of gas: The amount was 20 percent less than what Moscow was aiming for, but was significantly higher than the $200 that Kiev wanted. At the same time, Ukraine agreed not to raise Russia’s transit price.

Observers took note that it was the two countries’ prime ministers — and not their heads of state, Yushchenko and Dmitri Medvedev — who were tasked with, or more likely took on the responsibility for, brokering the deal. Equally significant was the fact that the two leaders seemed to work well together, a remarkable development given both the acrimonious atmosphere that had characterized the gas dispute and relations in general with the Ukrainian president.

Tymoshenko "has added to her image as a ‘can do’ leader,” wrote Christopher Weafer, chief strategist at the Russian bank UralSib.

“Tymoshenko was the winner,” agreed Mikhailo Pogrebinsky, director of the Kiev Center for Political and Conflict Studies. “She showed herself to be a more acceptable partner for Russia — one with which it is difficult, but in the end possible, to reach agreement.”

Pogrebinsky and others also said that Tymoshenko strengthened her position by apparently eliminating RosUkrEnergo — which is owned by Russian gas giant Gazprom and two Ukrainian businessmen — as the intermediary company that sells Russian gas to Ukraine.

RosUkrEnergo’s activities are highly opaque, but analysts believe — without any documentary proof — that the company, which enjoyed vast profits from its middleman position, is linked to Tymoshenko’s political rivals. By removing it, Tymoshenko has simultaneously added an element of transparency to the Ukrainian gas trade and possibly starved a major source of financial support for her competitors.

“Tymoshenko came out of the tawdry affair looking better than President Victor Yushchenko,” according to an editorial in the English-language Kyiv Post. “He  emerged from the deal looking like an incompetent, corrupt bumbler who got caught  trying to prop up the shady RosUkrEnergo for reasons of personal gain.”

Tymoshenko’s victory may be fleeting, however. The ink was scarcely dry on the agreement before knives were drawn among the Ukrainian political elite, pointing towards further infighting and possibly political deadlock. Oleksander Shlapak, Yushchenko’s economic aide, said that the deal might have to be re-negotiatiated. And the president himself lashed out at Tymoshenko, albeit without mentioning his one-time Orange Revolution ally by name.

"We must not blindly believe alluring promises,” he said. “We must not blindly believe politicians who, within an instant, betray the national interest.”

The prime minister gave as good as she got: “I believe that if the president could have secured better conditions, there was no one to stop him.”

Tymoshenko, 48, is a controversial figure in Ukrainian politics. She is a striking figure who sports a halo of blond braid wrapped around her head — almost giving her the air of a mythical heroine. Some supporters practically worship her. Her critics, meanwhile, claim she is corrupt and voraciously ambitious, and point to her extensive involvement with the country’s energy sector, both as a businesswoman and as government deputy minister. She is sometimes referred to as the “gas princess” or “Lady Yu.”

She is also the political leader most closely associated in the public mind with the economy, and as the country’s financial woes deepen, she may suffer for this. Analysts anticipate political and social unrest in the spring.

“The most important issue at the moment is the economic crisis,” said Volodymyr Fesenko, director of the Penta Center for Political Studies. “Tymoshenko’s victory may be relative and short-term.”