Ukraine: Home fires carry on burning as presidential rivals bicker over policy

[Harold Schiffman]

Home fires carry on burning as presidential rivals bicker over policy

Tom Parfitt The Guardian, Friday 2 January 2009

Cutting off Ukraine's gas supply with temperatures in Kiev hovering at
-3C (27F) may sound dramatic but it won't leave people shivering in
their apartments just yet. Naftogaz, the state gas concern, has
squirrelled away 17bn cubic metres of reserves in underground storage
facilities, and RosUkrEnergo, the trading company which acts as an
intermediary with Russia's Gazprom, has another 11bn put aside.
Experts say that is enough for at least three months of internal
demand.

"I don't think we'll freeze," said Anna Shafarenko, 60, a factory
worker from Obukhov, 25 miles east of Kiev, who lives with her
husband, Vassily, in an apartment with gas-fired central heating and a
gas cooker. "Our leaders have promised they will find a solution to
the dispute and so far we believe them." Yet, while it will not stop
Ukrainian mothers frying eggs, the gas dispute with Russia is another
stake in the heart of a deeply troubled country.

Fragile relations between the former Soviet states slid to a new low
earlier this month, when the Kremlin accused Ukraine of sending
specialists to man anti-aircraft missile systems aimed at Russian
planes during the war in Georgia in August. Moscow is also furious at
Kiev's attempts to join Nato. "It's political," said Shafarenko.
"Russia wants us to pay a high price for its gas because it can't
accept that we are a separate country with our own interests. They
think they should control us just like they did in the past."

The stand-off with its northern neighbour could not come at a worse
time for Ukraine's economy, which the global financial crisis has
already brought to its knees. Ukraine was forced to seek a $16.4bn
bailout loan from the International Monetary Fund in November as
industrial output plummeted. Its steel and chemicals industries are
heavily reliant on affordable gas. An exacerbating factor is the
dispute between the president, Viktor Yushchenko, and the prime
minister, Yulia Timoshenko, who are expected to vie for the presidency
in elections next year.

The former Orange revolution allies have accused each other of
mismanaging the country and their strategies for how to deal with the
gas crisis have diverged sharply. Timoshenko has campaigned for the
removal from the trading process of RosUkrEnergo, an intermediary
company, joint-owned by gas trader Dmytro Firtash, which she calls a
"criminal enterprise". Last month the prime minister raised hackles
when she called for Yushchenko's resignation, saying he and Firtash
had conspired to profit from bets against the Ukrainian currency, the
hryvnia. Both men vehemently denied the charge. On Tuesday Firtash
promised to sue Timoshenko for libel and claimed she was "exacerbating
the current economic crisis and sowing panic among the population".

Timoshenko, once nicknamed the "gas princess", made her own fortune in
the 1990s when she was briefly head of United Energy Systems, another
company that imported Russian gas. She has always styled herself as a
Ukrainian patriot and refuses to speak to foreign reporters in
Russian, a language she knows well. But her opposition to RosUkrEnergo
puts her closer than Yushchenko to Gazprom, which has also called for
the Ukrainian intermediary to be removed from the trading process.
Ukrainian media reported yesterday that she had planned to fly to
Moscow for talks but the president thwarted the trip, perhaps fearful
she would strike a deal and steal the limelight.

Many Ukrainians have lost interest in such intrigues. They feel jaded
by the constant political eruptions and repeated arguments with
Moscow. "I wish that they could sort out something sensible so that we
didn't reach the end of the year with this whole show and these cries
of debt, debt, debt," said Yury Peresyolkov, 30, an IT teacher from
Kharkiv in north-east Ukraine.

http://www.guardian.co.uk/world/2009/jan/02/russia-ukraine
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