Ukraine parliament dismisses Yekhanurov government

By Tom Warner in Kiev
Ukraine was plunged into fresh political turmoil yesterday as its parliament sacked the pro-western government of Yuri Yekhanurov after he was accused of striking a poor deal to end the gas price dispute with Russia.The no-confidence vote, backed by 250 of parliament's 450 members, came after it emerged that a five-year deal signed between Moscow and Kiev last week would force the Ukraine to pay much more for its gas imports. The vote was a heavy blow to the presidency of Viktor Yushchenko, who now faces the prospect of working with a hostile government after parliamentary elections in March. Ukraine's new constitution, which came into force on January 1, has stripped the president of the power to appoint the cabinet. Supporters of Volodymyr Lytvyn, the centrist speaker of parliament, joined pro-Russian opponents of Mr Yushchenko and supporters of former prime minister Yulia Tymoshenko in the vote to sack Mr Yekhanurov. Mr Lytvyn accused the prime minister of dodging questions about the gas deal. The deal with Gazprom, Russia's state gas company, came after Russia reduced gas supplies into Ukraine's pipelines by 25 per cent. It sets the price of Ukraine's gas imports at $95 per thousand cu m for the first half of 2006, almost doubling the previous cost. The five-year deal also fixes the transit fees Ukraine can charge on gas exported by Russia but only caps the cost of Ukraine's gas imports for six months. Officials at Gazprom say they can adjust the price in line with the market using a mechanism that has not yet been agreed. "No one has any guarantee that there will be gas for $95," Mr Lytvyn said. Mr Yushchenko, who was in Kazakhstan yesterday, said he did not recognise the vote. "The parliament's decision about the dismissal of the government was unconstitutional," Mr Yushchenko said. Hryhory Nemyria, an adviser to Ms Tymoshenko, said Mr Yekhanurov and his cabinet would probably stay on as the acting government for 60 days, which is the maximum allowed after dismissal.
A caretaker government would then serve until a new government was formed by the newly elected parliament. Yesterday's vote raises the possibility that the pro-Russian opposition, which held power until the Orange Revolution in 2004, could attempt to regain power before the March elections by using powers granted to parliament under a revised constitution. Gazprom shares rose 13 per cent yesterday to a record high of 220 roubles on the first day of trading after the Russian Christmas holiday.

FT.COM