Tymoshenko Victorious in Gas Wars     Print Email
Tuesday, 10 February 2009

The only winner in the recent energy standoff between Russia and the Ukraine was Ukrainian Prime Minister Yulia Tymoshenko, who is now viewed as having wrested the least-bad deal for Ukraine in her bargaining with Russian Prime Minister Vladimir Putin.

The list of losers is long, not only the millions of east Europeans who were stranded without power and heating, but also other political leaders, notably Tymoshenko’s pro-Western rival, Ukrainian President Victor Yushchenko, according to David Stern of the GlobalPost. He sees Tymoshenko’s negotiations that broke the deadlock as a clear victory for her in the on-going power struggle in Kiev. That internal political dynamic and the on-again, off-again gas wars are related to geopolitical questions such as possible membership for Ukraine in NATO and the EU. In her face-to-face Moscow meetings with Russian Prime Minister Vladimir Putin, she got an agreement on more favorable terms than observers had expected – with a new price estimated as 20% less than Moscow had initially demanded. Because she managed to exclude Yushchenko, Tymoshenko emerged as the more capable leader. Mikhailo Pogrebinsky, director of the Kiev Center for Political and Conflict studies, wrote that “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.”

Part of her victory was the elimination of RosUkrEnergo, an opaque corporate intermediary owned by Russia’s Gazprom and two small Ukrainian partners. Experts report that this entity functioned as a way of funneling funds to her political rivals in the Ukraine – and apparently to Russian leaders, too. According to the Kyiv Post, President Yushchenko “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.” Other analysts have concluded that Tymoshenko – often dubbed “the gas princess” in Ukraine — also stood up to Putin on this issue. That will help broaden her domestic appeal as someone who is viewed favorably in Moscow, but can in some instances refuse to do Russian bidding where her country’s interest are concerned.

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UMD Jean Monnet Research Project

Infrastructure Planning and Financing: Lessons from Europe and the United States

The University of Maryland has received a Jean Monnet grant from the EU to conduct a series of policy exchanges between Europe and the US on filling infrastructure needs and the utility of public/private partnerships as the financing mechanism. If interested in participating in or receiving more information about these exchanges, please contact Rye McKenzie (rmckenzi@umd.edu).

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