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Moscow's muscle-flexing could benefit Kiev after gas cut: analysts

AFP January 2, 2006

Russia's move to cut off Ukraine's gas supply will reveal how dependent the former Soviet republic is on cheap natural gas, but Ukrainian President Viktor Yushchenko could be the ultimate winner, according to Russian analysts.

"The gas war is an electoral strategy" by Yushchenko, said Sergei Markov, a political analyst close to the Kremlin. The cut-off seems at first a double success for the Kremlin, ensuring future increased budget receipts and a weakening of Yushchenko's leadership ahead of key parliamentary elections in March and just over a year since he came to power against a Russia-backed candidate. But Markov, who advised Yushchenko's rival Viktor Yanukovich, said the Ukrainian president could in fact be strengthened by the dispute.

"The crisis is very handy for Yushchenko since if the parliamentary election campaign was taking place in normal conditions, he would lose them and the future constitutional reform would weaken his power," said Markov, referring to a reform that strengthens parliamentary authority in Ukraine.

"His electoral campaigners invented a strategy of breaking off talks, of refusing to compromise so as to force Gazprom to cut off the gas and provoke anti-Russian hysteria" in Ukraine, he said.

Markov's analysis was echoed by a Russian foreign affairs ministry statement released Sunday that accused the Ukrainian leadership of seeking to make political gain from the crisis by casting Russia as an "enemy." In the closing days of 2005, Russian President Vladimir Putin came up with two proposals -- one for a large commercial loan to Kiev to fund higher gas costs and the other for a price hike delay until the second quarter of 2006. In Russian evening news bulletins on Russian television, Putin was portrayed as the moderate voice trying to find a compromise, at one stage even scolding Russian and Ukrainian energy negotiators for stoking up a "real crisis" between the two countries.

Yushchenko rejected the loan and called for a "fair" price for the gas, which he set at 80 dollars per 1,000 cubic metres.

Moscow has said it wants Ukraine to pay close to world market prices at a level of 230 dollars per 1,000 cubic metres, compared to the 50 dollars Kiev currently pays. Ukraine, a country of 48 million people, depends on Russia for around a third of its gas supply.

Another Russian political analyst, Viktor Kremenyuk from the US-Canada Institute in Moscow believes the Ukrainian president wants to build up tension with Moscow to fulfil his long-term strategic objectives, including joining the North Atlantic Treaty Organisation (NATO). "What mars this bid is a Russia-Ukraine agreement on the port of Sebastopol and the cooperation between Russian and Ukrainian defence enterprises," the analyst said, referring to the Ukrainian port that houses Russia's Black Sea fleet.

"If the situation gets worse and becomes dramatic, he could invoke Moscow's hostility against Ukraine to denounce the Sebastopol agreement," Kremenyuk told AFP. Kremenyuk said that even if Ukraine took some of the Russian gas being pumped through Ukrainian territory on its way to Europe, it would not risk negative reactions on the part of the West.


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