Yushchenko Demands MPs Rethink

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko said on Thursday he had demanded parliament cancel its vote to dismiss the government, deepening the political crisis over a costly new gas contract with Russia.

Ukrainian President Viktor Yushchenko speaks to Cabinet members in Kiev, Ukraine, Thursday, Jan. 12, 2006.

"Today, I signed an appeal to parliament with a demand to cancel the unconstitutional decision to sack the government," Yushchenko told the opening of a government meeting.

Expressing support for the government of Prime Minister Yuri Yekhanurov, he said: "Today Ukraine has a full-fledged government in the center and in the regions."

Tuesday's vote by parliament was led by opposition MPs who analysts said were using anger over the new gas contract with Russia last week with Russia to undermine Yushchenko's supporters ahead of a March 26 parliamentary election.

Yushchenko said he was withdrawing his signature from a memorandum of cooperation with the political opposition because he said it had violated the agreement.

Under the memorandum, the authorities pledged to halt criminal prosecution of some opposition figures alleged to have been involved in rigging the 2004 presidential election.

The West-leaning Yushchenko came to power after an "Orange Revolution" of street protests overturned the result of that disputed poll that had produced a pro-Moscow winner.

Credit ratings agency Fitch meanwhile downgraded its outlook for Ukraine to stable from positive on the political turmoil, saying it could put the brakes on vital economic reforms. Fitch kept its BB- rating for Ukraine, which is below investment grade.

"The formation of the next government could be a prolonged affair and ... the outcome may be a weak coalition vulnerable to splits," Sharon Raj, sovereign ratings analyst at Fitch in London, said in a statement.

Ukraine's hryvnia currency earlier on Thursday eased to a new 9-month low, with the central bank offering no support, after it stepped in with dollar-selling intervention on Wednesday.

Yield premiums on Ukrainian bonds widened by 5 basis points to 192 basis points over U.S. treasuries, according to JP Morgan's EMBI+ index.

It was not clear how parliament would react to Yushchenko's demands.

His allies do not have a majority in parliament where his onetime ally, but now rival, Yulia Tymoshenko joined forces with factions representing the ousted administration in the "Orange Revolution".

Parliament closes for winter holidays on Friday and will reopen again on February 7.

Source: Reuters