Yushchenko Says Parliament Destabilizes Ukraine

ASTANA, Kazakhstan -- President Viktor Yushchenko accused Ukraine's parliament on Wednesday of destabilizing the country by sacking his government, a move that sent the local currency tumbling to its lowest in nine months.

Russian President Vladimir Putin (L), and Ukrainian President Viktor Yushchenko (R), walk during a meeting in Astana, Kazakhstan, Wednesday, Jan. 11, 2006. Ukrainian President Viktor Yushchenko told Russian President Vladimir Putin on Wednesday that their countries had weathered some of the most trying times in their relationship over the past two months but that the trials were mutually useful.

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

"Yesterday's decision was incomprehensible, illogical and wrong," he told reporters in the Kazakh capital Astana where he is on a visit. "It simply serves to destabilize the situation."

But he added: "I don't see this as a tragedy. It's an experience that will increase the quality of Ukrainian politics."

Financial markets were less sanguine and the normally tightly controlled hryvnia currency dropped to its lowest level since April 2005.

"We are all bewildered," one currency dealer said. "There has been no central bank in the market for two days as (dollar) demand has been rising. The market has started to panic."

MEETING PUTIN

Yushchenko met Vladimir Putin for the first time since the Russian president ordered gas taps to be turned off to his ex-Soviet neighbor at the new year in a bitter dispute over prices that briefly disrupted supplies to the rest of Europe.

Both men are in Astana for the inauguration for a new term of Kazakhstan's long-serving President Nursultan Nazarbayev.

Putin has made clear his discomfort with the Western leanings of Yushchenko who came to power on a wave of popular protests in the 2004 "Orange Revolution", defeating the Kremlin's preferred candidate.

Last week, Moscow and Kiev finally agreed a new contract under which Ukraine would pay nearly twice as much for its gas.

That, and allegations by former Ukrainian Prime Minister Yulia Tymoshenko that it was only a six-month deal and not the five years heralded by both governments, fueled the parliamentary no-confidence vote.

Analysts said it was another blow for Yushchenko who has struggled in the face of corruption scandals and a faltering economy to hang on to the euphoria that marked his rise to power.

The vote was led largely by Tymoshenko, Yushchenko's ally in the Orange Revolution who turned ferocious opponent after he sacked her as premier in September amid a corruption scandal.

She has sided with Yushchenko's pro-Moscow opponents whom analysts said were politically damaged when Russia turned off the gas and who wanted to try to use the new, costlier contract to claw back that lost ground before the election.

PM TO STAY ON

Yushchenko has said Prime Minister Yuri Yekhanurov will stay in office until the March election.

"We have a clear and complicated task to secure managing the country and I want to assure everybody -- allies and rivals -- that this task will be fulfilled," Yekhanurov said at the opening of a cabinet meeting in Kiev.

"We are obliged to fulfill our duties until a new government starts working. It means no caretakers."

Ukraine is now facing constitutional deadlock.

Yushchenko plans to challenge the vote in the Constitutional Court, which is itself paralyzed by not having enough judges because parliament blocked Yushchenko's nominees.

Some analysts doubted the political battle would make all much difference to policy.

"While this development increases the political instability ... it will have a limited effect on the course of government policy," Renaissance Capital Ukraine analyst, Katya Malofeeva, said in a research note.

"Yesterday's vote is largely a result of increasingly active pre-election campaigning, but it changes little of substance: with only two and a half months left before elections, the government could not act freely to carry out reforms any way."

Source: Reuters

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