Ukraine's fractious coalition set to be reinstated

UKRAINE'S FRACTIOUS pro-western government appeared to have been reinstated last night, after months of bitter wrangling and threats of snap elections, and in the teeth of an economic crisis and gas dispute with Russia.

Allies of President Viktor Yushchenko and prime minister Yulia Tymoshenko - leaders of the 2004 Orange Revolution which pointed Ukraine away from Russia and towards the European Union and Nato - reportedly agreed to end their feuding and try yet again to create a stable, reformist coalition.

The unexpected deal was announced by Volodymyr Lytvyn, whose small party plans to join the coalition, after parliament elected him as its new speaker.

"We have a government, we have a prime minister," he said.

"Clearly, there will be proposals from the coalition on the make-up of the government. I see no legal grounds for substantial changes in the government and, first and foremost, the prime minister." If the coalition is restored, it would hearten western governments and investors who have watched Ukraine's leaders squabble as the currency collapsed and industrial production slumped, forcing the country to seek a $16 billion (€12.4 billion) international loan.

The outlook was darkened further by another dispute with Russia over alleged unpaid gas bills, and the threat of disruption to supply and gas transit to EU countries during midwinter. Kiev has yet to repay its fuel debt to Russia and finalise how much it will pay for gas next year.

The announcement of the coalition's revival bewildered some politicians, however, raising doubt over whether it was really a done deal.

Kseniya Lyapina, an MP from a party that supports Mr Yushchenko, said "party leader Vyacheslav Kyrylenko has not signed any coalition agreement. There is no signature of the head of the party. There is deputy head Borys Tarasyuk's signature, which he put there for unknown reasons."

Ms Lyapina said "the statement on the formation of the coalition was premature" and "the party only decided to start coalition talks".

Mr Kyrylenko said earlier in the day his party felt forced to re-enter talks with Ms Tymoshenko's allies to prevent them forming a "pro-Kremlin" coalition with the opposition Regions Party, which has strong ties with Russia.

Analyst Oleksander Dergachyov said the coalition had "looked far from likely and it will have to withstand the test of events. It cannot be viable unless there are changes in the relationship between Yushchenko and Tymoshenko."