Ukraine's president and prime minister, at odds over the merits of a deal to restore Russian gas flows to Europe, traded new barbs on Thursday ahead of a meeting of top officials about the agreement.
Prime Minister Yulia Tymoshenko, who praises the accord and the 2009 gas price as a "victory" for Ukraine, said the National Security and Defence Council had no right to derail the deal she struck at weekend talks in the Kremlin.
President Viktor Yushchenko says the deal's provisions for Ukraine to pay European prices less 20 percent damaged the national interest. He made no direct reference to the premier but warned in a speech against "alluring promises". Yushchenko and Tymoshenko were allies in the 2004 "Orange Revolution" that swept Ukraine's pro-Western leaders to power. They have since been at odds on nearly all policy issues, particularly since Tymoshenko was made prime minister for a second time in late 2007.
In an address marking the 1919 proclamation of a short-lived Ukrainian state that was crushed by the Bolsheviks, Yushchenko said Ukrainians would not be duped by groundless pledges. "We must not blindly believe alluring promises. We must not blindly believe politicians who, within an instant, betray the national interest," he told dignitaries.
Tymoshenko said a meeting on Friday of the National Security and Defence Council could in no way alter the deal's provisions to do away with what she denounces as "corrupt" intermediaries in trade between the Ukrainian and Russian gas companies. "I will not allow the president to bring back corrupt intermediaries between (Russia's) Gazprom and (Ukraine's) Naftogaz, no matter what sort of council meeting he holds," Tymoshenko told a news conference.
"I believe that if the president could have secured better conditions, there was no one to stop him. A meeting of the Council should have taken place in the middle of the crisis."
The premier says the Council, whose decisions must in theory be implemented under the constitution, has no powers to overturn the deal clinched in two tough Kremlin negotiating sessions. In her comments, Tymoshenko renewed her attack on the central bank, saying its "speculative manoeuvres led to such an abrupt and groundless fall in the hryvnia (currency), which has placed the economy in such a difficult position".
The hryvnia fell to 50 percent of its former value late last year, but has since regained ground. Tymoshenko has urged the president to sack the central bank chairman and said parliament must determine his responsibility in the currency's decline, which has increased the cost of loans taken out by millions of Ukrainians to purchase cars or homes.
A year before a presidential election, Tymoshenko rides high in polls just behind Viktor Yanukovich, the Kremlin-backed candidate initially declared the winner in a rigged 2004 presidential poll that sparked the "Orange Revolution" protests. Yushchenko trails far behind in surveys.
PM STEPS UP RHETORIC AGAINST CENTRAL BANK:
Ukrainian Prime Minister Yulia Tymoshenko intensified her rhetoric against the central bank on Thursday, saying she had secured a court order blocking its refinancing of one of the country's largest banks.
Tymoshenko has been waging a campaign against the central bank for several months, accusing it of mismanaging state money and supporting "speculative" moves against the hryvnia currency, which lost half of its value in the last four months of 2008. She viewed as suspicious the central bank's refinancing of Nadra Bank, the country's seventh largest, with a total sum of 11 billion hryvnias ($1.4 billion) in the past few months, including 3 billion hryvnias allocated in the past week.
She said the bank had used the money for speculative actions on the interbank market, dragging down the hryvnia currency. The central bank has said it would help refinance any of the country's large banks struggling with the repayment of foreign loans and deposit withdrawals.
The target of Tymoshenko's attack was also businessman Dmytro Firtash, a stakeholder in gas intermediary RosUkrEnergo. His company, Group DF (GDF) agreed to buy a controlling stake in Nadra in November. "As I promised yesterday, the government went to court with a case against the central bank for such illegal activities and we asked the court for a decision forbidding the transfer of 3 billion hryvnias, which the central bank decided to transfer to Mr Firtash's Bank Nadra, to stop the transaction until the issue is reviewed," Tymoshenko told journalists. "Today, the Kiev district administrative court took a decision upholding our case and barred the central bank from transferring the 3 billion hryvnias."
She said money allocated by the central bank for refinancing "did not go to the bank's depositors or to finance the real economy. It went towards speculative deals." The central bank was unavailable for comment and requests for comment from Nadra bank and GDF went unanswered. Firtash, in an interview published this week in the daily Kommersant Ukraina, denied any misappropriation of Bank Nadra's funds, saying his group's acquisition of a controlling stake in Nadra was still incomplete.
"Yulia Tymoshenko says that I took some money out of there," he told the daily. "This is just more nonsense. How can anyone take something out of a place if they are not in it yet? The transaction is only at the first stages."