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Yushchenko spits fire, currency wilts

Kiev/Astana (Kazakhstan), Jan. 11 (Reuters): President Viktor Yushchenko accused Ukraine’s parliament today of destabilising the country by sacking his government, a move that sent the local currency tumbling to its lowest in nine months.

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 said in the Kazakh capital Astana where he is on a visit. “It simply serves to destabilise the situation.”

However, 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.”

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

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

The two leaders barely touched on the energy issue in comments to reporters after their meeting, instead focusing on the positive side of their strained relations.

“Ukraine and Russia have entered an excellent phase in bilateral relations, a phase of personal friendship, which allows us to discuss wonderful prospects,” Russia’s Interfax news agency quoted Yushchenko as saying.

He also reassured European gas consumers that the political crisis at home would not disrupt their gas supplies again. It was controversy over the Russian gas deal that fuelled 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 by popular politician Yulia Tymoshenko, Yushchenko’s ally in the Orange Revolution who turned fierce opponent after he sacked her as Prime Minister in September amid a corruption scandal.

Yushchenko has said Prime Minister Yuri Yekhanurov will stay in office until the March election. “We are obliged to fulfil our duties until a new government starts working. It means no caretakers,” Yekhanurov said.

Ukraine is now facing constitutional deadlock.

Yushchenko wants to challenge the vote in the constitutional court, which is itself paralysed by not having enough judges because parliamwent blocked Yushchenko’s nominees. Some analysts doubted the political battle would make much difference to policy. “Yesterday’s vote is largely a result of increasingly active pre-election campaigning,” analyst Katya Malofeeva said.

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