Mon, Jan 09, 2006 - Page 9 News List

Ukraine's gas settlement: The wrong solution

The deal between Kiev and Moscow makes energy supply more uncertain, not less, because it puts Ukraine's energy future in the hands of a shadowy company

By Yuliya Tymoshenko

Europe's sigh of relief at the supposed end of the dispute between Russia and Ukraine over gas pricing was audible here in Kiev. But the settlement raises more questions than it answers. By placing Ukraine's energy needs in the hands of a shadowy company linked to international criminals, the agreement has planted the seeds of new and perhaps more dangerous crises.

As a result, I am challenging this deal in court. Let a public hearing before a judge reveal exactly who will benefit from this deal.

The settlement between Ukraine and Russia's state-owned gas monopoly, Gazprom, is intolerable because Ukraine's energy future has been placed in the hands of RosUkrEnergo, a criminal canker on the body of our state gas corporation. RosUkrEnergo was established in the last months of the regime of our former ruler, Leonid Kuchma. Yet it miraculously gained control of all of Ukraine's gas imports from Central Asia. Under the deal agreed this week, it retains that control.

As one who worked in the gas industry before entering politics, I know that the gas trade in the countries of the former Soviet Union is riddled with corruption. During my premiership, my government sought to investigate RosUkrEnergo -- to discover who precisely its owners are, how it gained a virtual monopoly on the import of Central Asian gas, and where its profits go. Now that I am not in government, that investigation has been shelved. Ukraine's energy needs, and thus the certainty of energy supplies across Europe, will never be secure as long as gas transit is in the hands of secretive companies with unknown owners.

But the issues raised by the gas dispute between Ukraine and Russia go beyond energy security, reviving questions about Ukraine's place in Europe and the world. As this struggle shows, Ukraine has been obliged to assume a higher-profile role in European affairs. It must consider where and in what sort of Europe it fits, what balance it should strike between Russia and the EU, and how it should find the self-assurance needed to play its full part in world affairs.

It would be sheer folly to suggest that Ukrainians start with a blank slate. Centuries of being part of the Russian and Soviet empires have, in different ways, shaped how Ukrainians view their country and its interests. One consequence of this is that Ukrainians are often shy about asserting Ukraine's independent interests plainly -- exemplified by Ukraine's acceptance of a deal that leaves its energy future so insecure.

Like any country, Ukraine's relations with the world are determined by four interlocking factors: history, patriotism, national interests and geography. Each factor has special resonance here. True, Ukrainians rightly feel like citizens of a normal, independent country and want to be treated that way. But this does not mean we want to bury history and our historic ties. We are a normal country with an abnormal history.

Indeed, Ukraine's interests form a comfortingly familiar triangle of economic, political and strategic priorities: free trade and open markets across the globe; prosperous and democratic neighbors; and not being on the front-line of a conflict, still less a potential battleground, between Russia and the West. Our goal is thus a democratic Ukraine located between prosperous like-minded neighbors to the east and west.

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