KIEV, Dec. 3 – Prime Minister Yulia Tymoshenko and Viktor Yanukovych, the leader of the opposition Regions Party, are close to creating a coalition that would challenge pro-Western President Viktor Yushchenko, a newspaper reported Wednesday citing a source.

The coalition, allegedly backed by the Kremlin, would seek to postpone indefinitely Ukraine’s accession to NATO in exchange for Russia’s lowering of natural gas prices next year, the daily Segodnia reported Wednesday.

Hanna Herman, a Yanukovych ally, confirmed that Tymoshenko and Yanukovych had been holding the talks, but said the two are still to iron out some remaining disagreements before Thursday.

“There is a long night ahead,” Herman told Channel 5 television late Wednesday. “Tomorrow morning we have a meeting of the group’s leadership and, perhaps, they will announce results of today’s late night talks.”

But Segodnia, owned by Rinat Akhmetov, the wealthiest Ukrainian businessman and the chief financial sponsor of the Regions Party, reported the parties had made progress after the reported involvement of Vladimir Putin, Russia’s powerful prime minister.

Some of the richest businessmen in the Regions Party have been so far lukewarm to the idea of creating the coalition with Tymoshenko, but their position has changed after Putin’s promise to lower natural gas price, the newspaper reported.

“As a present to ‘the just married’ Moscow is ready to provide natural gas at $170 per 1,000 cubic meters [down from $179.5 in 2008],” the person familiar with the situation told Segodnia. “This has become the reason why the businessmen had warmed up towards Tymoshenko.”

The creation of the coalition between Tymoshenko and Yanukovych undermines Yushchenko’s plans to approve his long-time ally, Ivan Pliushch, as the speaker of Parliament.

Pliushch, who won a seat in Parliament on the ticket of Our Ukraine, Yushchenko’s party, has been persistently calling for the creation of the grand coalition that would include Our Ukraine, Tymoshenko and the Regions Party.

But the talks between Tymoshenko and Yanukovych apparently leave no room for Our Ukraine as their coalition would seek to limit Yushchenko’s influence on Ukraine’s foreign policy.

Preliminary deal between Tymoshenko and Yanukovych would allow the Regions Party to control more than a half of seats in the government, while still leaving Tymoshenko as the prime minister, the newspaper reported.

In particular, the Regions Party will probably seek to control key government posts that supervise the economy, including the finance minister and energy minister, the newspaper said.

Also, the coalition will work hard to amend the constitution to enable the election of the Ukrainian president in Parliament, a move that would allow the coalition to approve Yanukovych as the new president after Yushchenko’s term in office expires.

Pro-Russian candidate Yanukovych lost presidential election to pro-Western Yushchenko in December 2004 following the Orange Revolution, a popular uprising against election fraud.

The Kremlin openly backed Yanukovych in that election. Putin, then the president of Russia, publically twice congratulated Yanukovych in November 2004 on his “victory” despite numerous reports of sweeping fraud and manipulation.


The election was later cancelled by the Supreme Court, allowing Yushchenko to win a rerun of the vote in December 2004. (tl/ez)