Post card from Ukraine

This is one in a series of post cards from Reuters reporters across Europe, Middle East and Africa

Ukraine’s famous instability, verbose politicians and haphazard legislation present the investor – and the journalist – many red herrings. While talk of impeachment of President Viktor Yushchenko ring alarm bells, constitutionally it is nonsense. As CDSs go off the rails, Ukraine’s sovereign debt repayments are small and manageable. As Prime Minister Yulia Tymoshenko calls for the central bank governor’s blood, he is still at the helm. And while Yushchenko and Tymoshenko fight like Itchy and Scratchy, the country – to the amazement of some – has yet to collapse. 

Investors inside Ukraine have long known this and with good lawyers have managed to get on with business as the economy driven by steel and grain exports boomed at 7 percent annually since 2000. They follow political events constantly but are less quick to judge, because often their significance appears later or in fact does not exist. Those outside Ukraine overestimate the consistency of its politics. None of the three major parties – Tymoshenko’s, Yushchenko’s or opposition leader Yanukovich’s can be branded liberal, conservative, socialist, pro or anti Russian. Populism and pragmatism – usually at the last minute — are the key policies.

Russia-Ukraine row: up close and personal

Could it be that the gas dispute between Moscow and Kiev broke out because Russian Prime Minister Vladimir Putin felt personally slighted by his Ukrainian opposite number, Yulia Tymoshenko? It may seem far-fetched that two countries would risk leaving half of Europe without gas over something so apparently petty. But a look at the sequence of events that led up to this crisis suggests there just might be something in it.

Rewind back to Oct. 2, and Tymoshenko is meeting Putin at his Novo-Ogaryovo residence outside Moscow. It is a lodge in forested parkland where, as a rule, he only invites people on whom he wants to make a good impression.

The portents were not good. Tymoshenko, often called the “Gas Princess” for the gas business she used to run in eastern Ukraine, has been a driving force behind Kiev’s push to integrate with the West and once wrote an article in a U.S. journal saying Russia had “imperial designs” on its neighbours.

Yet Putin and Tymoshenko seemed to hit it off. The Ukrainian Prime Minister, dressed in a designer outfit and looking much younger than her 47 years (she has since turned 48), radiated charm as she sat opposite her Russian colleague. Putin, the gruff former KGB spy, smiled and cracked jokes at a press briefing with Tymoshenko afterwards. And later that same evening, Putin took Tymoshenko to Gorki, where his boss Dmitry Medvedev has his own out-of-town residence, and they talked late into the night.

Always a marriage of convenience in Ukraine?

He was a suave central banker and she a “gas princess”, a young politician desperate to make her mark. In 1998 Yulia  Tymoshenko, now Ukraine’s prime minister, said she knew her destiny lay with Viktor Yushchenko, who went on to become president.

“We understood that we are a team,” she said at that time.

It’s an assertion Yushchenko disputes — a clash of views that has defined this partnership since they overturned a Soviet-style leadership in the 2004 “Orange Revolution” and vowed a modern, Western future for Ukraine’s 47 million people.

Then they stood shoulder-to-shoulder — her revolutionary speeches firing up crowd after crowd, his more academic approach comforting those who feared she was reckless in her pursuit of power.