Ukraine leader takes on gas, Obama, Putin in defining week

Ukraine leader takes on gas, Obama, Putin in defining week

KIEV - Ukraine's new pro-Western leader enters a defining week Sunday seeking to head off a Russian gas cut and secure US President Barack Obama's backing with his country threatened by civil war.

Confectionery tycoon Petro Poroshenko will also attempt to arrange the first meeting with Russian President Vladimir Putin since the February ouster of a pro-Kremlin regime in Kiev sparked the worst East-West crisis since the Cold War.

And it ends Saturday with the 48-year-old sworn in as the fifth president of Ukraine after a convincing first-round May 25 election win handed him a mandate to resolve a separatist insurgency threatening the very survival of the ex-Soviet state.

"These meetings will be crucial," said Kiev-based political analyst Volodymyr Fesenko.

"They will help establish direct relations and introduce Petro Poroshenko to world leaders - first and foremost, Barack Obama."

Russian gas threat

Ukraine's third "gas war" with Russia in less than a decade erupted when Moscow - stunned by the sudden ouster of an ally who had just rejected an EU alliance that the Kremlin greatly feared - nearly doubled the price it charges its neighbour for the fuel.

Kiev accused Moscow of "economic aggression" and refused to cover a bill that Russia puts at $5.17 billion (S$6.48 billion).

Russian gas transits through Ukraine supply about 15 per cent of European needs and a top EU envoy is now urgently seeking a compromise that could save 18 member states from seeing supply cuts go into effect Wednesday.

A final round of talks has been set for Monday in Brussels after Ukraine's Naftogaz state energy firm - bowing to both EU and Kremlin pressure - transferred a $786 million payment to its Russian counterpart Gazprom to keep the talks alive.

Gazprom now says it is willing to discuss a lower price and analysts believe that a compromise is in sight.

"Our view is that Gazprom and Naftogaz will eventually reach a compromise," Moscow's VTB Capital investment bank said in a research note.

"However, it is unclear how long the discussions between the parties will continue and what the possible consequences will be."

Obama handshake

Poroshenko will shake hands with Obama on Wednesday in Warsaw wary of an address last week in which the White House chief put American diplomacy above military might in confronting threats such as that of Russia's expansion.

"Just because we have the best hammer does not mean that every problem is a nail," Obama told US Military Academy graduates.

That message was greeted with awkward silence by former Soviet satellites in eastern Europe that have been clamouring for firmer US protection since Russia's seizure of Ukraine's strategic Black Sea peninsula of Crimea in March.

Washington is sending Assistant Secretary of Defence Derek Chollet for meetings in Kiev on Monday aimed at reassuring Poroshenko and showing Putin the strength of the US commitment to Ukraine.

"I am certain that as soon as president-elect Poroshenko is sworn into office, we will begin discussions about our future cooperation on security and defence," US Ambassador Geoffrey Pyatt told Kiev's Dzerkalo Tyzhnia newspaper.

Poroshenko for his part promised to seek a "new security alliance with the United States and Europe" that could protect Ukraine without its outright membership in the Cold War-era NATO bloc that Russia views with hostility and mistrust.

Elusive Putin meeting

Putin spelt out the threat of an outright invasion of Ukraine when he sought and won parliament's authorisation on March 1 to use any means necessary to "protect" ethnic Russian living across the border.

But the threat of war began receding last month when Putin surprised many by suddenly softening his tone.

The Kremlin chief advised Ukraine's eastern Lugansk and Donetsk regions against holding May 11 independence referendums that went ahead anyway but which he then refused to recognise as binding.

Putin also promised to "respect" the outcome of Ukraine's own election and began pulling back the 40,000 troops he had massed at Ukraine's doorstep in an ominous show of strength that touched off near-panic in Kiev.

Western diplomats remain sceptical about the sincerity of Putin's shift. But they agree that it provides a welcome opening for Poroshenko.

The Ukrainian political veteran now hopes to tap the ties he nurtured in Moscow while serving as foreign minister under now-deposed president Viktor Yanukovych to set up a meeting with Putin on the sidelines of Friday's D-Day commemorations in Normandy.

Resolving Ukraine's two-month separatist insurgency "is impossible without engaging the Russian leadership," Poroshenko said a day after his election.

But the Kremlin is yet to confirm the meeting and analysts expect no breakthrough even if such talks are held.

"This would be something like a political reconnaissance mission for Poroshenko," said analyst Fesenko.

"It is important to understand Putin's mood and to know what kind of concessions he might make."

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