December 18, 2007 / 3:35 PM / 12 years ago

Ukraine parliament approves Tymoshenko as PM

KIEV (Reuters) - Yulia Tymoshenko, ardent advocate of Ukraine’s “Orange Revolution”, won parliament’s backing on Tuesday to return as prime minister and vowed to clean up the country’s finances and hold talks with Russia on the gas trade.

Ukraine's new Prime Minister Yulia Tymoshenko smiles as she holds a bouquet of flowers presented to her after voting in parliament in Kiev December 18, 2007. REUTERS/Gleb Garanich

Tymoshenko, who reconciled with pro-Western President Viktor Yushchenko ahead of a September parliamentary election, won 226 votes in the 450-seat chamber, the exact number required to take office. Her adversaries took no part in the vote.

The vote underscored the fragile nature of Tymoshenko’s majority, though it also showed the coalition’s discipline at critical moments. Some analysts express concern that the slender advantage will make it difficult to push forward with reforms.

Parliament later approved Tymoshenko’s cabinet, including veteran reformer Viktor Pynzenyk as finance minister.

Tymoshenko roused vast crowds in Kiev in the “Orange Revolution” that swept Yushchenko to office and was premier for seven months before the two fell out and he sacked her.

Reconciled with Yushchenko before the September election, she heads a coalition of her own bloc and his Our Ukraine party which can generally command 227 seats in a divided parliament.

Tymoshenko said her cabinet would meet on Tuesday, with the first task to produce a new budget by the New Year.

“We will carry out strategic reforms step by step,” she said after the vote. “Our first steps will be in the few days left to work out our financial resources and correct the budget.”

She said Ukraine would uphold its guarantees to send Russian gas through to European customers. But she wanted talks quickly with Russia to eliminate intermediaries in gas trade.

The previous government, headed by Viktor Yanukovich, the president’s rival from the 2004 upheaval, has already agreed gas prices for next year with a 38 percent increase.

NARROW VOTE

Some analysts said the narrow vote exposed the new premier’s limited room for maneuver.

“This means the government will be fragile. There will be a number of question marks over any legislation and reforms,” said Ivailo Vesselinov, an analyst with Dresdner Kleinwort.

But Oliver Weeks of Morgan Stanley, said markets were well aware of the coalition’s fragile nature.

“What is positive is that there is a gas deal in place. We’ll be looking to see if she tries to change that,” he said.

“I think politics still matter, but I don’t think this will change markets much in the short-term.”

Tymoshenko fell one vote short of approval last week.

Before Tuesday’s vote, she made a speech vowing to end corruption 16 years after independence. She has said she will uphold the ideals of the 2004 protests, including pledges to eventually seek membership of the European Union and NATO.

Speaker Arseniy Yatsenyuk grinned as his vote, the last to be counted, gave Tymoshenko the numbers she needed.

Tymoshenko, wearing her traditional peasant braid and a white dress, was then surrounded by applauding supporters.

With career diplomat Volodymyr Ohryzko appointed as Foreign Minister and long-time Yushchenko loyalist Yuri Yekhanurov at defense — both nominated by the president - Ukraine’s policies of moving closer to the West were certain remain intact.

Yushchenko was not in parliament, but said on his Web site he was certain the coalition’s “steps to tackle the country’s top priorities will prove successful”.

Yanukovich, given the floor during debate, said Tymoshenko’s last mandate had seen the economy shrink and prices rise.

“A new era of trials lies ahead for our country, trials of crises, scandals,” he said. “Our people can expect no improvement in their lives.”

In Brussels, European Union foreign policy chief, who has expressed concern at instability in Ukraine, urged Tymoshenko to proceed with reforms aimed at the modernization of Ukraine.

Writing by Ron Popeski; additional reporting by Pavel Polityuk and Sabina Zawadzki; editing by Elizabeth Piper

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