Tuesday, October 11, 2011

Energy Firm - Russia - News - Irks Eu

KIEV (Reuters) A Ukrainian court on Tuesday sentenced former prime minister Yulia Tymoshenko to seven years in prison for abuse of office in relation to a 2009 gas deal with Russia that she brokered, a case regarded widely in the West as politically orchestrated.

The United States, Russia and the European Union reacted sharply to the verdict and the sentence, the maximum sought by state prosecutors.

The White House said in a statement it was "deeply disappointed" about the verdict and had "serious concerns" about Kiev's commitment to democracy.

Russian Prime Minister Vladimir Putin, speaking on a visit to Beijing, said it could jeopardize energy relations between the two former Soviet states, while the foreign ministry said it had detected an "obvious anti-Russian subtext" in the outcome.

The Tymoshenko affair seems certain to slow the Kiev government's drive for European integration, a declared foreign policy priority for President Viktor Yanukovich.

In Brussels, EU foreign policy chief Catherine Ashton said the bloc was "deeply disappointed" by the verdict in the trial that smacked of "selective" justice.

"The EU will reflect on its policies toward Ukraine," she said in a statement on behalf of the EU, an apparent allusion to a planned association agreement that would have led to a Ukrainian-EU free trade zone.

Tymoshenko's supporters say the trial was part of Yanukovich's plans to eliminate her as his only real opposition. If she ends up serving a long prison term, she will be unable to contest a parliamentary election next year or run again for president in 2015.

Judge Rodion Kireyev handed down the seven-year sentence at the end of a three-month trial that threw a spotlight on a 10-year contract with Russia, signed by the charismatic opposition leader when she was prime minister.

The 2009 agreement between the state energy firm Naftogaz and Russia's gas giant Gazprom ended a pricing dispute between Ukraine and Russia which had led to disruptions of gas supplies to some EU countries. It was greeted with relief by Europe at the time.

But the government under Yanukovich, who beat Tymoshenko in a fight for the presidency in February 2010 and forced her out as prime minister, says the deal saddled Ukraine with an exorbitant price for Russian gas.

Taking the line argued by the prosecution, the judge said Tymoshenko had exceeded her authority "for criminal ends" by railroading Naftogaz into signing the agreement.

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