In a few words:

Ukraine’s new president Viktor Yanukovich soothed Moscow Friday by suggesting he would reverse key policies of his pro-Western predecessor, but won no public promise that Russia will lower Kiev’s onerous gas bills.

Yanukovych is already bending over backwards for Russia. First he removed a Holodomor memorial from the Presidential website the day of his inauguration, and now is giving in on many issues that the Orange Revolution fought for:

Gas Prices

Russian Prime Minister Vladimir Putin forged a long-term gas deal in 2009 with Yanukovich’s election rival, former Prime Minister Yulia Tymoshenko, removing preferential price treatment for Ukraine and bringing rates paid in line with the market.

Many analysts believe Kiev’s desperate public finances mean Yanukovich must push for change in the long-term gas deal.

…

The Kremlin Thursday said Ukraine should not seek to revise gas contracts. But Russian daily Kommersant reported on Friday that Ukraine will offer Moscow a one-third stake in the management of its gas pipelines in exchange for deep price cuts.

Ukraine’s acting prime minister and Yanukovich rival Oleksander Turchinov, said giving Moscow any control over the pipelines would be “a betrayal of national interests.”

Yanukovich has pleased Russia by making clear he opposes Ukraine joining NATO. But analysts have said Yanukovich would have to offer Moscow bigger incentives, such as a deal for the Black Sea Fleet to stay on, to win lower gas prices.

And that’s not all. Russia has a plan:

But neither Medvedev nor Putin discussed the gas pricing with Yanukovich, Russian officials said. They suggested it would be addressed once Yanukovich forms a government in Ukraine.

The Yanukovych group is acting fast to alter Ukraine’s current laws in order to build a loyal government:

Yanukovich’s Regions Party proposed a parliamentary amendment giving deputies the right to join a ruling coalition on an individual basis, rather than necessarily as part of a faction as under the current law.

Yanukovich lawmaker Vyacheslav Lukyanov said the change “creates the possibility of forming a coalition in the nearest future, possibly by the end of the week or the start of the next”.

…

The Regions Party has 30 days to form a new coalition in parliament or face the possibility of a snap parliamentary election.

Update – the law has passed:

Ukraine’s parliament approved a constitutional amendment Tuesday to allow deputies to defect from their parties and join a new coalition forming around Kremlin-friendly President Viktor Yanukovych’s party.The amendment will drastically ease Mr. Yanukovych’s ability to consolidate power, as it allows his party to lure deputies away from the camps of his rivals, including the bloc of former Prime Minister Yulia Tymoshenko.

The current constitution only allows parliamentary factions to join a coalition, not individual deputies. The rule has helped enforce party discipline even as alliances began to shift in Mr. Yanukovych’s favor after he was elected last month.

Mr. Yanukovych’s rivals lashed out against Tuesday’s vote, with a member of former President Viktor Yushchenko’s party calling it a”constitutional coup” and vowing to challenge it in court.

A loyal government can quickly adopt many of the lingering issues that Russia is hoping to return to its favour:

Russia’s Black Sea Fleet in Ukraine’s Sevastopol

Yanukovich suggested he would let Russia’s Black Sea Fleet remain at its base in the Crimean peninsula port of Sevastopol after the current lease expires in 2017. Former President Viktor Yushchenko had stressed he wanted Russia out by the deadline.

Heroes of Ukraine

Yanukovich also said he would scrap orders Yushchenko signed which elevated two World War II-era nationalists reviled by Russia to the status of “Heroes of Ukraine.”

Mr. Yanukovich, who must avoid alienating western Ukrainians in order to govern effectively, said Friday that a decision on the award would be made before the 65th anniversary of the Soviet victory in World War II in May.

He added that he would also evaluate an earlier award granted by Mr. Yushchenko to another Ukrainian nationalist and World War II partisan, Roman Shukhevych.

The decrees angered Ukraine’s former imperial master Russia and increased its distaste for Yushchenko, who pushed his nation toward NATO and sought to shed Moscow’s influence.

Economic alignment

Yanukovych later met Russian Prime Minister Vladimir Putin, who urged the visiting president to bring Ukraine into a Moscow-backed customs union comprising Russia, Belarus and Kazakhstan.

“Join the customs union,” Putin told Yanukovych, who chuckled and said nothing in response.

he prospect of Ukraine joining the Moscow-backed customs union has raised concern in the European Union and would likely damage or derail Ukraine’s chances of EU integration. [AFP]

Russian language in Ukraine

“The Ukrainian language will remain the only state language in the country,” said President of Ukraine Viktor Yanukovych in the city of Kanev by the grave of Taras Shevchenko, where the celebrations in honor of the poet’s birth anniversary are being held.

Meanwhile, during the election campaign, Yanukovych claimed he would seek to make Russian a state language if he were elected a president.Though later, speaking to voters, he said that this would change the constitution, and the Party of Regions did not have enough votes in parliament.

Therefore, Mr.Yanukovich offered to make Russian an official language of communication in those regions of the country where the most people would vote for this. [InfoCentre]

Update: Groups are already starting to gather en masse to protest Russian as a second state language:

Ukraine’s nationalist forces have threatened to hold mass protests if President Victor Yanukovych annuls the decree awarding the Hero of Ukraine, the country’s highest honor, to Stepan Bandera and Roman Shukhevych.

“The Ukrainian president made pledges to Russia concerning the language, church, Shukhevych and Sevastopol. This is something he will run against before he learns to run the state in the interests of the state itself. What are we going to do? Definitely, we will stage serious protests,” Ihor Mazur, leader of the Kyiv branch of the UNA-UNSO nationalist organization, said at a news conference in Kyiv on Tuesday.

The former President Viktor Yushchenko released a statement noting his displeasure in the selling out of Ukraine’s national interests:

The first official visit by Viktor Yanukovych to Moscow didn’t address any key problems in the relations between Ukraine and Russia, Yushchenko notes.
“The Russians didn’t send any signals with regard to revising the crippling terms of the gas-supply contract or delimitating the common border without which a visa-free travel agreement with the EU is impossible. Moscow continues to play hardball with Ukraine in order to make Ukraine change its foreign policy course and subjugate Ukrainian interests to those of Moscow,” Yushchenko says.
“The Kremlin resorts to economic (dragging Ukraine into the Customs Union) and military levers (insistence on the continued stationing of its Black Sea fleet in Crimea),”

Will relations between Russia and Ukraine improve under this new regime? Seeing the attitude of Putin so far, it doesn’t look so good:

Speaking before reporters as he met Putin, Ukraine’s new President Viktor Yanukovych complained about the political chaos in his country in recent years and told the Russian leader: “I don’t wish it upon you.”
Not missing a beat, the Russian president-turned-prime minister smiled and said: “Send us your ‘salo’ instead”.

Salo for those who don’t know is a cured slab of back fat pork (unrendered bacon) but is also a derogatory symbol of Ukrainians:

In Eastern-European humour, salo is a stereotypical attribute of Ukrainian culture, analogous to vodka and bears with balalaikas for Russian; beer and wurst for German; oatmeal for English; Coca-cola and cheeseburgers for the US culture.

It really is the candy man situation all over again: