Ukraine and the European Union

Ukraine’s President Viktor Yanukovych had much explaining to do at the summit meeting of the European Union in Vilnius, Lithuania last Thursday. After six years of negotiation on an EU-Ukraine trade pact and political association agreement which was finally due to be signed at Vilnius, he had to explain why he wasn’t going to sign it after all.
 
“The economic situation in Ukraine is very hard, and we have big difficulties with Moscow,” says Yanukovych in a private conversation with Germany’s Chancellor Angela Merkel that was broadcast by Lithuanian television. “I would like you to hear me. I was alone for three and a half years (since his election in 2010) in very unequal conditions with Russia...one to one.”
 
So Ukraine is putting the deal on hold indefinitely – and the EU promptly accused Yanukovych of being gutless. “If you blink in front of Russia, you always end up in trouble,” said the EU’s Commissioner for Enlargement, Stefan Fule. “Yanukovych blinked too soon.” At least 10,000 outraged Ukrainians who had reached the same conclusion came out on the streets of Kiev in protest on the following day.
 
It was starting to look like a rerun of the “Orange Revolution” that had forced Yanukovych out of power after he won a fraudulent election in 2004, so early Saturday morning the riot police attacked the protesters and drove them from the square. But on Sunday the demonstrators were back on Independence Square 100,000 strong, and Yanukovych had to issue a public apology for the attack.
 
We’ve been here before, haven’t we? The big Russian bully threatens some ex-Soviet country that is now looking west, and the craven local ruler gives in. Pro-democracy demonstrators come out in the streets, and peace, justice and pro-Western policies triumph. Except this time, it’s not like that.
 
The big Russian bully bit is still true. Moscow has already seen three of its former possessions in Europe – Lithuania, Latvia and Estonia – join the European Union. It sees the future of the remaining six – Ukraine, Belarus, Moldova, Georgia, Armenia and Azerbaijan – as a zero-sum game between Russia and the EU, and it plays hard ball.
 
After secret discussions with Russia in September, Armenia cancelled its association deal with the EU (which was due to be initialed at Vilnius), and joined the Eurasian Union instead. It’s just too dependent on trade with Russia.
 
Georgia initialed its deal with the EU in Vilnius because it had nothing to lose: since its war with Russia in 2008 it has no trade with its giant neighbor anyway.
 Russia has been turning the screws on Ukraine hard, because with 45 million people and a serious industrial base it is the most important of the ex-Soviet states. Ukraine’s trade in 2012 was almost equally split between Russia and the EU, but over the past year Russian-Ukrainian trade has fallen by a quarter.
 
“That’s a huge blow to our economy and we can’t ignore it,” Ukraine’s energy minister, Eduard Stavitsky, told the BBC. Stavitsky had asked repeatedly about getting compensation from the EU for the trade with Russia that Ukraine was losing as a punishment for its dalliance with “the West” – but “all we got were declarations that Ukraine would profit from a deal with the EU in the medium to long term.”
 
Unfortunately, politicians have to live in the short term, and Yanukovych’s problem (and Ukraine’s) is that the country is divided down the middle. His supporters are mostly Russian-speakers who live in the heavily industrialized eastern half of the country – and those are the people who will really suffer if Russia cuts off its trade with Ukraine.
 
Yanukovych would not have spent three and a half years negotiating a deal with the EU if he had no intention of ever going through with it. Why bother? He was trying to cut a deal that would satisfy the aspirations of pro-EU voters, especially in the nationalist, Ukrainian-speaking west of the country, without destroying the livelihood of his own supporters in the east.
 
Either the EU didn’t understand his dilemma, or it didn’t care. It demanded that he choose between east and west, and made no offer to compensate Ukraine for its big short-term losses if it signed a deal with the EU.
 
So Yanukovych has put the whole thing on indefinite hold, but that doesn’t mean he’ll throw in his lot with the “Eurasian Union” instead. If he can ride out the demos that are currently rocking Kiev, then in the longer term he will probably make a cautious return to talks with the EU.