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Ukraine balances EU and Russia

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2 June 2011 09:23

John Besemeres is a Visiting Fellow in the Centre for European Studies, ANU. His recent articles on Russia's near abroad are available here, here and here.

Compared to Belarus, (see my previous post), the situation in Ukraine is much more nuanced, though it has many of the same features: an economy still only very partially reformed and heavily dependent on energy imports from Russia; a very strong Russian minority and a strong majority that speaks Russian either for preference or with fluency; a broadly pro-Russian autocratic leadership in trouble with the EU and other Western institutions for its abuses of human rights and democratic governance; and a traditional pro-Russian or simply Russian orientation in much of the country.

But the differences are very important. While President Yanukovych is very pro-Russian in matters of security, culture, religion, political outlook and historical understanding (more so than any previous president of independent Ukraine), on most economic matters he and his oligarch entourage are proving to be stubbornly independent, with a strong interest in trade with the EU. 

Ukraine is a much less homogeneous country linguistically and ethno-religiously than Belarus. And in particular, Yanukovych has a large Ukrainophone and nationalist voting bloc to deal with in the centre and west. Though he has treated them with contempt on some issues, especially in his first months in power when his poll ratings were high, as his popularity slumps (only just over 10% currently), he needs to ensure that he does not alienate them further.

Yanukovych gave Russia much of what it wanted when he came to power in February 2010, supplanting the fractious pro-Western Orange leadership of former PM Yulia Tymoshenko (braided hair) and former President Viktor Yushchenko (dioxin-ravaged face). But as Moscow began to push harder on various schemes of economic collaboration which appeared to threaten Ukraine's sovereignty and the interests of the oligarchs, Yanukovych and his colleagues dug their heels in. 

Russia has been deploying the gas weapon to try to break down Kyiv's resistance, offering reductions in the again soaring price of Ukraine's vital gas imports from Russia in exchange for Ukraine joining the Moscow-led Customs Union and agreeing to other forms of closer economic co-operation. Ukraine's economy is under great pressure (though less than Belarus') and Kyiv has been desperately seeking a lowering of Moscow's gas price.

But despite repeated and pressing invitations to join the Customs Union, Russia's touted alternative to the EU, Yanukovych continues to reaffirm that he will not do so, as it would jeopardise the prospect of Ukraine's reaching a free trade deal and an association agreement with Brussels. Negotiations on these two deals, and a further agreement on visa-free travel, are well advanced, and EC President Barroso held out the prospect last month of the association agreement being concluded before the end of this year. Ukraine, unlike existing Customs Union members Russia, Belarus and Kazakhstan, is a member of the WTO, and the EU has repeatedly made clear that membership of the Customs Union would be inconsistent with any further integration with the EU. 

Last week Russia again broached the issue of Customs Union membership, with Medvedev deploying the argument that Kyiv could not sit on two stools at once (which is precisely what Lukashenka would like to do). But the Ukrainian parliament responded a day later with an overwhelming majority reaffirming its commitment to the priority of the agreements with the EU.

The issue is probably still not finally resolved. Negotiations with Brussels and Moscow are running in parallel, and on the Russian side they are less than transparent. EU dissatisfaction with Ukraine's deteriorating record on governance, human rights and corruption could still upset things, and cause Kyiv to opt for the greater comfort of Moscow's embrace in the certain knowledge that it would get no conditionality from them on that score. Ukraine's growing domestic volatility may also push them in Moscow's direction.

But on current form it looks as though Yanukovych may in the end stick with the so-called multi-vector policies of most of his predecessors, balancing between Europe and Russia, but with an assured place for each. 

If Moscow fails to prevent Ukrainian integration with the EU, it will be a huge blow to Russian national sentiment. For many Russians, a Russia without Ukraine seems absurd and unacceptable. Keep watching this space.

Photo by Flickr user jcrowley001.

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