Feb. 25 (Bloomberg) -- The European Union responded to the Arab uprisings of 2011 with pledges that echo what it is now offering Ukraine: “full support to the transition” in a “new partnership” that yields “improved opportunities for economic prosperity” plus “strengthened regional stability.”
With Egypt’s first democratically elected president ousted by the military and Syria in the midst of civil war, few of those promises have been realized. The euro crisis made money scarce and triggered a backlash against granting financial assistance -- obstacles that haven’t gone away as Ukraine clamors for European aid.
“The EU’s failures to support Egypt and transition governments in the Arab world should make one very cautious about their capabilities,” said Andrew Weiss, who worked on Ukraine policy in the Clinton administration and is now with the Carnegie Endowment for International Peace in Washington. EU policy toward Ukraine “has been one of bold talk and paltry action.”
As Ukraine teeters on the economic brink, the fragmented opposition tries to form a government, and the West and Russia vie for influence, the country’s aspirations are supercharged: $35 billion in aid and the promise of EU membership. Disappointment may loom on both counts, souring what appeared to be a rare diplomatic triumph for the EU just four days ago.
“The key thing that has to happen for everything else to happen is a new and effective government which tackles all the deep-seated problems that haven’t been addressed since 1991,” said Andrew Wilson, an analyst at the European Council on Foreign Relations. “An incompetent government, one that concentrates on nationalist symbols, one that has too many representatives of the old guard, isn’t going to get money from the West, which still has to be conditional.”
Ukraine’s interim finance minister set the bar high with a call for a two-year $35 billion rescue package. Yulia Tymoshenko, the former prime minister, declared after being released from prison that EU membership is just around the corner.
EU economic aid hinges on the new government meeting strict conditions, which is one reason why Ukraine said yesterday it is looking to the U.S. and Poland to provide emergency loans “within the next 1-2 weeks” to keep the government afloat.
Ukrainian expectations were stoked when Elmar Brok, head of the foreign affairs committee in the European Parliament, predicted that the first installments of a $20 billion package could flow as early as next week. The EU parliament has little control over how aid is doled out by leaders like German Chancellor Angela Merkel, a reluctant supporter of Greece when the debt crisis broke out in 2010 and went on to threaten the entire euro area.
“Events in Ukraine have not found unified support in important donor states such as Germany,” London-based Nomura Holdings Inc. analysts Dmitri Petrov and Peter Attard Montalto said in an e-mailed note. “Chancellor Merkel may find it politically difficult to explain another cash outlay.”
European leaders haven’t spelled out the size or terms of an aid package, which would draw on the EU’s central budget, national budgets and the European Investment Bank, the bloc’s project-financing arm. EU President Herman Van Rompuy stressed yesterday that the EU stands ready to open its markets to Ukrainian goods -- benefits that would take a while to filter through to the economy.
“The Europeans have to face the fact that if they want to be true to their word, they also have to fork over some cash,” former U.S. National Security Adviser Zbigniew K. Brzezinski said on the Charlie Rose show late last week, as events were unfolding that led to the ouster of Ukrainian President Viktor Yanukovych.
Brzezinski called it “short-sighted” of European leaders to put off making a financial offer to Ukraine after Yanukovych spurned a EU trade deal in November, taking a $15 billion loan from Russia instead. European reaction was to issue regular reminders that the trade offer still stood, once Ukraine got a government that would abide by its terms.
That approach hit the wall last week, when security forces moved to break up the pro-democracy camp on Kiev’s Independence Square, leading to as many as 82 protest-related deaths, spurring insurrections in other towns and raising the prospect of civil war in the country of 45 million.
On a hastily arranged mission to Kiev, Polish Foreign Minister Radoslaw Sikorski, German Foreign Minister Frank-Walter Steinmeier and French Foreign Minister Laurent Fabius persuaded Ukraine’s feuding politicians to set up a new coalition government within 10 days and to bring forward the presidential election by three months to December.
Within 24 hours, that diplomatic coup was history. Ukraine’s parliament ousted Yanukovych, leading to accusations from Russia, the deposed president’s principal benefactor, that Europe had lost control of the forces it unleashed.
“The next three months will determine not only Ukrainian future but also very much the EU credibility as global player,” Artis Pabriks, a former defense minister of Latvia who is running for a seat in the EU parliament, said in a Twitter posting.
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