Putin Beats Europe in Battle for Ukraine
With the European Union afflicted by financial troubles and rising nationalism, it's particularly impressive that the people of one country -- Ukraine -- still want in. Unfortunately, their leadership is moving in the opposite direction.
Over the weekend in central Kiev, tens of thousands of demonstrators braved the November chill and even tear gas to protest their leaders' sudden decision to scuttle an EU trade deal. As recently as last week, the pact had seemed on track to be signed at a Nov. 29 summit in Vilnius. Stefan Fule, the EU commissioner for enlargement, had praisedthe "determination" of Ukrainian President Viktor Yanukovych to push through the required legislation, which included a law allowing Yanukovych's political rival, Yulia Tymoshenko, to leave prison and go to Germany for medical treatment.
Apparently, Russia's all-out effort to keep Ukraine out of the EU has achieved some success. Ukraine's about-face came after Yanukovych made two semi-secret trips to Russia for talks with President Vladimir Putin, who must have offered something more persuasive than whatever cheap loans and grants the EU was willing to put up.
Yanukovych and his team were determined to sell their country's allegiance to the highest bidder. As Prime Minister Mykola Azarovput it on national television, modernizing Ukrainian industry to EU standards will cost at least 150 billion to 165 billion euros ($203 billion to $224 billion). "We turned to our European partners for financial aid," he said. "The negotiations we conducted led to just one number: 1 billion euros over seven years." It is unclear where that number comes from: EU officials have never made it public.
According to Azarov, the Russian leader promised to renegotiate Ukraine's contracts with Gazprom, the Russian state-controlled natural gas supplier. Ukraine pays about $410 per thousand cubic meters of natural gas, compared with the $175 Gazprom charges the more pliant Belarus. A price cut could help Ukraine patch its budget deficit without reducing gas subsidies to households 18 months before the next presidential election. Gazprom denies a price reduction has been agreed, but that may just be Putin playing his cards close to his chest.
Whatever the motivation, Ukrainian government announced on Nov. 21 that it was suspending EU association talks, and the parliament threw out the Tymoshenko bill. Azarov called for the EU, Ukraine and Russia to negotiate a free-trade regime together -- a proposal that Linas Linkevicius, foreign minister of summit host country Lithuania, saidwas unprecedented and "not an option."
For many Ukrainians, the about-face was heartbreaking. To them, the EU association agreement was a cultural choice, not an economic one. The nation's middle class, and a majority of people living in the western part of the country, saw it as a statement of values and identity.
"About half the country has been building their own personal Europe at home," editor Katerina Kobernik wroteon the website Slon.ru. "They start with small things: not chucking cigarette butts from their windows, planting flowers on balconies, trading cars for bicycles for a number of personal reasons, teaching their children tolerance and several foreign languages. With schizophrenic persistence, they refuse to bribe judges and police, paying for this with lost cases and huge fines."
It was these people who took to the streets on Nov. 24 to demand that Yanukovych sign the EU deal no matter what. Police estimated the crowd at 25,000, but participants and aerial photographs suggest the number was closer to 100,000. Protesters clashed with police, who used clubs and tear gas.
Many of the demonstrators remembered the Orange Revolution of 2004, when the entire city seemed to stop working and hundreds of thousands occupied Independence Square in central Kiev. Back then they demanded, and forced, a vote recount in a presidential election, overturning a Yanukovych victory in favor of a more liberal candidate, Viktor Yushchenko.
The latest protests have been dubbed EuroMaidan, a reference to the Ukrainian for Independence Square. Following the #Euromaidan Twitter hashtag is the best way to stay informed on the protests, because the Ukrainian news media's independence has been compromised by a series of deals geared toward the 2015 presidential election.
This week, there are no classes in the universities of western Ukrainian cities such as Lviv, Ivano-Frankivsk and Uzhhorod: Students are out protesting. In Kiev, there have been no mass work stoppages or student strikes, but on Monday evening thousands of people again flooded the city center.
"The time has come to finish what the revolutions of 1991 and 2004 started," business-school teacher Yevhen Hlibovytsky wroteon Facebook.
Sadly, the Orange Revolution did little to improve ordinary Ukrainians' lives, setting the stage for Yanukovych's triumphant political comeback. Fewer people are now inclined to fight to the bitter end for their vision of a European Ukraine. The current protests have no clear leaders and no single set of demands. Some want the resignation of Azarov's government, others just want Yanukovych to sign the EU deal.
Commentators saw the EuroMaidan as too chaotic and too middle-class, reminiscent of Moscow's failed "Snow Revolution" of 2011-2012. "Two Maidans are impossible," wroteRussian political analyst Gleb Pavlovsky, who witnessed the 2004 revolution as a consultant to Yanukovych. "You cannot enter the Maidan twice."
The EU reaction smacked of betrayal. On Nov. 25, European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy issued a mild statementcriticizing Russia's stance and trying to make the case that any EU-Ukraine deal need not "come at the expense of relations between our Eastern partners and their other neighbors, such as Russia."
Barroso and Van Rompuy know this is not true. Choosing the EU would have much more serious economic consequences for Ukraine than could be addressed by a few billion euros in grants. "Europe wants Ukraine to tear itself away from Russia at its own expense," former diplomat Alexander Baunov wroteon Slon.ru.
The cynical Ukrainian government will go with whoever offers to bail it out. Distasteful as it may be for the EU, bailing out the government could bring into the fold millions of united Europe's most enthusiastic citizens. They would be poor, yes, but determined and idealistic. They would soon replace the government with a less corrupt one.
Europe, however, is not prepared to take on such a big project. Putin is a more determined player, so victory will be his -- until Ukrainians' patience truly runs out as it did nine years ago.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
To contact the author on this story:
Leonid Bershidsky at email@example.com