SPY EYES

For the time being, Ukraine’s Yanukovych chooses to toe the line of its “former Soviet master”: but many in Kiev protesting in favour of a “European future” are fearful of being subjugated to “Mother Russia” yet again – even though the EU offers very little when it comes to dreams as well as reality

Just when everyone thought that the days of the Soviet Union were over, and that Russia is not as powerful a superpower that the U.S.S.R. once was, a recent row – both inside Ukraine and in the Eurasia region – has revealed the extent of Russia’s power in its immediate strategic vicinity as well as its desire to remain dominant over its erstwhile Soviet member/client states. On November 29, 2013, at the EU’s Eastern Partnership Summit in the Lithuanian capital of Vilnius, Ukrainian President Viktor Yanukovych confirmed that his country would delay signing the association agreement with the EU until the latter offers more attractive economic aid to his country. According to RT.com, Ukraine has a US$60 billion debt repayment liability – approximately one-third of the country’s GDP – and the EU has offered only 1 billion Euros worth of compensation, with Lithuanian President Dalia Grybauskaite stating that the trade agreement terms won’t be changed: “The EU isn’t going to bargain further. All the key terms are known. There will be no new ones”.

According to Yanukovych (who is seen above sitting to the right of European Parliament President Martin Schulz at the Vilnius Summit), Ukraine needs more time to get prepared “to minimalize[sic] any negative effects in the initial period, which will definitely be felt by vulnerable parts of Ukrainian society”, as reported by Interfax. The Ukrainian leader spoke of “short-term economic consequences” that the country might face by signing the EU agreement: without international aid, investors fear that Ukraine will struggle to repay US$ 7 billion of hard currency debt falling due next year, while it is also dealing with a large balance of payments deficit and unpaid gas bills from Russia – which is likely to worsen if Ukraine angers Moscow by ditching the Kremlin for Brussels. For the short term, Brussels has so far offered 610 million euros to Ukraine; but EU officials say that are in discussion with the International Monetary Fund, the World Bank and other major financial institutions on ways to help Ukraine.

However, the reality behind Ukraine’s refusal to sign the 900-page Association Agreement with the EU – or delay it, as its President says – is the overwhelming pressure from Russia, its former Soviet ally and a country which still controls Ukraine’s economy in many ways. Russia, which is forming the “Eurasian Economic Community” and wants Ukraine to join it instead of making what it calls the “suicidal” decision of joining the EU, is still Ukraine’s main source of energy, loans and trade. The Eurasian Economic Community (which can also be abbreviated as the EEC, like the “European Economic Community”, which is the EU’s Customs Union) or the Eurasian Customs Union (ECU) is a Russia-led customs union that by 2015 will also include other CIS (Commonwealth of Independent States, a post-Soviet body again led by Russia, and consisting of all the former member states of the Soviet Union/U.S.S.R.) members like Armenia, Tajikistan, and Kyrgyzstan.

This tug-of-war actually began four years ago, when the EU proposed an “eastern partnership” with Ukraine as well as Armenia, Azerbaijan, Georgia, Moldova and Belarus. The EU offered cooperation, free trade and financial contributions in exchange for democratic reforms: the only thing that was not offered was EU membership. The EU’s other – or perhaps real – goal (even though it was not as openly expressed) was to limit Russia’s influence and define how far Europe extends into the east. For Russia, the struggle to win over Ukraine is not only about maintaining its geopolitical influence, but also about having control over a region that was the nucleus of the Russian empire a millennium ago. The word Ukraine translates as “border country” and many feel the capital Kiev is the mother of all Russian cities.

This helped create Cold War-style grappling between Moscow and Brussels. The Russian president, hardened by his fights in the Kremlin, is more adept than EU bureaucrats at manipulating people with venality and affections: none of the top European politicians made a serious effort to win over Ukraine, with neither German Chancellor Angela Merkel nor European Commission President José Manuel Barroso flying to Kiev to convince its wavering president. Eventually, European Union foreign policy chief Catherine Ashton went on a two-day visit to Kiev, and was pictured walking among the demonstrators at Maidan and meeting with Ukrainian President Viktor Yanukovych. U.S. Assistant Secretary of State Victoria Nuland also traveled to the Ukrainian capital in an effort to help “save Ukraine’s European future”. In Russia, the State Duma issued a statement condemning Western countries for interfering in Ukraine’s internal affairs and putting pressure on the country’s government, echoing earlier sentiments communicated by Foreign Minister Sergei Lavrov.

On the other hand, there was “unprecedented pressure” from the Kremlin, with Russia using “everything in its arsenal” to woo Ukraine and keep it from signing the EU Association Agreement, according to former Polish Prime Minister Aleksander Kwasniewski. According to sources in Kiev, The official reason for the agreement’s failure is Yulia Tymoshenko, the opposition politician who has been in prison for the last two years. The EU had made her release a condition of the agreement. Yanukovych was unwilling to release his former rival, and last week the parliament in Kiev failed to approve a bill that would have secured her release. A controversial figure himself, Yanukovych is largely blamed for the political persecution of Tymoshenko, who is currently serving a seven-year prison sentence for abuse of power for signing a gas deal with Russia. Critics say her conviction was a case of political revenge, and many observers see Tymoshenko’s incarceration, as well as a number of unfulfilled political reforms, as reasons Europe hasn’t offered Ukraine full membership in the in the EU.

Even so, it is highly unlikely that Yanukovych would even risk applying for EU membership. From Yanukovych’s perspective, he doesn’t want to make a choice between the EU and Russia. Ukraine has to balance those two sides in order to maintain its sovereignty, its independence: moving towards one side, either Russia or the EU, would damage its relationship with the other side.

Amidst all of this, Russian President Vladimir Putin’s decisive move came on Nov. 9, when he met with Ukrainian President Yanukovych at a military airport near Moscow (the above picture shows the two meeting at the Zavidova residence in the Tver region on March 4, 2013). The meeting was so clandestine the Russians initially denied that it had taken place at all. Der Spiegel notes that the inability of European bureaucrats to keep up with the Kremlin’s manipulations – or Kiev’s political calculations – has cost the EU a trade deal with Ukraine, and severely damaged its foreign policy. Though Ukraine’s decision to not join the EU seemed as abrupt and last-minute, it was obvious that Ukraine was under immense pressure from the Kremlin to not move out of Russia’s orbit; and eventually, Ukraine gave way to the latter instead of moving closer to Europe. This was admitted by the Ukrainian President as well as the powers that be in Kiev as well as in Moscow.

In the end, the Russian president seems to have promised his Ukrainian counterpart several billion Euros in the form of subsidies, debt forgiveness and duty-free imports. The EU, for its part, had offered Ukraine loans worth €610 million ($827 million), which it had increased at the last moment, along with the vague prospect of a €1 billion loan from the International Monetary Fund (IMF). Yanukovych chose Putin’s billions instead.

Eurodialogue.org states that “A strong Russia allied with Ukraine gives Moscow confidence and strength, particularly in dealing with Europe, while a Russia without Ukraine is weak to its core”. Russia’s interests in Ukraine go beyond the economic sphere. Ukraine is also important for military reasons; the Ukrainian city of Sevastopol is the headquarters for Russia’s Black Sea Fleet. Ukraine’s strategic location as a borderland between Russia and Europe and its proximity to Russia’s own breadbasket and economic heartland in the Volga region make the country key to Russia’s geopolitical strength and, ultimately, its survival. Eurodialogue.org continues by analyzing the above-mentioned strategic importance of “Ukraine to Russia [which is] is not lost on the Europeans and the Americans, who have been trying to lure Ukraine into the Western camp since the fall of the Soviet Union. Ukraine did turn pro-Western under the Orangist government of Viktor Yushchenko from 2005-2010, but Russia’s resurgence reversed this trend when the pro-Russian Viktor Yanukovych became president in February 2010”.

Even now, more than 20 years after Ukraine’s independence, many Russians don’t accept its autonomy. “They don’t see the Ukraine as an independent state. They’ve never accepted it psychologically”, according to Rand Corporation’s Stephen Larrabee. Zbigniew Brzezinski, the former U.S. national security adviser to president Jimmy Carter, famously wrote that “without Ukraine, Russia ceases to be an empire, but with Ukraine suborned and then subordinated, Russia automatically becomes an empire.”

The Ukrainian President’s decision was met with protests in Kiev, from Ukrainian citizens (pictured above) who were hoping for a future with Europe, and were tired of living in Russia’s orbit even after the fall of the Soviet Union (The Business Insider referred to Russia as Ukraine’s “former Soviet master”). Angry protesters in Kiev are demanding President Yanukovych’s resignation, saying that he has compromised Ukraine’s sovereignty and integrity at the behest of the wishes and desires of the Kremlin rather than the Ukrainian people who elected him. Russian lawmakers called on the Kiev protesters to “stop the illegal actions” that they said were destabilizing the country. According to Stratfor, Moscow is carefully gauging the current demonstrations since Ukraine is one of the most important countries to Russia’s defensibility and security: but considering the multi-dimensional foreign support for the movement, and the prospect that protests will resume, the Kremlin’s silence is “peculiar”. With Ukraine so critical to Russia, one would expect that its leaders would be more publicly active in Ukraine and in the countries that support the protesters. Its silence has caught Stratfor’s attention. “We do not necessarily know how Russia will respond, but given Ukraine’s importance, we know that it will”, says Stratfor’s latest analysis (published December 12, titled “In Ukraine, Why is Russia So Quiet?”) in unique take on the issue.

Western support to the Kiev protesters is not purely rhetorical or diplomatic; Western non-governmental organizations and state-sponsored groups are on the ground supporting the protesters as well. In fact, these groups have operated in Ukraine for a long time. They were instrumental during the 2004 Ukrainian election and subsequent Orange Revolution that brought in a more Western-friendly government. The Western NGOs provided financial support, organizational and political support, training for the civil and political leaders and propaganda. Two of the three most popular opposition leaders have ties with Western NGOs. Vitali Klitschko and his political party, the Ukrainian Democratic Alliance for Reforms, have deep ties to Germany, particularly German Chancellor Angela Merkel’s Christian Democratic Union Party and the Konrad Adenauer Foundation. Yatsenyk’s foundation Open Ukraine also has German partners, such as the Friedrich Ebert Foundation, and lists among its American partners the U.S. State Department and prominent NGOs such as the National Endowment for Democracy. The Russian government has long accused such NGOs of meddling in others’ domestic affairs, including the “color revolutions” in Ukraine in 2004, Georgia in 2003 and Kyrgyzstan in 2005.

CBC News’ Andre Mayer analyzes Ukraine’s latest protests (which have also been dubbed the Second Orange Revolution, or “Eurolution”) and its “love-hate relationship” with “Mother Russia” by talking to specialists on Ukraine and on Ukraine-Russia relations. Taras Kuzio, a research associate at the Canadian Institute of Ukrainian Studies, says that “We have to understand that Viktor Yanukovych is neither pro-Russian nor pro-European – he’s pro-Yanukovych… He’s going to do anything he can to try and stay in power”. Eugene Chausovsky, a Russia analyst for the global intelligence firm Stratfor, says that had Yanukovych opted for the EU association agreement rather than the Russian custom union, “we would have probably also seen protests, except from a completely different segment of society…It shows the difficulty of ruling Ukraine. It’s a split country”.

To an extent, Vijai Maheshwari agrees: what has become increasingly clear is that the Kiev protests are not only against the European ‘nyet’: the European snub was just a catalyst. They’ve snowballed into a populist movement against the venial, autocratic government of Yanukovych. Having watched passively for the past three years as the president and his henchmen have amassed vast wealth, clamped down on the media, and jailed their political rivals, common Ukrainians have finally had enough. A sticker pasted on the front door of Maheshwari’s building read, “This revolution is not about Europe. It’s against the corrupt dictator Yanukovych”.

However, experts note that Yanukovych is hedging his bets by making no commitment to join the Moscow-led customs union, while also holding out the possibility that Kiev could still sign an association agreement that would deepen cooperation with the EU, if not serve as a free trade agreement. According to Public Radio International, Ukrainian President Yanukovych is strategizing to get the best of both worlds: though he might prefer lower gas prices from Russia than any promises or perks offered by the European Union, Yanukovych is dealing with massive protests in Kiev over his decision to turn away from the EU in favor of a trade deal with Russia, and now, he appears to be courting both sides for the best deal he can get to help his country out of a recession that has lasted more than a year. As the Ukrainian President “assured an EU official” (according to the BBC) that he will sign a trade and security agreement with the EU, no timeline has been announced. With Russia and the West dug in to their positions of trying to sway Kiev toward them, the Ukrainian government appears torn over how to proceed, and national polls show a roughly equal division in the country’s population over which path to take. The government has had to station riot police in areas where protesters congregate (pictured below), sometimes leading to violent confrontations and high-handedness by security officials – reminiscent of the Soviet era – which have apparently “disgusted” U.S. Secretary of State John Kerry. “For weeks, we have called on President Yanukovych and his government to listen to the voices of his people who want peace, justice and a European future. Instead, Ukraine’s leaders appear…to have made a very different choice,” he said, referring to the attempted clearing of Maidan by riot cops.

According to The Moscow Times, Ukrainian Prime Minister Mykola Azarov said Wednesday that Ukraine was not going to discuss joining the Russia-led Customs Union at an intergovernmental meeting with Moscow next week, and that talks with the EU were ongoing over an association agreement. But, speaking at a Cabinet meeting, Azarov also said Russia and Ukraine were close to a decision on bilateral trade, while Yanukovych said Tuesday that it was not possible to talk about the future of Ukraine without talking about restoring trade relations with Russia. “I want to draw attention to the motives behind the protests of our citizens,” Azarov said. “Those who came to Maidan demand the immediate signing of the Association Agreement with the EU. The government also is in favor of signing the agreement as soon as possible, but we want to create conditions under which losses for the Ukrainian economy will be minimized”. Azarov also said European officials were “not in a hurry” to help Ukraine financially, but Reuters reported late Wednesday that the EU was holding talks with the International Monetary Fund and the World Bank on arranging assistance for Kiev were it to sign the association deal.

Viktor Mironenko, head of the Ukrainian Research Center at the Russian Academy of Sciences, said Western politicians’ statements did not represent serious pressure on Ukraine when compared to the actions of Russian authorities. “Today, Russia announced that it would no longer buy delivery vehicles produced in Dnepropetrovsk, so both economic and political pressure on Ukraine will be continued,” Mironenko said, “but the pressure that started this summer has been so strong that it is difficult to imagine how much stronger it can be in the future”. Russia tightened customs controls at the Ukrainian border over the summer, signaling to Kiev that economic punishment was in store if it signed the EU deal. Mironenko also said that even though Ukraine did need economic help, it was unlikely that the EU would provide it until the situation in the country became stable, adding that 20 billion Euros was a “fantastical amount” and the mechanisms for the EU to give it were unclear.

According to Vijai Maheshwari of The Daily Beast, the Ukrainian people’s “Eurolution” – the second time the streets of Kiev have been full of protesters since the Orange Revolution pro-democracy protests of 2004 – is a “public relations godsend for the European Union”, which is eager to paint the narratives as a contrast between an “open Europe” and a “closed Russia”. In fact, many Europeans – especially those who are full-fledged members of the European Union – are baffled as to why Ukrainians are so determined to join a broken bureaucracy and what one Italian citizen termed “the iron rule of Berlin”. For the protesters, however, a weak Europe was still vastly preferable to their country’s corrupt and sclerotic oligopoly. An accession agreement with Europe represented a chance for this struggling, isolated nation to become part of the modern world. Though Russia still enjoys support in the eastern parts of the country, many in the capital – Kiev – and Western Ukraine view Moscow with suspicion. Their worst fear is that the country could fall under the thumb of the Kremlin and become a vassal state of “mother Russia” yet again. As Ukrainian protesters in Kiev want their country to be more like Poland and less like Russia, a statue of Lenin in central Kiev was ruthlessly demolished by youths from the far-right Svoboda nationalist party.

Public Radio International states that, in a sense, the protests in Ukraine may have produced the results they were meant to achieve. Nevertheless, the political damage to the Yanukovych regime is done, and he must make significant repairs to his local image and prestige if he wishes to remain in office, much less get re-elected. In the age of social media and mass public awareness thanks to online connectivity, the Kiev protests against Yanukovych and in favour of the Ukraine joining the EU have acquired the name “Euromaidan”. Yanukovych’s decision to suspend talks with the EU on political and free trade accords have sparked the largest protests in the country since the pro-democracy Orange Revolution in 2004. According to Yevgen Sautin of The Independent, “the failure of the Yushchenko Presidency led to apathy and disillusionment among many erstwhile supporters of the Orange Revolution; the new “Euromaidan” protests have rekindled public demands for change. This provides a tremendous opportunity to channel public grievances into real political impetus for economic upgrading and improvement of governance. A stronger, more prosperous Ukraine would not have to build its entire national strategy on playing off Russia against the West”.

European leaders say the trade pact with Ukraine would have brought investment. But the country’s Soviet-era industry relies on Russian natural gas, giving Moscow enormous leverage. Moscow has condemned what it sees as fierce foreign pressure on Ukraine, and the EU has accused Russia of using economic blackmail against Kiev. Russian media have raised the specter of civil war in Ukraine to wave the flag for Putin.

A day after European and U.S. officials held talks with Ukrainian President Viktor Yanukovych in Kiev, Putin used a state of the nation address to tout the economic benefits of joining the Eurasian Economic Community customs union that he wants Ukraine to be part of. The Russian President directly addressed the criticism of Ukraine (and its decision) by EU leaders as well as the U.S., saying that the free trade deal between the EU and Ukraine would have been a major threat to the Russian economy. “Our integration project is based on equal rights and real economic interests,” Putin said of the customs union with Belarus and Kazakhstan, which he wants to turn into a political and trading bloc to match the United States and China. “I’m sure achieving Eurasian integration will only increase interest (in it) from our other neighbors, including from our Ukrainian partners.” Putin’s ambition to create a Eurasian Union stretching from the Pacific to the EU’s eastern borders depends largely on whether Ukraine signs up, bringing in its rich mineral resources and its large market: a bridge to the 28-nation bloc.

A clearer picture of the EU versus Russia’s ECU emerges thanks to the following map and statistics:

The big red/orange mass that represents the ECU already has a clear size/territorial advantage over the EU, and it covers a natural resource-rich land in Russia and Kazakhstan. The three nations currently involved have a combined population of around 165 million people and a US$ 2.3 trillion GDP. Adding in Ukraine and Georgia, the ECU would constitute around 205 million people and US$ 2.5 trillion GDP. Even though these are big numbers, they still pale in comparison to the EU which has more than 500 million inhabitants and a GDP of more than US$ 16 trillion – despite the fact that the EU and its member states are facing financial crises that are bordering on the dissolution of the Euro currency, while Russia is enjoying relative economic stability because of strong fiscal policies instituted in the first Putin presidency, during which the Kremlin saved foreign currency reserves generated from oil and gas sales, and consolidated its global economic position when the Global Financial Crisis (GFC) of 2008 virtually shattered if not decimated the economic supremacy of capitalist countries in the West. As a further comparison, China has a population of 1.3 billion and a GDP of US$ 8.2 trillion, and the U.S. has a population of 313 million people and a GDP of almost US$ 16 trillion. The ultimate hope, which may also seem like a far-fetched dream, for the Eurasian Customs Union is that countries like Uzbekistan and Turkmenistan will join in. More fantastical plans exist too: One Russian politician (a member of the Putin-linked United Russia party) has floated the idea of eventually broadening the union to include historical allies such as Mongolia and Finland, or even Cuba and Venezuela, thus taking the ECU from a regional bloc to a global customs union that is not limited to territorial linkages or advantages incurred by sharing borders.

In conclusion, Ukraine has become a new battleground for the EU and Russia, with both asserting their strategic dominance in terms of economic “carrots” and “sticks” as well as securing their future regional hegemony in their respective spheres of influence through economic if not military means. The economic, political, and geostrategic realities for all three parties concerned – the European Union, Russia, and most importantly, the lynchpin Ukraine – have been thoroughly discussed and analyzed in this article, to the maximum extent possible given the available public information as well as views and analyses of other experts on the subject: including their conclusive thoughts on how things may develop and what the future holds for all the three parties. Stratfor’s Russia analyst Chausovsky estimates – and polling suggests – that about 60 percent of the Ukraine population is pro-EU, even though it is difficult to gauge public sentiment, and angering 40 percent of the population that is pro-Russia is also not a wise policy option. Most of the pro-EU population is in Kiev – the center of the anti-government protests – and in the Western part of the country. Rand Corporation’s Stephen Larrabee ominously states that “this is the beginning of the end, in my view, of an independent, stable Ukraine”, even though other Ukraine watchers aren’t so sure of that outcome, and see the current turmoil as part of a delicate balancing act that reflects the country’s inherently divided loyalties. Viktor Mironenko, the head of the Ukrainian Research Center at the Russian Academy of Sciences, says that given the aggressive tug of war over the country, the future of Ukraine was definitely unclear: “Ukraine has turned into a reason for a fight between Russia and the West. The situation in the country could develop in a completely unexpected direction”. With Russia and the West dug into their positions of trying to sway Kiev toward them, the Ukrainian government appears torn over how to proceed, and national polls continue to show a roughly equal division in the country’s population over which path to take. As of now, it seems that the Ukraine has chosen Russia over the EU, simply because of the ground realities and hard facts: because the EU wasn’t offering as much as Russia was, and also because rebukes and repudiations from the EU and/or the West (regardless of their frail economic state after 2008) do not have as much of an impact on Ukraine as they do when they come from the Kremlin; to put it simply, due to a variety of social, cultural, economic and historical reasons, the Russian “stick” is bigger for Ukraine than the Western one, even if the “carrot” cannot really be quantified for the long run (though Yanukovych is not coming out from a bad economic deal with Putin, even if citizens of Kiev think that it is time to stop living in the shadow of “Mother Russia” and adopt pro-West, pro-European politics – despite the disillusionment and disenchantment of full-fledged EU citizens with the supranational system and the “iron rule of Berlin” that the protesters want Ukraine to submit to). It appears that the protesters in Kiev – who are enjoying overwhelming support from the EU, the U.S. and the West, and oblivious to the fact that if they eventually succeed in getting their government to sign a pact with the European Union, they would still not get EU membership, and would invoke the wrath of Russia with whom they remain deeply interconnected in many facets; and ultimately, that they will be sacrificing some part of their national sovereignty to willingly invite a new regional hegemony upon themselves (instead of sticking to the hegemony that they know and are familiar with, as President Yanukovych has done).

Spain’s leading newspaper, El Pais, has adequately summed up the prevailing mood and public sentiment in Eurasia (Europe, Ukraine and Russia) with the headline “Putin 1 Europe 0”.

TACSTRAT ANALYSIS
By Shemrez Nauman Afzal