Ukraine’s EU policies all about money, power
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When Ukrainian President Viktor Yanukovych faces EU leaders at an Eastern Partnership Summit that kicks off in Vilnius Thursday, the prevailing mood will be decidedly sour. Yanukovych has made it clear that he is not ready to sign a wide-ranging trade agreement with the 28-member bloc, which was supposed to be the summit’s main achievement.
Instead, he said in television interviews published Wednesday that he believes such bonding between Kyiv and Brussels premature, and that he expects that Russia will honour this position by offering fresh credit to his cash-strapped government.
EU top officials have laid the blame squarely at Moscow’s feet. Lithuanian President Dalia Grybauskaite openly accused Russia of blackmailing Ukraine.
“This country continues to apply very uncivilised methods,” she told Germany’s Die Welt newspaper.
Grybauskaite, who hosts the summit because her country holds the rotating EU presidency, was referring to trade sanctions that Moscow imposed against Ukraine and Lithuania in the past months, widely believed to be political punishment for both governments’ support for an EU deal with Kyiv.
Moscow has not only denied such accusations, but said it is Brussels who is pressuring Kyiv. The Russian Foreign Ministry even suggested that the EU was inciting the violent anti-government protests that have gripped Ukraine after the government declared last week that it was halting preparations for the EU agreement.
However, President Vladimir Putin this week openly admitted that Moscow has substantial economic interest in keeping Ukraine from signing a deal with the EU.
Speaking to reporters during a visit to Italy, he argued that it would make not only Ukrainian imports to Russia more expensive but also European goods delivered to Russia through that country.
“Should we suppress entire sectors of our economy to please them?” he quipped about criticism from EU bosses Jose Manuel Barroso and Herman Van Rompuy.
Russian analysts, meanwhile, argued that Yanukovych was forced to turn to Russia because it offers far more and easier credit than the EU while pointing out that the Ukrainian leader had staunchly resisted joining the Moscow-led Customs Union.
Yevgeny Kiselyov, a veteran Russian TV anchor who has lived in Ukraine for the past years, explained that Yanukovych’s key aim was to keep his country’s economy afloat in the run-up to the presidential election in March 2015.
“He needs money to win,” Kiselyov told dpa.
Brussels has said signing the EU agreement would save Ukraine 500 million euros (678 million dollars) annually and increase GDP by more than 6 per cent in the long term.
But experts agree that Ukraine needs far more than that – at least 7 billion dollars in annual economic aid – to stave off bankruptcy.
EU officials have also argued that the agreement would give momentum to billion-euro loan negotiations with the International Monetary Fund.
But Kiselyov dismissed this. “The IMF procedures are complicated – and Yanukovych needs money now,” he said.
Ukrainian Prime Minister Nikolai Azarov last week blamed the IMF’s tough credit conditions, which include hiking consumer gas prices, for his government’s decision to turn to Russia.
Putin said Russian banks have provided some 30 billion dollars in loans to Ukraine and would offer more in the future.
A key source for money could be the price for Russian gas, which currently stands at 410 dollars per cubic metre for Ukraine – one of the highest in Europe.
Yanukovych said Wednesday that 300 dollars per cubic metre should be the maximum price.
Kiselyov accused the EU of lacking a clear strategy versus Ukraine.
His words were echoed by liberal Russian economist Sergei Alexashenko, who argued that by its unwillingness to bail out Ukraine, the EU had surrendered it to Russia, which is not interested in creating functioning state institutions.
“It seems that European politicians are willing to sit back and watch while institutional corrosion eats away at both Russia and Ukraine,” he wrote in the Moscow Times Thursday.
Copyright Deutsche Presse-Agentur, 2013