President Victor Yanukovych of Ukraine has caused shock and embarrassment in Brussels by shunning the EU’s association agreement and instead choosing to pursue a middle-way relationship placing Kyiv at the heart of two blocks: Russia in the East and the EU in the West. This was exactly the course argued for on these pages on 10 September.
Firstly, Yanukovich has only placed negotiations on hold, and can resurrect them. His message is clear: Ukraine is a prize; it does not need to beg from Brussels. He is aware that capitals of the EU have been eyeing the Ukrainian market jealously. Entry to Ukraine would be a great boost for European employment and business in a time of great crisis, boosting unpopular governments at home while exporting difficulties and unemployment to Ukraine.
Many Ukrainian firms are unprepared to compete directly with the EU, and accession could lead to increased unemployment in Ukraine as businesses collapse. Brussels has been unwilling to guarantee it will deal with these consequences.
Secondly, Ukraine is taking seriously the ethnic, cultural and historical ties it has with Russia. History does not simply disappear; it provides meaning and a shared identity, two critical concepts the EU deeply lacks, despite its attempts to fabricate them. The cultural gap between Brussels and Kyiv should not be overlooked: Brussels is built on the wisdom of mortal humans against the natural order, while the East maintains a close relationship with the church, tradition and past. Brussels is the culmination of leftist dreams: a new state and a people rejecting their national identities for a higher goal; whereas Ukraine and the East still identify with community and belonging, concepts that aid mental health, define peoples and bring solidarity.
Thirdly, Ukraine has recognised that its economic security is tied to Russia (physically, infrastructure and energy leads to and comes from Russia) as much as to the EU, and that its military security is as much served by being friendly with the country that is producing a fifth-generation fighter plane as working with the EU, which recently produced a great plane for the 1980s.
Fourthly, Yanukovych is still sending the right messages: he has stated that he wants to continue along the “European path” whilst at the same time repositioning Ukraine as the new crossroads between East and West. He stated “I would like to underline this: there is no alternative to the creation of a society of European standards in Ukraine and my policies on this path always have been, and will continue to be, consistent.” This will help soothe investor sentiments, and minimise the impact of his actions on jittery capital markets. A middle-way can benefit everyone.
The EU’s loss is great. Geopolitically, Ukraine remains de facto in Moscow’s sphere of influence. Russia has succeeded in demarcating its rival system against the West. Multipolarity and competition, so good for the world, is on the up.
Yanukovych is also dealing with a deeper problem: Ukraine is not stable, divided between a Russian ‘East’ and an add-on Western-oriented ‘West’. 54% of Ukrainians supported the EU deal, 46% did not. In such a context, a leader seeking to establish unity and hold the state together does not need to make divisive decisions. Yanukovych’s choice of wording was telling: “I want peace and calm in our big Ukrainian family” – he is emphasising unity and nationhood in his choice of the third, gateway relationship between Russia and the EU.
Choosing Russia is also a victory for hard-power. While the EU champions soft-power (lacking any alternative), in the real world it is hard-power that matters. While America, China, and countries like Russia freely abuse ‘rights’, Brussels waxes lyrical and is ignored. The application of sharp economic pressure from Moscow delivered results and progress.
Europe has also lost in Ukraine a market of 45 million people. European business needed a new market in which it could invest, in so doing opening the way for capital to flow and investment to increase. This would have helped European banks out of the problems inherent in fractional reserve banking and out of the financial crisis that has cut off the essential continual investment that is needed to stop systemic failure. And the markets would have jumped had Ukraine signed up, providing a political boost to the beleaguered European project.
Lastly, the EU’s prestige and pride has been wounded. The debt problems and lack of resources in Europe are beginning to speak to the world, and contrast greatly with the abundance of Russia. Predictably, the Europhiles have been quick to blame Moscow. EU Enlargement Commissioner, Stefan Fuele, along with Commission President Barroso and Council President Van Rompuy, all said pressure from Russia was clearly to blame, and the ‘Modern Ukraine’ campaign in Brussels published reams of stories about murky threats from Moscow. High Representative for Foreign Affairs Catherine Ashton said the decision was a "disappointment", stating that signing the EU deal would have been a sign to world markets that Ukraine was ready for business and investment. Yet Ukraine is ready: only the rules to and risks of investing are not in the Western model.
EU to blame
Brussels should look closer to home when placing blame. The size of Ukraine was something Paris and Berlin feared. Ukraine joining the EU would represent a seismic shift and see power shift east, away from these two core EU states. Ukrainians themselves also felt disappointed with the lack of excitement or interest in Ukraine’s future, and looked nervously at the chaos within Europe over the Greek and Mediterranean debt problem.
The EU also failed to listen to Ukraine’s plea for help if it did choose Europe: there was no appetite in Brussels to spend billions on supporting Ukraine during the economic difficulties that would come from Russian sanctions and increased competition.
Kyiv also baulked at the list of rules and regulations Brussels demanded Ukraine submit to. For a state that so recently became free from oppression, submitting to new masters in Belgium, France and Germany was hardly appealing. Ukrainian Prime Minister Azarov was reported to have said EU demands to increase gas prices to Ukraine’s people were “the last straw” and compounded Ukraine’s disillusionment.
Meaning for Britain
Should Kyiv become a gateway between Russia and the EU, the shockwaves will reverberate across Europe to Westminster. If Kyiv can negotiate with the EU, and open a third way relationship, one in which it can gain access to European markets while also retaining its ties with Russia, then the already feeble arguments of those who say Britain can’t negotiate will be truly sunk. If Norway can, if Switzerland can, and if Ukraine can, then Britain, on which Europe depends for its military clout, most definitely can.