News / Europe

    Ukraine Drops Plan to Go West, Turns East

    Ukrainian and EU flags are seen before a session of parliament in Kyiv Nov. 21, 2013.
    Ukrainian and EU flags are seen before a session of parliament in Kyiv Nov. 21, 2013.
    Reuters
    Ukraine abruptly abandoned a historic new alliance with its western neighbors on Thursday, halting plans for an imminent trade pact with the European Union and saying it would instead revive talks with Russia.
     
    EU officials, who had been preparing to sign the long-negotiated deal at the end of next week, said President Viktor Yanukovych cited fears of losing massive trade with Russia when he told an EU envoy this week that he could not agree to the terms.
     
    Yanukovych's prime minister, Mykola Azarov, issued the dramatic order to suspend the process in the interests of “national security” and renew “active dialog” with Moscow. EU officials, who had hoped the president's complaints in recent days were a last-minute bargaining tactic, saw little chance of saving the deal.

    Russia welcomes move

    Russia, sensing betrayal in the westward pivot of its most populous former Soviet satellite, had threatened retaliation, raising fears it could cut energy supplies in new “gas wars.” The Kremlin welcomed the news of Ukraine's change of heart.
     
    EU pressure for Yanukovych to release a jailed opponent whom he sees as a threat to his re-election in 2015 also dogged months of shuttle diplomacy with Ukraine, a country in which Russians see the historic origins of their nation and where many of the 46 million people are native Russian speakers.
     
    Ukraine's parliament, dominated by Yanukovych's allies, rejected a series of bills earlier on Thursday that would have satisfied the EU by letting opposition leader Yulia Tymoshenko out of prison to travel to Germany for medical treatment.
     
    Shortly afterwards Prime Minister Azarov issued the order on suspending the EU process and reviving talks with Russia, other members of a Moscow-led customs union and the former Soviet Commonwealth of Independent States.
     
    A spokesman for Russian President Vladimir Putin said: “We welcome the desire to improve and develop trade and economic cooperation.” Ukraine was a “close partner,” he added.
     
    European governments, especially those dominated by Moscow during the Cold War, have been keen to anchor Ukraine's bulk and population closer to the West, though others have doubted whether corruption and oppression make it a viable partner.
     
    ‘Brutal pressure’
     
    Germany's foreign minister, Guido Westerwelle, said the European Union was keen still to improve ties with Ukraine but that it was up to Kyiv to decide. Swedish Foreign Minister Carl Bildt, a veteran of east-west diplomacy on the continent, was blunter.
     
    “Ukraine government suddenly bows deeply to the Kremlin,” he tweeted. “Politics of brutal pressure evidently works.”
     
    He added that Ukraine's economy would decline and that the rupture would “kill” Kyiv's prospects for foreign investment.
     
    EU officials told Reuters that when Yanukovych met the EU commissioner in charge of relations with Kyiv, Stefan Fuele, on Tuesday, he had said he could not agree to the deal. It would, he said, cost Kyiv $500 billion in trade with Russia over the coming years, while implementing demands for Ukraine to adopt EU legal and other standards would cost another $104 billion.

    Deal dead

    Some EU diplomats had viewed that stance as brinkmanship, an effort to secure better terms. But on Thursday, after the government order, EU envoy Aleksander Kwasniewski was quoted as telling a Polish news agency that next week's deal was dead.
     
    “The agreement will not be signed in Vilnius,” the former Polish president told TVN24.
     
    “Our mission is ending. It is a pity that it is ending without a finish like the signing of the agreement,” he said.
     
    Ukrainian opposition leader Arseny Yatsenyuk, an ally of Tymoshenko, said that if Yanukovych failed to sign it would be “treason” and provide grounds for the president's impeachment.
     
    The 28-member EU had insisted Kyiv carry out democratic reforms including ending “selective justice” - the EU sees Tymoshenko as a political prisoner, irking Yanukovych who narrowly defeated her in the 2010 presidential election.
     
    Nonetheless, he had been scheduled to sign the far-reaching free trade and cooperation agreement with the EU at a summit in the Lithuanian capital Vilnius next Friday, November 29.
     
    German Foreign Minister Westerwelle spoke of wishing that Ukraine would share the EU's values and choose a “European path of development” but made clear that was up to Kyiv.
     
    “Our interest in good relations with Ukraine is unbroken and our offer of a real partnership still stands,” he said in a statement. “The ball is in Kyiv's court. It is their sovereign right to decide on their path freely.”

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    Comment Sorting
    Comments
         
    by: Warren from: US
    November 22, 2013 1:12 PM
    The EU needs to be patient and farsighted. A relationship based on coercion cannot last. And as Russia continues to de-industrialize, it will be ever more dependent on the imports of industrial goods.

    In time, if the EU plays its cards right, Ukraine will export an increasing share of its industrial production west, reducing its dependence on earnings from Russia. At the same time, Russia is bound to become increasingly more dependent on imports, as its own corrupt, inefficient industry continues to disintegrate. Eventually, the tables will shift in Ukraine's favor, and turning its back on Russia will be not only desirable, but also possible.

    Probably the only trump card Russia will retain is its energy supply to Ukraine, but even there the Ukrainians have options. The fact that Moscow now charges them near-world market prices means it's no longer a subsidy issue - just security of supply. And were the country to finally liberalize its oil & gas sector, it would not take long for companies from the world over to move in and begin developing the country's vast endowments of hydrocarbons. Never mind shale gas, which Ukraine is expected to have plenty of - the country has significant deposits of coal bed methane, which for all purposes is now a conventional resource, and has great potential for both conventional oil and gas in its offshore.

    So, Kiev does not need to resign itself to this fate for ever. With prudent policies, and an open door policy from the EU, the country should be able to extract itself from the serf-like relationship it now endures with Russia. The fact that Putin had to essentially pull all the levers to bring Kiev to heel shows that the Russians know it's just a matter of time before Ukraine is truly free, and want to extract the maximum gains before latching on to another victim.

    by: Dr Damekovych from: Ukraine
    November 21, 2013 5:01 PM
    don't be fooled by this cowardly act... Russia is disintegrating and it would be happy to take Ukraine with it. Ukraine just consigned its future to another 60 years of corruption and misery. the real question in this drama is - where the hell is America??? hey Obama, are you awake...??? do you see what are the implications here...???

    by: David
    November 21, 2013 3:52 PM
    Russia wants to reform the Soviet Union and are using its resources as a negotiating club. Ukraine chose resources over the educational wealth of the EU.

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