From Russia Without Love

The Ukrainian president's decision to sign the Association Agreement illustrates Russia's ongoing power in the region.

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Ukrainian President Viktor Yanukovich.
Ukrainian President Viktor Yanukovich.

In a controversial move, Ukrainian President Viktor Yanukovych decided not to sign the country’s anticipated Association Agreement with the European Union at a summit this week in Vilnius, Lithuania. This pact would have advanced a comprehensive framework for relations between the former Soviet republic and Western Europe. In the aftermath of Yanukovych’s regrettable decision, the United States and the European Union must reaffirm efforts to help Ukraine improve its governance, strengthen its economy and deepen ties with the West.

Over the long term, Ukraine would enjoy overwhelming economic and political benefits by signing the E.U. deal. As U.S. Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland told the Senate Foreign Relations Committee earlier this month, if Kiev concludes the Associate Agreement, “it will be able to export its goods” to the European Union, “the largest single market in the world, tariff-free, by early 2014.” At that same hearing, the Peterson Institute’s Anders Åslund said that the pact – which also includes a so-called Deep and Comprehensive Free Trade Agreement – could add as much as 12 percent to the country’s gross domestic product and boost its exports by 46 percent. The Association Agreement would also intensify efforts by the European Union and its member states to provide technical assistance to improve good governance and combat corruption in Ukraine.

Russia, however, has successfully used political and economic leverage to dissuade Ukraine from signing the E.U. deal. In the months prior to the Vilnius summit, Russian President Vladimir Putin engaged in a trade war with Kiev, blocking nearly all imports from Ukraine and cutting energy supplies to the country. In turn, this reduced Ukrainian exports by 25 percent and shrank the economy by 1.5 percent. As the Wall Street Journal reported, “Ukrainian officials say the Russian sanctions cost them $15 billion in lost trade and could run up to half a trillion by signing the E.U. deal.” What’s more, Åslund recently warned, “The Kremlin has publicly threatened to drive Ukraine into default,” adding: “Once again, as in January 2006 and January 2009, the notoriously unreliable Russian state-dominated gas company Gazprom may cut its supplies to Ukraine.”

Putin reportedly delivered his hard-line message to Yanukovych in a series of bilateral meetings in late October and early November. Yet despite backing away from the E.U. Association Agreement, Yanukovych has publicly kept a pro-European line, recently stating that “Ukraine has been and will continue to pursue the path to European integration.” The discrepancy between Yanukovych’s public and private posturing suggests just how powerful the Kremlin’s hold is over the country’s current leadership.

[Read Tom Squitieri on the tug of war between Russia and the West over Eastern Europe.]

Even if Russia had not dissuaded Yanukovych from signing the E.U. deal, Ukraine still had to clear a key hurdle imposed by the European Union – namely, the release of former Prime Minister Yulia Tymoshenko for medical treatment in Germany. Tymoshenko, a rival to Yanukovych, was sentenced in 2011 to seven years in prison on baseless charges of power abuse related to Ukrainian gas deals with Russia. Yanukovych has subsequently refused to pardon her. Western governments and human rights groups have widely condemned Tymoshenko’s prosecution and imprisonment as emblematic of Yanukovych’s troubling use of the country’s judicial system against his political opponents.

While Yanukovych feared that Tymoshenko’s release would hurt his chances for reelection in 2015, it appears his decision not to sign the E.U. deal has accomplished that. Kiev is now engulfed in protests reminiscent of the 2004 Orange Revolution. Nearly 60 percent of Ukrainians favor not just further integrating with but also formally joining the European Union. That is a key reason why an estimated 50,000-to-100,000 demonstrators surged into the capital last weekend. Early this week, as many as 3,000 university students walked out of class to join thousands more protestors in Kiev’s Independence Square. Opinion polls now suggest that Yanukovych could lose re-election in 2015 to his primary opposition candidates.

As Yanukovych’s popularity now plummets, there is growing concern that he could try to steal the presidential election in 2015. Indeed, Ukraine has suffered electoral controversies in recent years. In a January 2013 report, the Organization for Security and Co-operation in Europe criticized Ukraine’s October 2012 parliamentary elections as being “characterized by the lack of a level playing field.”

Here, the United States can – and should – work more closely with the European Union to signal the importance of free and fair elections to Yanukovych. David Kramer of Freedom House has urged that “Yanukovych needs to be put on notice now that the lead-up to and conduct of the 2015 election will determine Ukraine’s future with the West.” Moreover, Washington should find new ways to help Kiev achieve greater freedom of action and independence vis-à-vis Moscow. For example, the United States should use foreign assistance and economic diplomacy to help Ukraine improve its energy security, thereby decreasing both its dependence on Russian energy exports and, importantly, the Kremlin’s clout. Cooperation like this can help Kiev create the geopolitical space from Russia that it needs to move forward with the E.U. Association Agreement and other European integration efforts.

Ukraine’s decision to indefinitely postpone the E.U. deal will likely have negative consequences – not only for the country’s economy and political standing, but also for Yanukovych’s electoral prospects. As Ukraine faces growing economic difficulties, the Ukrainian people appear eager both to deepen trade and political ties with Europe, and to decrease Russia’s undue influence on their domestic politics. With diplomacy, foreign assistance, and persistence coupled with patience, the United States and the European Union can help the Ukrainian people achieve their aspirations.

Denise Forsthuber is a research intern at the Foreign Policy Initiative in Washington, D.C.

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