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12.11.2013. Europe, Russia and the Battle for Ukraine

The Russian idea of a Union of Europe, from Brest in France to Vladivostok on Russia’s Pacific coast, is in the interests of all sides.

As I write this article, it is still unclear if the Ukrainian authorities will pardon Yulia Tymoshenko in order to clear the path to signing the Association Agreement with the EU, which includes the Deep and Comprehensive Free Trade Area, at the EU Eastern Partnerships Summit in Vilnius, Lithuania in late November. Any number of things could prompt Ukraine to walk away from the agreement – a combination of Russian threats and promises, the belief that association with the EU will not benefit Ukraine even in the medium term, or fear of Tymoshenko, the country’s most high-profile and strong-willed politician. I believe that the situation will not change radically either way, primarily because of the state of Ukraine and its elite.

Before offering my conclusions, I’d like to discuss the interests of the different players in this strange, if not farcical, conflict.

I won’t spend time exposing the obviously unrealistic and economically meaningless EU promise to open up its markets to Ukrainian goods, as the doors opened long ago. Nor do I think that the EU hopes to expand its market through association with Ukraine given the widespread poverty in the country. And lastly, there will be no new investments, as even old investments are fleeing the country.

Europe’s interests

I am sure that Brussels’ interest is purely political and psychological. The EU’s international influence has been damaged by the crisis and the mistakes of the 1990s, when Brussels set the unrealistic goal of creating a common foreign and defense policy. All this was to undermine the impact of great powers, while preventing the EU from expanding its international clout. EU foreign policy rapidly deteriorated into empty statements and a silent, losing war with Russia for influence in the former Soviet republics. Russia responded forcefully to the challenge.

Victory in that zero-sum game went to Belarusian President Alexander Lukashenko, who strengthened his position through a series of shrewd moves. The clear loser has been Moldova, which remains poor and unable to right the ship, despite the Russian-offered variants for its reunification with Transnistria. The EU-Central Asia strategy for a new partnership has not materialized. The Eastern Partnership program, launched years ago for post-Soviet republics to the west and south of Russia, is floundering. In this situation association with Ukraine could stop the EU’s drift towards becoming a foreign policy non-entity.

As I see it, the Association Agreement with Ukraine is probably meant to protest against Russia’s open disregard for “European values,” which many consider the epitome of the European character. Europe feels that Russia’s socioeconomic progress has slowed and its strength will eventually wane. And it certainly believes that the discovery of shale gas and greater energy efficiency are decreasing Russia’ value as a partner that can be pressured if and when necessary.

The driving force behind the Association Agreement farce is Poland, which is trying to bolster its largely justified claim to an equal role in the EU alongside other leading powers. Poland wants its own periphery, like Germany, which became the dominant European power after the EU granted membership to central and eastern European countries that historically gravitated towards Germany. Sadly, many Poles, including politicians, believe that Ukraine’s accession to the European (read: Polish) periphery would revive the mythical time in the Late Middle Ages when Polish kings allegedly controlled a vast swathe of Europe, from the Black Sea and the Mediterranean to the Baltic Sea.

Washington has traditionally headed the advice of Zbigniew Brzezinski, the legendary geopolitical strategist and ethnic Pole who said that “without Ukraine, Russia ceases to be an empire, but with Ukraine, Russia automatically becomes an empire.” But now the United States is standing on the sidelines, because it has other, more pressing problems. Washington has lost interest in “murky” European affairs because the center of global power is shifting to the Pacific region, and because it is still nursing disappointment from its failure to win over Ukraine. After the Orange Revolution, which the United States strongly supported, Ukraine quickly turned into a weak client that kept pressing Washington for money and was unable to play the role of an outpost to ward off Russia’s influence. Moreover, the previous US administration failed to bring Ukraine into NATO, a defeat compounded by Russia’s crushing military defeat of another aspiring NATO member, Georgia, in August 2008.

Ukraine’s interests

The interests of the Ukrainian elites seem obvious, at least to me. They have failed to put the country on the path to meaningful, independent development. They lean towards Russia when there is hope of siphoning off “gas money” or, more recently, of receiving Russian subsidies and/or loans. Their current pro-European leanings are rooted in a desire to secure a new loan (that will never be paid back) from the IMF and other international creditors to postpone Ukraine’s impending default.

Ukrainian elites don’t care about their people, who have become much poorer in recent years. Right before the Soviet Union’s collapse, Ukraine’s GDP per capita was larger than Russia’s and twice as large as Belarus’. Now it is one-third of Russia’s and half of Belarus’. Such a big step backward is surprising given the country’s rich farmland and highly developed industries, including export-oriented ones, which it inhered from the Soviet era. But the elites let most of it go to waste.

I can understand the desire of many Ukrainians – and possible a majority – to join the EU rather than Russia. They want to live like Europeans, not like Russians.

But friendship is one thing and business another. The EU will not and cannot help Ukraine. Worse still, the Association Agreement, if Ukraine signs it, will only worsen Ukrainians’ plight, because Moscow, being largest Ukrainian trade partner, will be forced to impose tougher trade terms on Ukraine, if only to save face. Nor will Ukraine receive the discount on gas prices that it has been campaigning for over the past 20 years.

Russia’s interests

As for Russia, it would like Ukraine to join the Customs Union and the Eurasian Union to fill out its own economic and political association. This would increase Russia’s competitiveness. Some in Russia still feel a degree of nostalgia for the imperial past, but this group is getting smaller. I’m sure that Moscow, which likes to play geopolitical games, doesn’t want the EU to celebrate even a temporary, illusory victory. And it doesn’t want Ukraine to latch on to the West. But this seems like an unfounded fear, as Ukraine will never submit to foreign control. What’s more, no foreign power will want the job considering the cash injections that would be required. 

This poses a serious dilemma for Russia. If Ukraine joins the Customs Union or EurAsEC in its current deplorable economic state, this would likely destroy them. We could offer Ukraine money to join these unions, but this would be futile because Ukraine would surely squander it and then lean back towards Europe. Or we could pressure the already weak Ukrainian economy in the hope that our neighbors will either come to their senses or fall apart. I’d like to remind those favoring the second scenario – I can safely assume they exist – that this would be a highly risky and most likely unrealistic undertaking. Ukraine wants to remain united and sovereign.

So, the situation is hopeless given the current parameters of a potential solution. Russia and Europe are playing a zero-sum game with Ukraine, which can only benefit the corrupt Ukrainian elites. But even their potential gains are rapidly diminishing. The Ukrainian people are definitely on the losing end, and the longer this lasts, the more they will lose.

If Kiev gets what it wants from Russia in return for rejecting the Association Agreement, two or three years later they will again raise the issue of Ukraine’s “European choice” in an attempt to milk their other cow. They may even try to play the NATO card to postpone their demise. But if they sign the agreement and Russia acts on its word, Ukraine would eventually attempt to siphon off gas and Russia would have to halt gas supplies, provoking a new crisis in relations with Europe. And then Ukraine, hoping for Russian subsidies, would again revive the idea of “Slavic unity.” And on and on.

Solutions

There are three interconnected solutions to this problem.

If it wants to pull other countries into its orbit, Russia must break out of its current stagnation and pursue qualitative development. This is a fail-safe scenario that will benefit Russia. However, it cannot guarantee that Ukraine will change its posture.

The second option is to keep waiting, trying to contain the damage from the smoldering Ukrainian crisis in the hope that Ukraine, unable to resist pressure from the west and south (Turkey), will again seek Moscow’s help, like it did under the Treaty of Pereyaslav. But this is unlikely.

And lastly, Moscow and Brussels might come to their senses, stop playing a zero-sum game with Ukraine, and instead work together to put the country on the path to effective development.

This was attempted over 10 years ago, when Moscow and Berlin proposed putting the Ukrainian gas transit system under the joint control of the EU, Russia and Ukraine. Kiev rejected the proposal because in this case it would have been unable to siphon off Russian gas and to play Russia and the EU off each other. Many central European countries with lingering anti-Russian sentiment also refused to back the proposal.

Hopefully, the time for such ideas will come, because EurAsEC is supposed to be based on European law, and the proposed Union of Europe – a common economic, energy and human space from Brest in France to Vladivostok, which can also include such nonaligned countries as Turkey and Ukraine – objectively meets the interests of all sides.

It could become the third pillar (in addition to China and the United States) of a new world order, strengthening all European countries and international stability. Europe briefly considered and rejected the idea, preferring to settle into its rut or to hope for a new union with its American savior. But Washington clearly wants none of this.

The third option can only succeed if Russia continues to make progress. Only in this case will it be profitable and prestigious to count Russia as a friend – even a friend with a different set of political and gender values.

Sergei Karaganov is Deputy Director of the Institute of Europe at the Russian Academy of Sciences, Dean of the Department ofWorld Economy and World Politics at the State University – Higher School of Economics, Honorary Chairman of the Presidium of the Council for Foreign and Defense Policy, member of the Valdai Discussion Club.

//This article was originally published in Russian in Vedomosti newspaper.