Sunday, March 07, 2010

European Parliament Declaration on Ukraine: Has Yanukovych’s victory panicked Brussels into actually doing something?

Unpublished piece written 26th February 2010

The EU has woken up, or so it seems. It’s no secret to people here that Europe has been steadily losing influence in Ukraine over the past couple of years, and Yanukovych’s victory may in part be attributed to Ukrainians feeling they had nothing to lose by moving eastwards again. Brussels was perhaps hoping that they could rely on ‘orange’ politicians to bumble on without burning their European bridges. Well not any more, unless Yanukovych is taking a clever and calculated gamble.

The European Parliament’s 25th February resolution on Ukraine was for pro-Europeans here the most encouraging noise to come out of the EU for some time. Experts have often pointed to Article 49 of the Maastricht Treaty which seemingly enshrines the right of any European country, provided it fulfils the Union’s criteria, to apply for membership as reason to give Ukraine hope, but in practice Brussels representatives have often ducked the issue (or simply pointed out that Ukraine had not fulfilled the terms of previous EU-Ukraine agreements). The Strasbourg-based parliament is not the primary driver of EU policy, but it is far from being the easily-ignored talking shop of a few years ago. They have real power to put issues on the agenda. The process towards being granted a ‘membership perspective’ (in EU parlance, a clear signal to begin the lengthy accession process) may not be granted quickly, but the continued legitimisation of the issue builds up over time, as can be seen in the cases of the Balkans and Turkey.

Contrast this with the vague statements made in the May 2009 preamble of the Eastern Partnership, which sought even to avoid the phrase ‘European countries’ in reference to the 6 former Soviet states that sit between the EU and Russian Federation, for fear of raising membership hopes, with references to visa facilitation also watered down. Last week’s mention in the EP resolution of a ‘road map’ with the end objective of visa-free travel to the EU looks like quite a turnaround from what we’ve seen previously. Suddenly the EU has realised it will actually have to do something to keep Ukraine strung along.

As for the Copenhagen Criteria for accession, with the basic requirements that the applicant is a democracy, has a functioning market economy, respects minorities and the rule of law, Ukraine is much closer to these than it was a few years ago. NGO Freedom House now rates Ukraine as a ‘free democracy’ (in contrast to Russia which is in the third category of ‘unfree’, or current candidate Turkey which has the status of ‘partly free’) and accession to the WTO is evidence of market economy status, leaving rule of law as the most obvious Achilles’ heel.

Even if the end objective of EU membership were not actually achieved, the accession process would be far from pointless. An association agreement and deep free trade agreement would provide many of the benefits of EU membership, and we could expect at least incremental progress in the areas of economic reform, good governance and maybe even rule of law. One only has to look at the current situation in Turkey, where the military is now on the back foot as democratically-elected forces strengthen their mandate. Insiders say that even the free trade agreement currently in prospect would give Ukraine something approaching European Economic Area status, which would be hugely beneficial to Ukraine.

However, on two issues a great deal stands to be lost before we ever get to that point. Of the country’s leading politicians, only Mr. Tihipko has stated what many ordinary Ukrainians fail to understand, that Yanukovych’s stated aim of entering into the Eurasian economic space and customs union with Russia, Belarus and Kazakhstan may all but end the European dream. The EU’s economic acquis will almost certainly be incompatible with the Eurasian model (not to speak of its business practices). Most people when asked say they would like to belong to both, but this is not practically realistic. As Tihipko points out, Ukraine would potentially be giving up a great deal for very little gained. Russia’s resource-driven economic growth owes little to trade liberalization or economic integration.

If one can attribute such tactical brilliance to the man, Yanukovych may have cottoned on to the trick that Belarussian leader Aleksander Lukashenka has been using for some time, of realising that there is great play to be made from playing off the east and the west against each other for his country’s own benefit, as can be seen in energy deals struck with Russia and a degree of political thaw with the EU. The position of the 6 Eastern Partnership states has been compared with Yugoslavia under Tito, stuck on a pendulum destined to swing between east and west. Whereas five years ago it swung westwards, the Yanukovych victory only confirms a swing to the east that has been in the air for some time. But the country is likely to keep swinging back and forth unless one side or the other comes up with a trump card, and gas could be that card.

The joint ownership plans for Ukraine’s gas network should be treated with extreme wariness. Firstly, the EU as such cannot buy pipelines, so the ‘EU share’ of this part ownership plan would, we can expect, be with a private company in a member state. On the Russian side, Gazprom is the only show in town. What is more, many energy companies in Europe have or are forming closer and closer links with Gazprom. Therefore Ukraine risks being sidelined by the ‘EU’ share being put in the hands of a company that would prioritise its relations with Gazprom over the interests of Ukraine. Or worse, what is to stop Gazprom simply buying up the ‘EU’ share as well, and then where would we be? When Armenia built a pipeline south to Iran in order to diversify supply, Gazprom simply bought the pipeline. Ukraine’s gas problem is not that of losing transit provider status, but of worsening conditions for its heavy industry and its citizenry. As a report by London-based think tank The European Council on Foreign Relations said last year ‘countries can do without IKEA, but they can’t do without gas’. The EU should indeed wake up, or it could be ‘game over’ for them in Ukraine.

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