Ukraine’s Iron Curtain call

A last-second pullout from a historic EU partnership shows Russia is back in control of the former Soviet republics

by Katie Engelhart

Zurab Dzhavakhadze/Zuma Press/Keystone Press

Thousands of demonstrators continue to gather in Independence Square in Kiev, the capital of Ukraine, to voice their displeasure over President Viktor Yanukovych. Meanwhile, some 1,500 protestors in the western city of Ivano-Frankivsk  seized a government building. Similar protests are taking place in other western cities in the country.

Maclean’s contributor Katie Engelhart wrote about the growing political unrest in the country. This article was first published in December 2013.

In 2005, in a live television broadcast, Russian President Vladimir Putin described the collapse of the Soviet Union as “the greatest geopolitical catastrophe of the century.” Russia, Putin continued, is still “connected” with its former Soviet republics: through language, “a great culture,” “a single historical destiny.” For eight years, Putin has been working to strengthen those connections—often, by supplementing “culture” and “destiny” with bribe and brawn. Now, it’s all come to a head in Ukraine, where more than 100,000 demonstrators have taken to the street to condemn their president for buckling under Moscow’s pressure.

It was in late November that Ukraine, after years of negotiating, abandoned a historic co-operation deal with the European Union aimed at bringing the country into Europe’s free-market embrace. The deal would have been the centrepiece of the EU’s Eastern Partnership Summit in Vilnius, Lithuania, which was meant to strengthen ties between the Union and its eastern neighbours. But days before the meeting, Ukraine unexpectedly jumped ship, citing a need to “normalize relations with Russia.” In response, mass protests erupted in Kyiv in the largest show of public might since Ukraine’s 2004 Orange Revolution. By Monday, police had relinquished control of city hall and Kyiv’s central plaza to thousands of chanting demonstrators, and Ukraine’s president appeared ready to declare a state of emergency.

Ukraine is not alone. In September, Armenia also backed out of EU talks—choosing to align with Russia and its plan to build a rival Eurasian Union by 2015. On the continent, these moves have inspired fear of a new Iron Curtain-esque struggle for Eastern Europe and the Southern Caucasus: those countries caught between East and West. Already, Kazakhstan and Belarus have joined Russia in a customs union. Armenia and Kyrgyzstan will likely follow soon. Speaking to the German parliament last month, Chancellor Angela Merkel turned her attention to these manoeuvres. “The Cold War,” she bristled, “should be over for everyone.”

Kateryna Kruk was 13 years old during the 2004 Orange Revolution, in which Ukrainians banded together to reject a rigged national election. “I skipped my classes and snuck through the back door of my school to join the revolution,” Kruk told Maclean’s. Eight years later, Kruk has been slipping out of her office in Kyiv to protest during lunch breaks. “We sing songs. There are free sandwiches and tea. We dance, so we won’t freeze.”

It started on Nov. 14, when Ukraine’s parliament postponed consideration of a bill to free former prime minister and opposition champion Yulia Tymoshenko from jail—where many believe she is being unjustly held. European negotiators had made Tymoshenko’s release a condition for a EU-Ukraine trade deal. A week later, the government formally suspended trade talks with Brussels.

Ukrainians, who largely support European integration, flocked to Kyiv’s central square. By Sunday, tens of thousands of protesters had gathered. Some waved EU flags and played the European anthem. Others were met with tear gas and a police cordon. The protests spread to Lviv, in the west, and even some cities in the Russian-speaking east.

That this scene looks familiar has escaped no one’s notice. Ukraine’s Orange Revolution began in 2004, after Viktor Yanukovych won what was largely seen as a fraudulent national election. A mass uprising swept him from office—but soon fell to internecine wrangling. The “orange alliance” disintegrated and, by 2006, Yanukovych was back in office. Today, he is president—and his rival, Tymoshenko, has been jailed in what many see as an act of political retribution. “A year and a half after the revolution, people were embarrassed to talk about the revolution,” says Kyiv’s Kruk. The déjà vu weighs heavily.

The EU’s Eastern Partnership was meant to turn Ukraine around. The project was launched in 2009 when—after a big eastward expansion—the EU found itself bordering the former Soviet Union. The partnership was designed to strengthen ties between Brussels and six ex-Soviet countries: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. Brussels would provide “deep and comprehensive free trade agreements”—and, in return, the partners would undertake democratic reforms. Well-behaved partners, it was assumed, would be put on the EU accession track and be eligible for subsidies and European Investment Bank loans. The EU would benefit, too, from regional stability and access to oil and gas. EU diplomats liked to call it a “win-win.”

From 2010 to 2013, Brussels spent $3.6 billion on the project. And though progress was essentially nil in some countries, such as Belarus and Azerbaijan, others showed substantial democratic gains.

November’s summit in Vilnius was meant to be a showcase of the EU’s success. But after Armenia and Ukraine backed out of negotiations, it proved a subdued affair. The summit’s highlight: Georgia and Moldova’s initialling (they are not yet at “signing” stage) of EU association agreements.

All along, Russia had other plans. “[A] Eurasian Union is one of Putin’s main objectives,” explains Viorel Ursu, a senior policy analyst at the Open Society Foundation. In 2010, Russia, Kazakhstan and Belarus formalized a customs union and began recruiting members. “But Putin wants more than an economic union,” says Ursu. “He wants a supra-state structure, modelled, more or less, on the European Union.” A recent U.K. government report describes the effort as Russia’s “battle to retain influence [in] its sphere of influence.” Critics accuse Putin of engineering a union that would strip smaller members of their sovereignty. He counters that “there is no talk of re-forming the U.S.S.R.”

All the while, Kyiv has flitted back and forth between East and West. This partly reflects geography: Ukraine’s industrial east is largely Russian-speaking; its west is Ukrainian-speaking. But it’s also a hedging strategy. In 2012, Ukraine exported nearly equal amounts to Russia and the EU (26 per cent and 25 per cent of total exports, respectively, according to the World Bank).

It was always going to be a rocky path with Kyiv. Yanukovych has long complained that the EU’s reform requirements are too demanding. And, ever since he tried to rig the presidential elections in 2004, he has been unpopular with Western leaders. But still, Yanukovych seemed ready to throw his lot in with Brussels—until early November, when he flew to a military airport near Moscow for a clandestine meeting with Putin. Shortly after that meeting, Yanukovych reversed course.

He showed up in Vilnius for the summit meeting, as planned. A popular YouTube video shows him being approached by Merkel, at what appears to be a drinks reception. Clasping a glass of champagne, Merkel looks Yanukovych squarely in the eye: “We expected more from you,” she says.

Ukraine has an interest in not angering Moscow. It is deeply dependent on Russian natural gas, and deeply in debt to Moscow, to the tune of $1.87 billion. It’s likely that Putin has offered Yanukovych a steady gas supply and better terms of loan repayment in exchange for Kyiv’s eventual support of the Eurasian Union. EU officials have been criticized for failing to assuage Ukraine’s fear of Russian reprisal.

Russia has already started applying economic pressure. In July, it banned all chocolate, cake, cookie and candy imports from Ukraine—ostensibly, because of health concerns. Other Ukrainian goods have since been subjected to lengthy customs checks. Overall trade between the two countries has fallen by 25 per cent over the last year, according to Ukraine’s energy minister. Moscow has taken similar aim at potash from Belarus, wine from Moldova and milk products from Lithuania. Crates of Lithuanian yogourt and kefir have piled up at customs checkpoints—and observers, in a nod to Churchill, speak of a “Milk Curtain” having descended across the continent. To many, these are not-so-nuanced Russian warnings against EU co-operation.

In Kyiv, Ukrainians are already starting to talk about the next presidential elections, in 2015. And Moscow’s critics are looking anxiously to Moldova, another country that is vulnerable to Soviet advances. In September, Russian Deputy Prime Minister Dmitry Rogozin threatened to cut off Moldova’s gas supply this winter, if it seeks trade agreements with the EU: “We hope that you will not freeze.”




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Ukraine’s Iron Curtain call

  1. Invite the Russians to join the EU….it’s what’s going to happen eventually anyway, so they might as well begin now.

    • Russia has plans on forming a Eurasian union of previous Soviet Republics, and strongly dislikes the entire concept of “Europe”. Even if asked, they would never want to join.

      • Sorry….not true. You could look this stuff up you know.

        • Source: lived in Vladivostok and Volgograd for numerous years. The nearly overwhelming belief there is that Europe is a menace and most Russians want nothing to do with it.

          True.

          Go to Russia and you’ll discover that the vast majority see Europe as an enemy, this trickles down from the Duma, as well as the Russian Orthodox church. You will never see Russia or Belarus raise or even consider an invite from the EU within your lifetime.

        • Russia to join EU? And Putin to be just an ordinary head of just another member country, and not Vladimir Almighty? This simply can’t happen. You better read something about Muscovy state and its history. It is very simple and mostly the same.

          • Like I said…..if I had a nickel…..

          • The same thing all the time – he is Tsar and he is the coolest kid on the block.

  2. This article is poor. In an effort to achieve simplicity, this author has misconstrued a number of elements of the situation.

  3. Air needs to be cleared. What are the objective reasons why the Kremlin views Brussels with a jaundiced eye? For we can, and need to, dispense with the axe-grinding.

    Is Brussels capable of change? Well, listening to the euroskeptics, the chances are slim, and the cause for the UK to leave the EU can be summed up this way: It is like a high trade tariff for the UK to stay in the EU.

    Therefore, I am looking to Ottawa, Canberra, Singapore, Wellington & London to have a plan that provides a better alternative to what the Kremlin, and Brussels, can deliver.

  4. Portraying Russia as an oppressor and Ukraine as a victim is a simplification bordering on disinformation. Ukraine is very divided. Industrial Russian-speaking east and south are pro-Russian, agricultural west is pro-EU. The center is, well, at the center.

    Fact is, EU did not offer Ukraine any good incentives.The proposed agreement requires Ukraine to limit its exports to EU, but to fully open its market to EU imports. It allows EU businesses to freely operate in Ukraine, but it does not allow Ukrainian producers to open businesses in EU. It allows EU citizens a free entry in Ukraine, but visas Ukrainians visiting EU remain in place. The agreement is highly declarative and very inconcrete on the part of EU, but is very specific when it comes to Ukraine’s obligations. For example it curtails Ukrainian grain exports to EU to 1 million tonnes (from current 3 million tons).

    So Ukraine government was absolutely correct to reject such an agreement and those protesting are a small vocal minority that does not understand what’s good for them, really. Vast silent majority agrees with the government and disapproves the protests. Yanukovych should have looked at Merkel and replied “we also expected more from you”.

    There is another part of the story, which aggravates the situation even further. If Ukraine signs the agreement and allows free import of EU goods, then Russia, which currently allows free import on Ukrainian goods, will annul its agreement with Ukraine. Currently Russia is a biggest importer of Ukrainian goods. Who will buy them then? Ukrainian economy, which is not in a good state already, will suffer a terrible blow, possibly a fatal one.

    EU could have sweeten the pill by at least offering a decent credit line, but all they offered was 100 million euro. This is a joke. Ukraine needs several billions only for starters, and more than a hundred of billions on the long run.

    Instead it was Russia who gave 15 billion in bonds, plus 4.5 billion per year in reduced gas prices. This is what I call walking the talk. EU with its offer of 100 million (~0.5% of Russia’s aid) and the long list of demands should be ashamed.

    Lastly, regarding a vocal minority of pro-EU demonstrators – now they will go back to their recipient provinces in Western Ukraine and collect delayed government salaries, pensions and welfare checks, which will be paid with Russian money. Not that it will stop them from protesting against big bad and evil Russia, I am sure.

  5. There are no free markets in the United States and Europe when central banks are buying trillions of dollars of financial assets with trillions of various currency units conjured up out of thin air.

    The United States and Europe are in the midst of the greatest bailout program ever for the 1% and the banksters.

    It is ludicrous to call Western markets free with all the LIiBOR fixing, and central bank price fixing of interest rates, long and short.

    The yield curve is now a centrally planned fantasy.

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