Bloomberg News

Europe’s Homeless States Risk EU Rebuff as Putin Digs In (1)

March 07, 2014

Prime Minister Arseniy Yatsenyuk and Chancellor Angela Merkel

Ukrainian Prime Minister Arseniy Yatsenyuk, left, stands with German Chancellor Angela Merkel yesterday in Brussels. Photographer: Alain Jocard/AFP via Getty Images

Arseniy Yatsenyuk looked at home with Angela Merkel yesterday as she chaperoned him around an emergency European Union summit. Yet the new Ukraine premier’s chances of getting a permanent seat in the Brussels club are becoming more remote as Russia tightens its grip on his country.

While EU leaders promise sanctions and travel bans for Vladimir Putin’s officials, Russia’s president is establishing facts on the ground every day. Yesterday, Crimea’s parliament, seized at gunpoint by pro-Russian forces last week, announced plans to hold a referendum on March 16 on seceding from Ukraine.

The risk for Yatsenyuk and millions of other Putin opponents in the buffer zone between the EU and Russia is that European leaders will balk at the commitment needed to give them what they really want: full EU membership. To the EU’s critics, the bloc’s leaders are failing to recognize a turning point comparable to the fall of the Berlin Wall.

“Putin’s not too afraid of what the EU’s going to do -- Russia holds all the cards and is there to stay in Crimea,” Spyros Economides, senior lecturer in international relations at the London School of Economics, said in a phone interview. “I can’t see how the 28 EU members could agree a clear path for Ukraine to join the EU in the next years.”

From Kiev to Tbilisi, the EU has become a beacon for those who want to throw off Russian domination. While the euro crisis exposed the EU’s faults, membership has also fueled growth and a measure of prosperity in those former Soviet-bloc countries that joined in 2004.

GDP Growth

Ukrainian and Polish income per capita both started at just under $2,000 in 1991, according to World Bank data. Poland, which joined NATO in 1999 and the EU in 2004, is now just under $13,000. Ukraine, which isn’t a member of either club, is just below $4,000.

The question for European leaders is how much political and economic capital they are willing to spend on making a clear commitment to Ukraine, Georgia and Moldova, whose economies aren’t close to matching the standards needed of EU members.

The most strategically important is Ukraine, with 45 million people and pipelines funneling Russian gas to western Europe. It’s also the most pressing case, after Pro-Kremlin President Viktor Yanukovych fled last month following three months of anti-government protests.

Presidential Luxury

Pictures of Yanukovuch’s presidential retreat with its fleet of luxury cars and a pleasure galleon, hinted at Ukraine’s status as one of the world’s most corrupt countries, ranking 144 out of 175 in Transparency International’s Corruption Perceptions Index for 2013. And bringing it into the EU would risk alienating about 11 million Russian speakers, some of whom look to Moscow rather than Brussels for their political guidance.

“EU membership is totally unrealistic for a country like Ukraine that’s still so corrupt and post-Soviet,” Barbara von Ow-Freytag, who advised the German government from 2008 to 2013 on Russian issues, said in a phone interview.

Belarus, which sits to the north of Ukraine between Poland and Russia, has been labeled a dictatorship by the U.S. and blackballed by the EU. Moldova, to the southwest of Ukraine, is Europe’s poorest state, and to the east on the other side of the Black Sea, Georgia’s territory is partly under Russian military occupation, unaltered by EU and U.S. protests since Putin invaded in 2008.

Russia’s Orbit

While European institutions have expanded East before -- waves of former Soviet satellites joined NATO from 1999 and the EU from 2004 -- the danger for those left out in the cold is that Putin may have more at stake in keeping them in Russia’s orbit.

“Russia’s strategy is to create problems on the ground in its neighbors,” Joerg Forbrig, a senior program officer at the Berlin bureau of the German Marshall Fund of the U.S., said in a phone interview.

Putin’s driving political force is to rebuild the prestige lost by Russia during the collapse of the Soviet Union. He also needs Ukraine to fulfill his dream of creating a Eurasian Economic Union, a free-trade area sprawling across nine time zones from Kaliningrad on the Baltic to Kamchatka on the Pacific that he wants to rival the EU.

‘Shell-Shocked’

“Putin was shell-shocked when he realized he had no influence in Ukraine after Yanukovych fled,” said Jan Techau, head of the Brussels office of the Carnegie Endowment and a former research adviser at the NATO Defense College in Rome. “That’s why he grabbed Crimea. A successful Ukraine would be a terrible example aimed at Putinism. What happened in Kiev could happen in Moscow.”

Putin is using armed force to harass any government tempted to look west. Russian or Russian-backed forces have now infiltrated territory in four of the six nations in the EU’s Eastern Partnership, set up to deepen ties between Brussels and the post-Soviet region.

The Kremlin has troops based in Moldova’s separatist region of Transnistria and in Georgia’s breakaway republics of South Ossetia and Abkhazia. Armenia, backed by Russia, took control of the enclave of Nagorno-Karabakh and adjacent districts from Azerbaijan. In Crimea, Russian forces are now facilitating the slow dismemberment of the region from Ukraine.

To be sure, the EU is fighting back and says it still wants Ukraine’s next government to sign a trade association agreement, the rejection of which by President Yanukovych sparked the protests that eventually toppled him.

EU Sanctions

EU governments yesterday ratcheted up their response to Putin. Heads of state and government agreed to prepare sanctions against selected Russian officials after the Crimean referendum decision swayed some leaders who wanted to delay such a move. Trade and visa negotiations were also halted.

The presence in Brussels ofYatsenyuk, who accused the Kremlin of putting up a new Berlin Wall, also played a role, Merkel said after the summit.

“Tear down this wall, the wall of intimidation, the wall of military aggression,” Yatsenyuk told reporters earlier.

As Ukraine struggles to avoid default after three months of turmoil, the EU also pledged to add 1 billion euros ($1.4 billion) in emergency aid, which may form the nucleus of a package that could top 11 billion euros over seven years.

“This is a game not only about future of Ukraine,” Polish Prime Minister Donald Tusk said in a speech to parliament in Warsaw on march 5. “This is a game about the future of the whole region, including other eastern neighbors.”

Moldovan Values

That recognition has been missing for much of the past decade, says Moldovan Prime Minister Iurie Leanca, whose country has Russian troops on the ground in the disputed territory of Transnistria.

“We are in a very difficult situation because we fight for certain values and for certain objectives when there’s no response,” said Leanca in an interview on March 5. “We need a common vision.”

Finding that vision may not come naturally to an EU that’s still struggling to recover from a three-year debt crisis that threatened to blow up the euro and where electorates are suspicious of new member states. With unemployment across Europe near the highest in 14 years and anti-EU populist parties on the rise in countries such as France, the U.K. and the Netherlands before European Parliament elections in May, the bloc may have trouble staying united and focused on Ukraine.

Prague 1968

The EU suspension of the commercial talks with Russia yesterday echoed the bloc’s response to Russia’s invasion of another neighbor, Georgia, in 2008. Those contacts were resumed after two months and failed to dislodge the Russian troops that remain on parts of Georgia’s territory.

Former U.S. Secretary of Defense Robert M. Gates in his memoirs “Duties” published this year, says the Georgia response was par for the course for Brussels.

“A statement by the EU criticizing the invasion was predictably tepid,” he writes. “It reminded me of my initial crisis in government when, during my first week on the job at CIA in August 1968, the Soviets invaded Czechoslovakia. As horrified as the Europeans said they were by the brutal invasion, for them, everything was back to business as usual with the Soviets within three or four months.”

Techau said that while Putin is creating facts on the ground, the EU, while willing to engage long-term, “is playing a totally different game than Russia.”

“Russia is playing hardball geo-politics,” he said. “The EU is mainly just focused on developing Ukraine’s economy.”

To contact the reporters on this story: Leon Mangasarian in Berlin at lmangasarian@bloomberg.net; James G. Neuger in Brussels at jneuger@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net John Fraher


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus