Whither Ukraine? 2014. Ukrainian crisis Involves much more than the issues that set it off. Question of whether or not Ukraine’s current leaders justified

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Whither Ukraine? 2014 Slide 2 Ukrainian crisis Involves much more than the issues that set it off. Question of whether or not Ukraines current leaders justified in delaying the signing of an Association Agreement with the European Union now seems almost irrelevant. Crisis has served to crystallize the visceral disgust of many Ukrainians for the regime under which they have been living. Also led to the eruption of powerful latent tensions endemic to the Ukrainian polity. Slide 3 Alarming! More alarmed than I have ever been since I started following events in Ukraine in 2004. Can't see happy way out. Hope peaceful, stable solution can somehow be reached. Mikhail Gorbachev has suggested, Vladimir Putin and Barack Obama should take a resolute step towards helping Ukraine return to the path of peaceful development. Seems out of the question. Why? Slide 4 What happened in Ukraine? Standard version Yanukovych promised to sign EU Association Agreement. Russia exerted enormous pressure to stop him from signing. Yanukovych then turned his back on the EU Angry Ukrainians launched peaceful demonstrations in protest. Government used violence, demonstrations turned ugly Rada passed anti-democratic laws prohibiting peaceful demonstrations. Government violence against demonstrators continued, disappearances, beatings, torture. Slide 5 What happened? Corrected version Yanukovych, since he became President, has consistently been stressing Europe is Ukraines future. Many laws have being passed over the years bring Ukraine into conformity with European norms. Yanukovych tried to get EU approval to participate in Customs Union as well as EU. EU insisted Ukraine had to choose one or the other (although it concluded association agreement with Canada, which is part of the North American Free Trade Association. Slide 6 What happened? Corrected view (continued) Russian threats: Russians have made clear Ukraine would lose CIS status, border would go up, and what consequences would be. Russia would protect its interests, meaning disaster for Ukraine. Yanukovych and Government assessed situation at time of signing. Faced dead end for Ukraine. Bankruptcy inevitable soon. If EU and IMF conditions were met, it would certainly have brought people onto the streets because of consequencesespecially in Eastern Ukraine. Slide 7 Do the math Ukraine's hard currency reserves fell from $35bn in April to around $20bn in November. Below three months' import cover economists say needed to ensure the stability of the national currency. Should have already been sharp and extremely painful devaluation of at least 15%, but government propping up Hryvna. Country has effectively run out of cash--living on its credit cards Slide 8 Do the math Facing heavy bond redemption schedule--several billion IMF loans last year 7 billion maturing this year. International rating agencies downgrading Ukraine. EU offered only 1bn as reward for signing, With high cost of EU integration, higher prices for Russian gas, huge unpaid gas bills, and reduced trade with Russia, Prime Minister Azarov said: "We were told that Ukraine could count on 1bn. 1bn is nothing. One can say that it is a pittance to a beggar" Slide 9 IMF loan could tide Ukraine over but $15bn stand-by loan program could have made signing agreement possible. But IMF would not link its decision on the loans to the signing of the Association Agreement Ukraine had repeatedly lied to IMF in previous programme (ironically negotiated under Timoshenko's government), and has taken hard line. Will not release any money until government raises domestic gas tariffs and frees the currency exchange regime, and many other things. IMF money will be hard to get, will come with a big political cost and would not have arrived for months. Slide 10 Yanukovych: EU candy in pretty wrapper Yanukovych explained postponement (NOT CANCELLATION) of signing saying: "For three years in succession they have shown this candy in pretty wrapping to us... We don't have to be humiliated like this. We are a serious country, a European one," Yanukovych said. "When it corresponds to our interests, when we have agreed [with the EU] on normal conditions, [only] then can we consider signing. EU upped offer with another $610m Slide 11 Motivations of EU Two faces of EU: Hardnosed pragmatism and moralistic-ideological Eastern Partnership driven mainly by moralistic-ideological, led by anti-Russian Polish and Swedish proponents. Skepticism in EU about Ukraine, with its huge problems. Association Agreement very vague about how they will be solved. EU unable to provide serious support in light of its well-known problems. Euro skepticism widespread, UK thinking about leaving Unsolved problems Greece, Ireland, Spain, Portugal, Bulgaria, Romania. What is EU capable of doing in Ukraine? Slide 12 Deeper questions about EU motivation Why didnt EU perceive these problems, and when Ukraines leaders pointed them out, why did EU and US (Why is US in the picture at all?) not address them at all? Why have EU and US officials unquestioningly supported Maidan demonstrators and opposition? Unprecedented interference in domestic affairs of sovereign country. Coups in past (Iran, Chile, etc.) done secretly. This is public. Russian Foreign Minister Lavrov recently asked what Western reaction would be if Russian officials turned up at demonstrations in Athens to cheer on anti-government demonstrators? Slide 13 Explanation of EU and US behavior Stupidity, insensitivity? IMF and Germans (funders of EU) not known for soft heart with regard to poor mismanaged, over-spending EU members. Well-known that EU politicians not necessarily highest- level. Genuine concern for Ukraine? Widespread opposition, massive demonstrations suggest current regime highly unpopular. Painful though EU conditions might be, they are in best interest of Ukrainian people. Justifies harsh demands and violation of customary norms for relations among sovereign states. Slide 14 Ideological conspiracy? EU and US drivers of project dont like Yanukovych, are anti-Russian, and anti-Customs Union. Backing coup detat in Ukraine, either to help the Ukrainian people, or economic and geopolitical motivations. Planners surely must have realized version of Association Agreement presented no-win situation to Ukrainian leadership. Expected fierce opposition either if Yanukovych signed or, a bit later is he did NOT sign. (When severe consequences of Agreement hit Ukraine, especially Eastern Ukraine). Either way, they will get rid of Yanukovych and his regime, and bring in a pro-Western regime. Slide 15 Evidence of conspiracy Why the anger and impatience regarding delaying the signing? In normal, healthy democracy, it is normal for leaders to make such judgments, and for the voters to judge these judgments at next election. Under normal regime, such action would be debated by the opposition in the legislatureopposition would criticize the action in the media and in travelling around the country. Wouldnt democratic debate of pros and cons of Association be healthy? Maybe even a referendum in several years, such as planned in UK Slide 16 Why the hurry? Was it all planned and organized? Presidential election only one year away. Would it not make sense for national debate to be part election campaign? I have not heard a single argument as to why immediate signature is important. Why the hurry? Normally, demonstrations quickly dissipate if no leadership. Logistics: Tents, free food, security system, take-over of government buildings by apparently trained paramilitaries. How could it be spontaneous and organized so quickly (compare with invasion of Czechoslovakia) Slide 17 Unified position of EU, US, and Ukrainian opposition Calls for both demonstrators and government to refrain from violence, but concretely measures only aimed only at government. Calls for Government to make concessions and compromises. Government has made one concession after another, but opposition absolutely unyielding, calling every concession manipulation. (e.g. conditions of amnesty law) Apparently now prepared offer serious support, but only with US financial backing, but only to new government, and with severe conditions Slide 18 But isnt Yanukovych responsible for the mess? Critics allege billions stolen by Yanukovych family and friends, implying this explains the $15 billion gapalso inefficient management, failure to adopt needed reforms. Problems have plagued Ukraine since independence. When criticized earlier, Yanukovych said: Look, this is the Ukraine we got from our [Orange Revolution] predecessors. Little had changed under Orange regime. Same corrupt elite, same system, same inefficiencies. Situation worsened due to weakness, paralysis, and inexperience of Orange leaders. Slide 19 Yanukovychs main problem: Weakness Thinness of Yanukovych s base of legitimacy. Political polarization of Ukraine: East and West. Orange Revolution reflected breakdown of elite consensus on system based on contract between nationalists and Soviet apparatchiki. Nationalists agree not to touch power of entrenched Soviet bureaucratic elite if it would support independence. As Ukrainians lost fear, and as public consciousness developed, anger at system grew. Slide 20 Yanukovych cornered by own support base and Western Ukrainian nationalism Wait a minute! But are not Yanukovych and his support base one and the same corrupt, criminal, Soviet-regime-based elite? Real, fundamental reform almost always brought about by system- insiders. Outsiders almost always destroyed or defeated by system. Lyndon Johnson: Robert Caro biography: Caro portrays Johnson as corrupt, immoral, power-hungry, generally bad person. Yet, Johnson, according to Caro, achieved more for America than any other President in American history. Slide 21 Soviet elite and reform Think about Yanukovych and his background. Does he want to go down in history as a tool of