Public unrest in Ukraine resulting from the country’s decision to postpone EU integration will not be fading away anytime soon.
A Ukrainian supporter of the integration with the EU. Photo: RIA Novosti / Alexey Kudenko
For almost a month, Ukraine has been gripped by mass protests and rallies prompted by the decision of the Ukrainian government right before the Vilnius Eastern Partnership summit to suspend signing an association agreement with the European Union. Even the arrest and trial of Ukraine's former Prime Minister Yulia Tymoshenko, the most popular opposition politician in Ukraine, didn't cause such widespread discontent among Ukrainians. And it looks like the unrest in Ukraine will continue into 2014, since the issue of signing these agreements has not yet been resolved.
At first glance, it seems obvious what Ukraine should do. They should negotiate with the EU, as some Ukrainian businesses and most of the population are demanding. Moreover, the legislation regarding European integration of Ukraine and its EU membership have already been passed, as this was the main goal of Ukrainian foreign policy.
However, the government of Ukrainian Prime Minister Mykola Azarov decided to halt the process of Ukraine's EU integration. The reasons behind this are not just related to the severe economic consequences for Ukrainian exporters that Moscow has been threatening. Actually, this issue of EU integration marked the beginning of the election campaign and the struggle for victory in the 2015 presidential elections.The main question for Ukraine's President Viktor Yanukovich right now is deciding who will help him get reelected for a second term. There are two paths he could take: Moscow or European integration. Each of them has its risks.
The first path would mean Ukraine joining a Customs Union with Russia, which would lower natural gas prices and reduce the trade imbalance with Russia and the burden on the state budget. Basically, this is the position of managers and employees of obsolete and unprofitable industries, whose products are not competitive in Europe and exported mainly to Russia. Reduced gas prices will lower production costs and will save jobs for a little while, but will not give companies the technology or investments they need to modernize production.
In this scenario, probably a majority of people in the industrial areas of Eastern Ukraine would vote for Yanukovich, whose support he has traditionally counted on. Membership in the customs union would also continue the practice of merging interests of the bureaucracy and business, which has been the foundation of the current political regime. However, this would strengthen the power of the Russian capital in Ukraine, which would undoubtedly have a greater impact on political decisions.
Moreover, joining the Customs Union would mean that Ukraine would largely preserve an economic system containing a large number of inefficiencies inherited from the USSR. But the longer they delay in finding a solution to these problems, the more costly it will be for them in the future.
The second path is to sign the agreements with the EU, which would increase Ukrainian exports to Europe, attract investment and technology, close unprofitable industries, and create new jobs. This scenario could pull the rug out from under the opposition and might even prod Central and Western Ukraine into supporting Yanukovich. These regions have been the ones demanding to live and consume as Europeans do.
Moreover, the majority of those who believe Ukraine's future is with the EU are middle-aged and young people. The Orange Revolution and Euromaidan have demonstrated that students play a very significant role in Ukrainian politics. There certainly are still voters loyal to Yanukovych in the east, but their numbers will significantly decline when Moscow’s likely sanctions cause grumbling and discontent among the machine-building, food, and chemical industry workers living there.
Yanukovych will find support from some big Ukrainian companies who will experience some losses due to Moscow's sanctions, but not complete disaster, as their products can compete on the European market. Meanwhile, when they embark on this path, the Ukrainian government will be forced to carry out significant structural and institutional reforms that will be unpopular with a significant part of the electorate and cause discontentment.
Meanwhile, Yanukovich is trying to buy time, delaying the signing of the association agreements and free trade area with the EU. The best solution for him would be to put off the final decision until the very eve of the 2015 presidential election, and so autumn of 2014, from this point of view, would be the best time for integrating with Brussels.
This would allow Yanukovich to go down in Ukrainian history as the "Euro integrator," would consolidate a significant part of the electorate, and would allow them to survive the 2013-2014 winter with no problems in relations with Russia. Moreover, the positive effects of Ukraine's EU integration would, for a short time before the election, overshadow the mostly unsuccessful reforms of the Ukrainian government and the problems of the Ukrainian economy: the growing budget deficit, rising unemployment, and the growth of overall public debt.
However, putting off the signing is also fraught with significant risks for Yanukovich. Undoubtedly, the Ukrainian opposition would use this time to score points in the political struggle for the presidency, criticizing the president for refusing to move forward in implementing one of the main goals of Ukrainian foreign policy – membership in the EU. Moreover, the longer Yanukovych delays the decision, the greater the likelihood that signing the EU agreements will be considered a victory for the opposition, rather than for Yanukovych.
The Kremlin has taken a tough stance on the current situation in Ukraine, continuously offering it to join the customs union and become a member of a broader Eurasian integration process. However, Russian policy toward Ukraine seems to be very conflicted.
On the one hand, Russia announced a modernization policy several years ago in which it would try to obtain investment and technology from the West in exchange for access to resources. But, on the other hand, Russia's dealings with Ukraine contradict this goal. Instead of negotiating alongside Kiev with the EU on modernization, Russia is trying to prevent Ukraine's integration with the EU. Although both Ukraine and Russia are in dire need of investment and technology, Russia is pressing first for a Eurasian Union, and only then will think about a common European economic space.
At first glance this does not seem quite logical. It's like flying from Moscow to Brussels via Beijing or Tehran. However, the contradiction can be understood if we assume that the modernization of the Russian economy is not the main objective of the Russian government, but only a tool they are using to keep the existing political regime in power without reforming political institutions.
In taking to the streets and squares of cities, the Ukrainian people are not only voting for European integration, but primarily for change. They associate Eurasian integration with attempts to recreate the Soviet empire based on dependence on cheap energy and postponing these changes indefinitely.
By continuing to offer Ukraine the customs union, the Kremlin is regarded as opposing what a majority of Ukrainians are aspiring to – the rule of law, respect for civil rights and freedoms, protection of private property, an effective fight against corruption, and both political and economic competition.
Russia is only reinforcing in the minds of Ukrainians an image of a country that has changed a little on the outside, but on the inside is still the same Soviet Union. And, of course, the mass protests in Ukraine are not a farce orchestrated by foreign agents. It must be finally accepted that Ukrainian society is craving European standards of living, and every Ukrainian politician will have to take this into account.