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Can Ukraine Shed Its Soviet Skin?

Can Ukraine Shed Its Soviet Skin?

A chance to move closer to the European Union—or slide back toward Russia—could be an inflection point in Ukrainian history.

It is hard to believe that the election and events that set into motion Ukraine’s Orange Revolution took place nearly nine years ago. The scenes of young Ukrainians camping out on Kiev’s Maidan Nezalezhnosti (Independence Square), demanding that their voice be heard and the will of the people not be ignored, was a moment which many believed was not only an awakening for Ukraine, but also a significant change in the whole of the former Soviet Union. One of the largest of the former Soviet states (excluding Russia) had finally begun to make its first strides towards Europe.

The energy and hope that arose out of the Orange Revolution was one of the main drivers behind a movement to bring a final end to the already tattered Iron Curtain. This initiative, which was launched in 2009 under the leadership of Sweden and Poland, became known as the Eastern Partnership (EaP). The goal was to create conditions that would enable greater political association and further economic integration between the European Union and the partnership countries. The belief then was that this project would speed up democratic, economic, institutional and civil-society reforms to bring these states closer to Europe. Membership in the Eastern Partnership was opened to the remaining “European” states that were once members of the Soviet Union—Belarus, Ukraine, Moldova, Armenia, Azerbaijan and Georgia. The 2008 war between Russia and Georgia further emphasized the need to create a stronger engagement with these countries, especially if they have aspirations to join the European community.

Since 2009, however, the success of the EaP can be viewed as somewhat mixed. Negotiations with the member countries progressed at different speeds with varying results. Relations with Belarus and Europe have veritably come to a standstill. Similarly, Azerbaijan is ruled by an authoritarian regime showing little interest in pursuit of European values such as transparency and an open democracy.

Still, there is some success that the EU hopes to showcase during the upcoming Eastern Partnership summit on November 28-29 in Vilnius, Lithuania. Georgia and Moldova will both sign association agreements with the EU, which will pave the way to reaching this goal of closer integration. Armenia was also on this path after spending almost three years of negotiations with the EU. However, some strong convincing by Russia has drawn Armenia back to its sphere of influence. Armenia’s President Serzh Sargsyan unexpectedly announced in early September that his state will instead join the Russia-led Customs Union, an EU competitor which is meant to lead to stronger integration of the countries of the former Soviet Union.

Armenia’s surprise move opened many eyes in EU foreign-policy circles and proved that Eastern Europe should not be taken for granted. We should not treat the countries of the former Soviet Union the same way that we treated the countries of Central Europe (Poland, Hungary, the Czech Republic, and Slovakia). There is an alternative for the Eastern European states. It is an alternative based on contemporary history and culture, but also on geopolitics and realpolitik, and has significant support among the population of these states. Public opinion in many of the Eastern Partnership countries reflects support for the Eurasian Union as well as the EU. What’s more, at a time when Europe is still struggling to get out of economic crisis and Euro-skepticism is on the rise, a reintegration with Russia may not look like such a bad idea.

The biggest Elephant in the East remains Ukraine, the largest of these countries. For both Europe and Russia, Ukraine is still considered to be the big prize. With a population of over forty-five million people (more than its western neighbor Poland) Ukraine’s potential as a consumer society is quite large. Opening up European markets to Ukraine and vice versa could be potentially a game-changer in the Eastern European region. A large section of Ukraine’s population is Russian-speaking, which can be advantageous to European companies who want to eventually do more business in Russia and other parts of the former Soviet Union.

But it is yet uncertain if Ukraine will actually sign any agreements with the EU in November. The two agreements that are on the table for Vilnius are an association agreement with the EU as well as a separate free trade agreement called the Deep and Comprehensive Free Trade Agreement (DCFTA). By establishing a free-trade area with Europe, Ukraine would have better access to Europe’s markets and could expect increased foreign direct investment. Europe would expect Ukraine to modernize its regulatory system to meet EU standards and bring its business practices (including anticorruption) in line with those in the EU. The association agreement would likewise require Ukraine to conform to EU political norms, which includes a reformed justice system and truly free and fair democratic elections.

Both agreements have been negotiated for the past several years and are intended to be signed together in Vilnius. Everything was generally on track until 2011, when the negotiations began to falter. As a result of the politically motivated trial and later imprisonment of the former prime minister and opposition leader, Yulia Tymoshenko, European leaders began to question their decision to engage Ukraine so intensively. The parliamentary elections in 2012, which in many districts saw irregularities, reinforced Europe’s skepticism toward Ukraine. As a result, Ukraine quickly went from poster child to problem child.

By early 2013, it became questionable whether the EU will actually sign the agreements. In a bold move by a bloc that rarely makes them, the EU put forward strict criteria that need to be met by Ukraine before signing any agreement. It initially seemed that Ukraine was going to call the EU’s bluff and carry on, in the belief that the Europeans will compromise on their values to bring Ukraine closer to Europe no matter what. This would have given Ukraine the upper hand. But it quickly became clear that the EU meant business—there are no free passes if you aren’t going to play by the rules. Polish Foreign Minister Radosław Sikorski emphasized this point eloquently when he stated in May 2013 that if Ukraine misses this chance to sign the agreements in November, no one knows when such a chance will come again for Ukraine.

As described earlier, geopolitics is also at play here. Russia has been lobbying hard for Ukraine to abandon (or at least rethink) its European ambitions. The moment Russia realized that Ukraine is leaning towards Europe, it took punitive actions to show it also meant business—essentially calling for a block on all Ukrainian imports to Russia (one of Ukraine’s largest trading partners). The first victim has been Ukrainian chocolate.

Anders Åslund recently interpreted the Russian maneuver as a sign of “politics mixed with old Soviet economic thinking.” It is true that many inside the Kremlin still see the region through the prism of the old Soviet Union; while others fear the PR backlash of “losing” Ukraine and other former Soviet States to Europe and the damage that this would cause to Russia’s global position (or its efforts to reposition itself as a leader of Eurasia). However, Russia stands to lose economically if it cannot convince Ukraine to join its customs union. The only other current members are Belarus and Kazakhstan (with Armenia just announcing its intentions, succumbing to Moscow’s pressure). Ukraine’s economy is one that actually could bring real benefits to the customs union, while the other countries have much less to offer in return.

Hence, Ukraine has painted itself into a corner with only two options: choose Europe and expect (maybe) long-term growth, but at a cost of conforming to European norms, including stronger democratization and more human-rights protections, while at the same facing fierce reprisals from Moscow; or don’t sign the pact, join the Russian customs union with very few strings attached, but brace for serious political and social backlash by those pro-European (or at least anti-Russian) Ukrainians. The regime and the oligarchs of Ukraine pragmatically understand this choice and have weighed their options. In all likelihood we will probably see the Tymoshenko case resolved, albeit somewhat grudgingly. But I believe we can expect that the Ukrainian officials will be signing those EU documents in Vilnius.

Let us have no illusions. Ukraine is still a far way off from being ready for EU membership (which remains off the table). But this step is critical. The ball is now in President Viktor Yanukovych’s court. Should he decide to take Ukraine one baby-step closer to Europe, we may be looking back on 2013 as a pivotal moment.

Bear in mind, however, that signing the agreements is just the beginning. For the elephant in the East, a lot of work will remain to be done. The agreements will need to be ratified by the Ukrainian parliament as well as by all parliaments of all twenty-eight EU member states. Considering the current political and economic environment throughout Europe, this could prove no easy sell. Implementation of the agreements on Ukraine’s side will be long and difficult, requiring serious reforms in the business and political sectors as well as in public administration. Presidential elections loom for Ukraine in 2015. Therefore, we should not expect 2014 to be a year of painful reforms, many of which will affect a society that still remembers the old Soviet-style social-support system.