The $15 billion lifeline offered to Ukraine by Russia is not a black and white victory for either Russian President Vladimir Putin or embattled Ukrainian leader, Viktor Yanukovych.
Both Putin and Yanukovych can, however, claim short-term tactical wins. With this deal, which includes loans using money from Russia’s national welfare fund and deep discounts on natural gas, Yanukovych has bought himself time to avert an economic crisis.
Yanukovych has for now skirted IMF conditions, which are needed for Ukraine’s long-term economic development but are unpopular and painful in the short run.
Putin, for his part, has succeeded in averting a near-term deal by Ukraine to pursue deeper integration with the European Union.
But the known terms of the Ukraine-Russia deal also underscore the precarious nature of these temporary wins. Putin, in particular, did not get all that he wanted.
Appearing with Yanukovych in Moscow to announce the deal, Putin conceded that the emergency infusion of cash was not conditioned on Ukrainian assent to join Moscow’s Eurasian Customs Union. Locking Ukraine into the Customs Unions would have been a step toward Putin’s dream, perhaps driven by imperial nostalgia, of establishing a new Eurasian Union, reconstituted from the remnants of the former Soviet Union. Belarus and Kazakhstan are already members of the Customs Union, soon to be joined by Armenia. Putin clearly hopes Ukraine will be next.
No such union can be strategically complete without Ukraine, Europe’s second largest country and the historical center of what eventually became the Russian Empire. But Putin appears to have understood that insisting on Ukrainian membership now would have emboldened and embittered the political opposition, not to mention the thousands of Ukrainians protesting in Kiev’s frigid Independence Square. For the same reason, Yanukovych told EU High Representative Catherine Ashton that he “intends” at some point to conclude a deal with Europe, the outcome Putin seeks to avoid.
The Putin-Yanukovych victory is also tenuous because the situation in Ukraine is profoundly different today from what it was ten years ago, at the time of the Orange Revolution. Then, Ukrainian public sentiment was much more starkly divided between East and West. Today, however, a majority of even Yanukovych’s eastern leaning Party of Regions supports closer ties with Europe, according to recent polls.
The deal has also further damaged Yanukovych’s credibility with the EU. While Europe formally intends to leave its door open to Ukraine, its negotiators have grown weary of Yanukovych’s vacillations and apparently empty promises to pursue reform, and have announced a “pause” in the negotiations. EU members are hardly united in their enthusiasm for deeper ties with a poor and poorly governed country on its eastern periphery at a time of economic distress in many EU countries. EU officials in charge of the negotiations with Ukraine need credible assurances of reform in order to have Brussels’ support to move ahead. The EU may well conclude that it is better to await the outcome of the 2015 Ukrainian elections before reengaging seriously.
For its part, the United States is closely coordinating its positions with the EU which, appropriately, has the lead. Secretary John Kerry correctly spoke out strongly about the dangers of a violent response against the protests. Washington needs to make clear to the Yanukovych government that United States and Europe are speaking with one voice. Although Washington seems to have abandoned the reset with Russia and relations with Putin are cool, Washington is not seeking a confrontation with Moscow over Ukraine. Washington’s focus is keeping Europe’s door open to Ukraine, and emphasizing the importance of Ukrainians being able to determine their own fate, democratically and without fear of violence or coercion.
Washington needs to continue to make it clear that it is paying close attention to Yanukovych’s moves, whatever other foreign policy priorities may demand the attention of the United States. One useful step in this regard would be for Washington to consult closely with both Berlin and Warsaw on the next phase of policy towards Kiev. Germany and Poland both have strong interests in closer relations with Ukraine.
The benefits of the Putin-Yanukovych agreement are clear in the short term. Ukraine gets a temporary lifeline, while Russia manages to deepen its sway with what Putin calls a “sister nation.” In the long-term, Ukraine will need to find a way to address its economic woes with real reforms, rather than continuing to play Europe off against Russia in search of the best deal. Russia, for its part, will need to find a way of engaging with Ukraine without continuing to shell out billions of dollars, which would have been an unsustainable form of diplomacy even in Russia’s boom days.
Russia and Ukraine’s pasts are inextricably linked, but the only viable path for Ukraine’s future leads West. The United States and Europe can and should help to guide Ukraine along that path, making it clear that it stands for the principle that Ukrainians should be free to decide their own future.