Ukraine turns away from democracy and the EU By Tomas Valasek ★ Many in Europe worry that the new government in Kyiv is taking Ukraine into Russia’s orbit. Others fear that the president, Viktor Yanukovich, will play Russia off against the West. Both groups miss the main change in Ukraine: the country is turning inwards and becoming increasingly authoritarian. ★ The president has taken steps to muzzle independent media, harass critics and sideline the opposition, ostensibly to improve governance. The EU should discourage Yanukovich from building a one-party system, while supporting the economic and energy reforms he launched in the summer of 2010. ★ Ukraine’s progress towards EU membership will continue to be very slow. Yanukovich is focused on consolidating domestic power and rebuilding the economy. His diplomacy will be focused on short-term objectives that are inconsistent and often contradictory.
In February 2010, Ukrainians elected Viktor Yanukovich as the country’s new president. In his first month in office, Yanukovich declared that his country no longer wanted to join NATO. Then, in April, he signed a deal with Moscow to allow Russia’s Black Sea Fleet to stay in the Crimean port of Sevastopol until 2042. The president’s first steps alarmed those who wish to see Ukraine move closer to the EU. They seemed to suggest that Kyiv was returning to Moscow’s sphere of influence, or at least acquiescing in Russia’s attempts to draw it in. Ukraine is very important to the EU’s eastern policy; with a population of 46 million it is the second-largest country in Eastern Europe. Is it now becoming a Russian satellite? This policy brief argues that the new government in Kyiv is less beholden to Russia than its early decisions indicate. While Ukraine will be friendly to Moscow, it will also struggle with the Kremlin over control of key industries in Ukraine. Kyiv’s co-operation with the EU will stagnate but for reasons that have little to do with Russia: key EU capitals have lost appetite for further EU enlargement while European integration is not a priority for Yanukovich.
Centre for European Reform 14 Great College Street London SW1P 3RX UK
The president is far more focused on reviving Ukraine’s economy and consolidating power. His early steps also suggest that he may be building a one-party state. This, rather than Ukraine’s Russia policy, should be the focus of EU capitals and institutions. They should use their influence to preserve democracy in Ukraine while supporting Yanukovich’s economic reforms.
Deficits, disagreements and dysfunction Viktor Yanukovich has sound reasons to focus on domestic challenges rather than international ones. He has inherited a country with deep-seated problems. Ukraine’s economy remains highly dependent on exports of steel. In 2009, the country’s GDP shrank by 15 per cent, chiefly because steel prices collapsed. The government came close to defaulting, partly because of the economic contraction but also because of the country’s ruinous gas subsidies. Ukraine’s gas monopoly, Naftogaz, buys from Russia at close to West European average prices but, until recently, resold to companies and households at a heavy discount. The government, in turn, spends nearly 2 per cent of GDP annually subsidising Naftogaz.
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