Wednesday, November 20, 2013

Viktor Yanukovich: Ukraine Enigma At Centre Of EU-Russia Contest

KIEV, Ukraine -- As Ukraine confronts what has been cast as a “civilisational” choice between closer ties with the EU or Russia, the biggest question mark remains the country’s enigmatic president, Viktor Yanukovich, whose manoeuvring between east and west has confounded both sides.


Political rivalry: President Viktor Yanukovich has been criticised by the west for the jailing of Yulia Tymoshenko.

At an EU summit in Lithuania next week, Mr Yanukovich will have the opportunity to seal a far-reaching association and trade pact that would open the path to much closer co-operation with Europe.

It includes access to the world’s biggest single market and the prospect of massive investment – not to mention a definitive break from Moscow’s centuries-old influence over the country.

But as EU foreign ministers meet in Brussels today, many are fretting about why – after months of intensive negotiations – Ukraine has still failed to satisfy the final conditions for signing the deal.

Chief among them is freeing Yulia Tymoshenko, the former premier and Yanukovich foe jailed in 2011 in what the EU has called a “selective prosecution”.

“Everything is in the hands of President Yanukovich,” Carl Bildt, the Swedish foreign minister, said on Monday.

“I think we have a policy; I’m not sure whether he has a policy.”

Chancellor Angela Merkel of Germany said that the association agreement with Ukraine remained uncertain.

She told the German parliament on Monday:

“We still can’t predict whether Ukraine is willing to implement the conditions for a signing.”

She did not refer to the Tymoshenko case directly but called on Kiev to take “credible steps” to end “selective justice”.

Mr Yanukovich is a former mechanic and municipal bureaucrat from gritty, industrial Donetsk who served prison time in his youth for theft and assault before entering politics.

Many who have dealt with him in the west still view him as Soviet in his style and outlook.

Recent suggestions by his government that the International Monetary Fund step in and provide assistance if he agrees to sign the EU pact has struck many, including top officials at the IMF, as Soviet-style brinkmanship that showed a lack of understanding of how negotiations with such western-founded institutions normally progress.

“There is no movement on their side,” said one person involved in talks with Kiev.

People who have studied Mr Yanukovich say it is important to avoid misconceptions.

While he was routinely called “pro-Russian” before becoming president, for example, Mr Yanukovich has been anything but.

His first foreign trip after winning a narrow election victory over Ms Tymoshenko in 2010 was not to the Kremlin but the Berlaymont, the headquarters of the European Commission.

He has a testy relationship with Vladimir Putin and has resisted intense pressure to join a Russian-led customs union with other ex-Soviet states, due to become a “Eurasian Economic Union” by 2015.

At the same time, despite the Ukrainian leadership’s proclaimed commitment to European integration, people who know him suggest Mr Yanukovich’s overriding goal is not westernising his country.

It is ensuring that he, his circle and his business backers in Ukraine’s highly oligarchic system survive 2015 presidential elections and stay in power as long as possible.

James Sherr, a Russia and Ukraine scholar at London’s Chatham House think-tank, believes Mr Yanukovich would instinctively prefer an EU agreement.

Despite the reforms demanded by Brussels, he suggests Ukraine’s president paradoxically feels allying with the west is better for him and his entourages.

“[Ukraine’s leaders] think they can play the EU game by rewriting laws, by mimicry and manipulation, and making certain changes that are in their interests, but not touching the rest of [the system],” he says.

“But they feel that integrating with Russia is something else. It’s about Russian domination.”

A major complication, however, is EU insistence that Ms Tymoshenko must be freed and pardoned.

Ms Tymoshenko is Mr Yanukovich’s nemesis, as co-leader of the Orange Revolution that thwarted his 2004 presidential bid.

If allowed to re-enter politics, Ms Tymoshenko could be a powerful challenger in 2015.

Mr Yanukovich must also worry that, if he lost, he himself could be jailed.

“Yanukovich fears Tymoshenko as one of the key managers that could organise a humiliating defeat for him in 2015, much like in the Orange Revolution. He is very much today being driven by his fears, seeking options that can guarantee his re-election,” says Serhiy Taran, director of the International Democracy Institute in Kiev.

Yet in Mr Yanukovich’s calculations, even the Tymoshenko issue may not be decisive.

Instead, with Ukraine in recession and facing potential balance-of-payment problems, Mr Yanukovich may be weighing up the short-term economic impact of agreements with the EU or Russia – and manoeuvring to get both to improve their offers.

Russian bans in recent months on Ukrainian products ranging from chocolates to steel, and beefed-up customs controls on the border, have given Kiev a much starker understanding of the potential costs, in lost Russian trade, of an EU deal.

That could lead to a popular backlash, even though opinion polling shows half of Ukrainians currently favour an EU agreement.

“Russia is closing the door to many of our products. Ukraine will [also] be flooded with higher-quality, more competitive EU goods,” says Kosts Bondarenko, a Yanukovich adviser.

“The roughly $1bn that EU leaders are offering covers only a small part of Ukraine’s needs.”

Mr Yanukovich held two closed-door meetings with Mr Putin on consecutive weekends.

The Kiev rumour mill suggests Russia’s president delivered dire warnings of the consequences of EU integration, and offered lower Russian gas prices and multibillion-dollar loans if Ukraine instead did a deal with Moscow.

That may explain why senior Ukrainian officials have begun talking of a “shopping list” of additional demands from the west.

These included rapid delivery of an IMF bailout, and faster EU market opening with more upfront financial assistance.

“This is all a game of bluff and counter-bluff by the Yanukovich regime,” says Tim Ash, emerging markets analyst at Standard Bank.

Western officials warn privately, however, that while the IMF could offer Ukraine a multibillion dollar bailout if it accepts its reform conditionality, little extra money may be available from the EU for Ukraine.

As Mr Ash puts it, Mr Yanukovich might be “well advised not to overplay his hand”. 

Source: ft

1 comment:

Igor Skakovsky said...

Mr. Yanukovich should negociate with the West his own protection from prosecution in case he loses 2015 election, such guarantees will allow Mr. Yanukovich to take a step forward with commitments to EU values and will free his hands in all the cases, such as Tymoshenko case, judicial and general election rules.