Russia, and its hardball-playing president, Vladimir Putin, may have won this round in Ukraine, and there’s not a lot that the United States can do about it—or should do about it—now that Russia and Ukraine have re-established economic and political ties. That’s bad news for Senator John McCain, who made a big splash visiting the Ukrainian capital of Kiev recently, and for American hawks who’ve tried to mobilize anti-Russian sentiment in the United States seeking some sort of quixotic showdown over the crisis there.
With Ukraine trapped between going “west”—signing a deal with the European Union that would have included political and judicial changes inside Ukraine and economic austerity measures imposed by the International Monetary Fund—and going “east,” aligning itself more closely with Russia, President Yanukovich chose the latter. The inducement was a $15 billion Russian plan to underwrite Ukraine’s debt and a huge cut in the price of Russian gas for the Ukrainian market, from nearly $700 per 1,000 cubic feet to just $268.50. That was incentive enough for Yanukovich to go along, and it probably secures Russia’s interest in Ukraine for the foreseeable future.
It wasn’t merely Russia’s generous offer that tipped the scale, but also the refusal by the EU to sweeten its offer. As a special report by Reuters today points out, “The unwillingness of the EU and International Monetary Fund to be flexible in their demands of Ukraine also had an effect, making them less attractive partners.” On top of that, the EU didn’t really offer Ukraine membership in the EU but some vaguely defined partnership.
Yanukovich slammed the parade of US and European officials who’ve been shuttling in and out of Kiev ever since the start of the mass protests there. “I am categorically against anybody coming and teaching us how to live,” he said. Somewhat hilariously, Russian Foreign Minister Sergei Lavrov, whose country has exerted enormous, blatant pressure on Ukraine to prevent it from going West, had this to say:
“Kiev is being flatly urged to make a ‘free choice in favor of Europe’—this very phrase is self-contradictory,” Lavrov added. “At the same time, a sovereign nation is being deprived of its right to deal with the situation on its own terms and function in accordance with its legitimate national interests.”
This was, of course, a blatant power play by Russia, which used its vast economic power in Ukraine to block the Ukraine-EU accord. As Tim Judah summarizes the hardball play from Moscow in the latest issue of The New York Review of Books,
In the meantime Putin was piling on the pressure. In August, trade ground to a virtual standstill as Russian officials began checking every single truck crossing the border. They began withdrawing licenses for certain companies—especially those connected to oligarchs in Yanukovych’s eastern heartlands—to export to Russia; and Russian importers began to break contracts already signed for metal products, steel, and cars. In only a few months the level of trade between Ukraine and Russia dropped 25 percent; in eastern Ukraine, one source who asked to remain anonymous told me, production dropped between 30 and 40 percent between May and November. All this served to compound Ukraine’s existing economic woes.