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23 August 2017
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Is Ukraine leaving the European energy community?

 

As Ukraine’s relationship with the EU continues to flounder over human rights issues, the imprisonment of former Prime Minister Yulia Tymoshenko and the lengthy detention of former Interior Minister Yuri Lutsenko, there are signs that the government is prepared to flout existing laws to gain closer association with Gazprom and the Customs Union of Russia, Belarus, and Kazakhstan. The consequences could be not only the loss of links with the European Energy Community (hereafter EEC) but also the undermining of sovereignty.

On December 4, Russia’s Ambassador to Ukraine Mikhail Zurabov announced that the new gas agreement between the two states would have the status of an international agreement, rather than a business arrangement between the two responsible companies, Gazprom and Naftohaz. Russia is evidently responding to the EU’s plans for closer integration with Ukraine and greater transparency in the transit of gas from Russia to Western Europe. Analyst Maksim Alinov comments that the results of the inter-state agreement proposed by the Russian ambassador would override current Ukrainian laws, which make it illegal to transfer Ukraine’s transit system to Russian control—a similar sale to Gazprom occurred recently in Belarus. Alinov also believes that the flouting of the agreement in place would also give Russia significant influence over the internal economic and political situation in Ukraine (Zerkalo Nedeli, Dec 9).

Another analyst, Maksim Honchar, goes further, maintaining that Kyiv’s apparent reversal of policy on the EEC would violate the July 1, 2010 law “Concerning the main principles of domestic and foreign policy,” Article 7 of which stipulates that Ukraine’s oil, gas, and electricity networks should be operating according to EU rules. In his view this indicates a willingness to surrender national interests, which would be an even more serious threat to Ukraine’s pro-European policy than the imprisonment of Tymoshenko. It would also strengthen considerably the position of Gazprom, a monopolist enterprise that seeks to deploy energy as an instrument of political control. Ukraine would acquire cheap gas but gradually lose its sovereignty, rendering the Association Agreement with the EU obsolete and leading to the next stage, which would be a defensive alliance with Russia (Zerkalo Nedeli, Dec 9).

The EU meanwhile continues to demand the release of Tymoshenko as a prequel to the initializing of the Association Agreement, though with diminishing hopes and growing frustration. Wilfred Martens, President of the European People’s Party, stated that Ukraine, like Poland, could be an important EU player, and that without its addition the EU project could not be complete. However, as a prerequisite to the start of the process leading to the Agreement, the Party of Regions must release Tymoshenko, Lutsenko, and other political prisoners (UNIAN, Dec 7). However, Foreign Minister Kostyantyn Hryshchenko demurred, stating that Tymoshenko could not be used as a bargaining chip in trade relations and that her situation was a matter for the Ukrainian Judiciary. To discuss the issue in this way, he added, would be tantamount to indicating that the latter is not an independent body (UNIAN, Dec 7).

Although the ruling group of Ukraine faces several serious economic dilemmas and recently rejected for a second time the IMF’s demand to raise energy prices, it does not seem to be facing a serious threat from the opposition. Indeed, the political situation seems relatively unaffected by the Tymoshenko saga. Analyst Kost Bondarenko maintains that the population has lost interest in the struggle between Tymoshenko and the ruling elite, while Vadim Karasev considers that the apparent lack of public sympathy for Tymoshenko reflects the general perception of her as a former representative of the political establishment (Segodnya, Dec 7, and ff.). In general therefore that is a positive sign for the authorities and a signal that the arrest of Tymoshenko has not affected ratings for the president and the Regions Party.

The latter seems to be calculating each step in cynical fashion, taking action and then monitoring the response. Karasev also notes that the leadership thinks the release of Tymoshenko would be seen as a sign of weakness. Also the Ukrainian leaders are watching closely political events in Russia, where the rise of oppositional activities could have a domino effect in Ukraine. Various polls denote that Yanukovych remains the leading individual politician with ratings between 17.4 and 20.7%, whereas the ratings of Tymoshenko, the only serious contender, range from 13 to 14.1% (polls by KMIS, Social Monitoring, “Rating,” and Sotsis). Yatsenyuk in third place has, at most, 9.9% support. In short, there is no longer a serious contender from the opposition as with Tymoshenko out of the picture.

The ruling group may also consider that in the year 2011 it could have expected to see its popularity drop because of the introduction of unpopular measures such as pension and taxation codes, whereas the new year may bring better fortunes, not least through the hosting of the popular soccer competition, Euro-2012. Perhaps of more importance is the evident tolerance of the EU for the abuses of power in Kyiv, in contrast to the sanctions it has applied in Belarus. Ukraine has moved rapidly from one of the most democratic of post-Soviet states to a position well down the scale. At the same time the corruption that has long pervaded the Ukrainian economy has not diminished.

Adding to the contentedness of the ruling group in Ukraine, the United States is preoccupied with other issues and unlikely to engage with Ukraine at the highest level until after the 2012 presidential election, according to former US ambassador to Ukraine, Steven Pifer (http://www.brookings.edu/reports/2011/1208_ukraine_pifer.aspx?p=1). Thus Yanukovych and the Regions have in effect carte blanche to continue the current path. The EEC agreement appears to have been jettisoned.

However, for the second time since the January 2010 election (the first being the Kharkiv Accords on the Black Sea Fleet), they are posing serious threats to the sovereignty of Ukraine, relinquishing hard-won rights for the immediate prospect of cheap gas and permitting a much more powerful role for Russian agencies like Gazprom to step in and purchase Naftohaz. The next logical stage would be for Ukraine to join the Customs Union (with Russia, Kazakhstan, and Belarus). Only a year ago that would have been unthinkable, but it is now a serious possibility.

By David Marples

David R. Marples

Distinguished University Professor and Director,

Stasiuk Program for the Study of Contemporary Ukraine

Originally posted at http://ukraineanalysis.wordpress.com/ (Current politics in Ukraine; Opinion and analysis on current events in Ukraine)

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