Within days the EU will have to decide what it can offer to help a new democratic and reformist administration survive enormous financial and economic as well as political challenges. Therefore the EU now has to think big and fast, writes Michael Emerson.
Michael Emerson is an associate senior research fellow at the Centre for European Policy Studies (CEPS) in Brussels. The present text is a shortened version of a commentary of the same title published by CEPS here.
After the traumatic events of the last week in Kyiv, all parties will be reflecting on their positions. Many people thought that the end of Yanukovich would only come in 2015. Instead it came suddenly, and with a vengeance, as a bloody escalation of the conflict left nearly a hundred dead after Yanukovich had authorised the use of lethal weapons, in line it seems with advice he was getting from Moscow.
Kyiv in memoriam. This last weekend has seen profoundly moving scenes on the Maidan. On Saturday morning [22 February] huge crowds of ordinary people gathered there peacefully, but tearfully, to pay homage to the hundred who had lost their lives earlier that week. Yanukovich had gone - his presidential office in Kyiv simply vacated, his sumptuous residence outside now open for visitors, being dubbed the ‘Museum of Corruption’.
On Saturday evening Yulia Tymoshenko arrived in Kyiv, liberated that day after 30 months in prison, and went straight to the Maidan, entering the stage as a semi-invalid on a wheelchair, to deliver an immensely powerful speech charged with emotion and many messages. One was that if again now some official asks for a bribe, he will fail, because standing in his way will be dead heroes of the Maidan – our heroes will never die.
The EU’s next move - think big. In Brussels and of course the whole European Union there is huge relief that the persistent work of High Representative Catherine Ashton and Commissioner Füle, and then the last minute mediation of the Polish, German and French foreign ministers, helped Ukraine step back off the escalator towards full-scale civil war and disintegration of the state. In passing the recent pejorative language of the US assistant secretary of state gets its reply.
But within days the EU will have to decide what it can offer to help a new democratic and reformist administration survive enormous financial and economic as well as political challenges. The EU now has to think big and fast. Fortunately the instruments are there, waiting to be developed and used.
First, the EU can up its pledge to co-finance an IMF rescue operation, to contribute 50% of the total, which overall could displace the need for Russian credits. There could be renewal of the idea vaguely floated a few weeks ago that the EU and US would assemble an international financial package, with possibly a first tranche in advance of an IMF operation. And maybe even a revolutionary idea. Could Russia, recently chair of the G8, be induced to join in a financial cooperative operation with the EU, US and IMF?
Second, the EU could resort to a typical feature of its association agreements, namely to sign an ‘interim agreement’ with immediate effect and without ratification delays. This interim agreement would see the EU immediately scrap its tariffs for imports from Ukraine, while Ukraine itself would only begin a gradual multi-year schedule for tariff reduction. This would give an immediate shot of incentives and encouragement for Ukrainian businesses to expand their exports to the EU market.
Third, it should send a set of linked messages to Moscow to further deepen economic cooperation around the EU-Russia-Ukraine triangle: (i) that the EU was willing now to start talks over free trade with Russia and its customs union, (ii) that Russia should itself invite Ukraine to open friendly talks to improve their existing free trade agreement, and abstain of course from further pressure to join the customs union, and (iii) that the three parties could examine how to design a model for, ultimately, the three bilateral free trade agreements (EU-Ukraine, Russia-Ukraine, EU-Russia) to be compatible and efficient together.
Russia’s post-mortem - a big rethink. After celebrating the successful end to the Sochi Olympic games, Russia’s political elite has to take stock of the colossal and tragic failure of its strategy of trying to pressurise its big neighbour into joining the customs union. Who is to blame for the hundred dead? Yanukovich in the first place, but with Putin right in there behind him. Russia’s set of serial diplomacy errors has been truly amazing. First, Russia backed the wrong horse in the politically incompetent and totally corrupt Yanukovich. Second, it sought to push on Ukraine a misconceived economic flagship project in the customs union. Third, instead of deploying Russia’s huge cultural soft power potential towards Ukraine, it resorted to blackmail. Fourth, it blinded itself into not seeing that Ukraine’s civil society and sense of independent statehood has transformed itself over the last two decades.
It is surely time for a big rethink in Russian foreign policy, at least in its European theatre of operations. Many observers are pessimistic over this happening under Putin’s leadership. An alternative view is that Russia’s foreign policy bottom line is pragmatism and realism. If its policy is found to have gone down a losing track, then it should be changed. At least such views begin to surface in the Russian press, with a first article already this last weekend beginning the post-mortem after the big failure in Ukrain . The big rethink now due in Moscow has to take on board elementary facts. Coercive policies towards this most important neighbour that prefers independence and democracy do not work. Such policies not only fail, but also cause huge collateral damage for Russia’s international reputation at a time when its economy desperately needs modernising investment from abroad, and first of all Europe and the West.