The falling price of oil comes as a further sanction on Moscow in the continuing conflict in Eastern Ukraine, Ukrainian Prime Minister Arseny Yatseniuk told a Brussels audience on Tuesday (16 December).
Yatseniuk, who came to Brussels on the occasion of the historic first EU-Ukraine association Council, was the guest of a conference organised by the European Policy Centre, a Brussels think tank.
Asked if the EU should consider further sanctions on Russia, Yatseniuk replied: “They are already in place. Forty bucks per barrel sounds not bad. And that’s even positive for the European and Ukrainian economy.”
In fact, the EU has so far been reluctant to introduce sanctions on Russian energy firms, out of fear that the effect would hurt many members of the 28-bloc more than it would damage Russia. However, as the Ukraine crisis has been ongoing since the annexation of Crimea last March, the prices of crude have been going down, hurting the Russian economy.
On Friday, Brent crude dropped below $62 a barrel, its lowest price since 2009. And the Russia rouble has lost over half its value against the dollar since the year began, with Russian central bank taking the drastic action to halt the rouble’s freefall on the foreign exchanges by raising yesterday interest rates by 6.5 percentage points to 17%.
“Putin miscalculated, thinking he can split the unity among EU member states. And he underestimated that the EU and the US will act in concert and will jointly address one of the most dramatic geopolitical crisis of this century.
The idea of sanctions, as he put it, was to press for further talks.
“It seems that Russia already paid and is paying the price. Look at the Russian rouble, look at the oil prices, and look at Russian inflation. Russia has limited access to the financial markets”, he said, adding that the West was doing everything to de-escalate the conflict, but also to make Russia pay for the military aggression and the illegal annexation of Crimea.
“We have to do more together, and I want to indicate that the Ukrainian success will be our own success, of the EU, of Ukraine, of the US and of the EU idea, I would say. If we succeed, this would be the best scenario for everyone, so we are not allowed to fail”, he said.
Yatseniuk is largely seen by the Kremlin as a hawk and the Russian leadership clearly prefers as an interlocutor President Petro Poroshenko. In particular, Russia fears his ambition for Ukraine to join NATO.
On a visit to NATO headquarters yesterday, Yatseniuk said that NATO membership was not on Ukraine’s radar until Crimea’s annexation. “I will tell you the screen of this radar has entirely changed,” he added.
The issue of NATO membership was not raised during the Q&A session, but Yatseniuk was asked to comment on reported Russian claims that Moscow had the right to install nuclear weapons in Crimea. In reply, the Ukraine Prime Minister said this was an illustration that the conflict had gone beyond Ukraine and Russia.
“Russia is constantly violating international law, Russia is constantly intimidating NATO member states, for example through the violation of airspace by Russian jets, and Russia started to violate nuclear non-proliferation treaties. This is a challenge for the entire world,” Yatseniuk said.
He reminded that Ukraine had renounced its nuclear arsenal in 1994, when it signed the Treaty for the Nonproliferation of Nuclear Weapons (TNPNW) with Russia, the USA and the UK, relinquishing weapons inherited from the former USSR.
Through the so-called Budapest Memorandum, these countries, which later included China and France, gave national security assurances to Ukraine, and also Belarus and Kazakhstan, where Soviet weapons were stationed. The Joint Declaration by the Russian Federation and the United States of America of 4th December 2009 confirmed their commitment.
As a result, between 1994 and 1996, Ukraine gave up the world’s third largest nuclear arsenal in return for those “security assurances”, which in fact didn’t preserve its territorial integrity.
Because of this, it is illegal to deploy nuclear weapons on Ukrainian territory, including in Crimea, Yatseniuk argued.
Russia’s aggressive stance on Ukraine is often seen as a reaction to the humiliation Moscow suffered at the end of the Cold war. Kyiv’s rapprochement with Brussels dealt a further blow to Moscow, which felt humiliated, the argument goes.
But Yatseniuk rejected this, saying it was Ukraine’s choice to get closer to the EU. “Those who are strong have to support Ukraine. Those who are weak can find an excuse that they were humiliated.”
Yatseniuk was accompanied by four of his ministers.
The crisis in Ukraine erupted after its former President Viktor Yanukovich cancelled plans to sign trade and political pacts with the EU in November 2013 and instead sought closer ties with Russia, triggering protests that turned bloody and drove him from power.
Moscow annexed Crimea in March following a referendum staged after Russian forces established control over the Black Sea peninsula in the biggest East-West crisis since the Cold War.
Pro-Russian militants control buildings in more than ten towns in eastern Ukraine after launching their uprising on 6 April. On 11 May pro-Moscow rebels declared a resounding victory in a referendum in Donetsk and Luhansk, which the West called illegal and illegitimate.
The fighting has escalated sharply after Ukrainian President Petro Poroshenko ordered on 1 July an assault on separatists. The EU's resolve to punish Russia strengthened after the downing in Ukraine on 17 July of a Malaysia Airlines passenger plane, killing all 298 people on board. 194 of the passengers were from the Netherlands.
Western leaders say pro-Russian rebels almost certainly shot the airliner down by mistake with a Russian-supplied surface-to-air missile. Moscow has blamed Kyiv for the tragedy.
On 27 August NATO and the U.S. said Russian incursions into Ukraine took an ‘overt and obvious form’ and on 28 August Poroshenko said Russia had invaded Ukraine.
A truce was agreed on 5 September, but the situation has remained volatile.