Don’t listen to Russia’s horror stories about Ukraine

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

After the election of Viktor Yanukovich as president of Ukraine in 2010, Russia thought it had achieved control over the country and undermined its programmes by pro-European forces there. As a result, Moscow now completely misunderstands developments in Kyiv, writes Yuriy Kochevenko.

Yuriy Kochevenko is a Ukrainian political analyst who has made frequent contributions to

Forecasts about the forthcoming crash of Ukraine's economy have no basis behind them and are a part of the planned informational campaign of Russia. The EU has got another opinion. European and world financial institutions have no doubts that signing of the Association Agreement with the EU will promote the growth of Ukraine's economy.

It's already not a secret for anyone that negative forecasts about Ukraine's economy disseminated by certain representatives of the Russian leadership are connected with Ukraine's EU integration aspirations. Ukrainians are already tired of Russian "horror stories".  A boomerang effect comes into action – the more terrible forecasts are, the stronger becomes the aspiration of Ukraine to the European values. 

The government of Ukraine and the expert environment is surprised by something else.  If Moscow's threats about inevitable catastrophe and default, produced by the adviser to the President of the Russian Federation Sergei Glazyev, arise already sarcasm besides commiseration in Ukraine. Then statements of the head of the Presidential Administration of the Russian Federation Sergei Ivanov look at least weird. Let's recall that in the recent interview to the Russian mass-media Ivanov, who is the former curator of the European direction in the Russian Foreign Intelligence Service has predicted considerable losses for Ukraine's economy after the signing of the AA with the EU.

Seems like Russia has stepped on its own rake in case with Ukraine.  Over the last years Russia was building its bilateral relations with Ukraine according to the residual principle, being led by the main thesis:  "Ukraine is right here around the corner and won't go anywhere, and taking into account economic and energy dependence on Russia, we'll put the squeeze on it if necessary".

Another fact is also paradoxical.  After the incumbent President of Ukraine came to power, Russia partially relaxed, having precipitately considered that the question of the foreign policy got resolved to its advantage.  Thus, Russia curtailed programs counteracting the "orange threats" in Ukraine. The activity of the pro-Russian forces in Ukraine which were too fond of application of budgets allocated by Russia fell.  And the activity of the remaining forces can be considered failed. 

Consequentially, the Russian leadership completely misunderstands  the social, economic and political situation in Ukraine. Therefore, it's not surprising that forecasts of the world and European financial institutions about the positive influence of the AA with the EU upon the economy of Ukraine cause sincere irritation in Russia.

Unlike the Russian economy, and amid the crisis European economies, the present state of the Ukrainian economy doesn't provide any preconditions for negative scenarios development.  In addition, the government of Ukraine understands that the process of embodiment of positive forecasts into life will take a lot of time and work. And Russia needs not to frighten and get outraged, but be ready to reconsider trade and economic frameworks of relations with its neighbours.  The EU integration choice of Ukraine is no news to Russia.  It had enough time to persuade Ukraine in the attractiveness of its economic associations.  However, it found nothing better than setting trade barriers.  Ukraine doesn't reject cooperation with Russia.  The leadership of Ukraine has repeatedly declared its readiness to join the provisions of the Customs Union which don't contradict the associate membership in the EU.  Especially when the economy of the Russian Federation is not in its best conditions as of today.  Decline of growth rates and recession is observed.

As opposed to pessimism of the Russian side, European politicians and western experts connect signing of the AA with a possible growth of Ukraine's economy. In particular, the president of the American Chamber of Commerce in Ukraine Jorge Zukoski has said recently that the Agreement will open access to one of the largest markets in the world. And, despite difficulties, it will increase competitiveness of Ukrainian and international businesses which work in Ukraine in the long run. He also expressed confidence that after the signing of the Agreement the number of western businessmen in Ukraine will increase, and investments will grow a lot. Thus, the main volumes will be directed to agriculture and food industry. Expert of Peterson Institute for International Economics Anders Aslund also looks to economic recovery and growth of European investments into the economy of Ukraine, citing the experience of Poland as the example. The Head of the EU Delegation to Ukraine Jan Tombinsky also shares these opinions. Although during the first stages after the signing of the AA the adaptation process in certain branches will be difficult, but with time it will lead to the growth of Ukraine's economy.

At the same time, we should admit that after the signing of the AA not all Ukrainian enterprises will be able to withstand competition. The strongest will survive as usually. Integration of Ukraine into the EU can promote the renewal of trade and economic relations with Russia and open new opportunities for other CIS countries. These opportunities will mean the expansion of the European sales market for production manufactured by the enterprises joint with Ukrainian ones. Besides, Russian companies which have worked in Ukraine for a long time will be able to say that they work at the European market and partially are European companies.

In any case, any forecasts remain only forecasts.  Meanwhile, the banking system of Ukraine demonstrates stability. This year hryvnia-US dollar exchange rate fluctuations have considerably diminished in comparison with the year of 2012. Gossips about devaluation of hryvnia and possible default of Ukraine on external obligations disseminated by "well-wishers" also remain only gossips.  Ukraine makes payments on external debts regularly and timely. 

At the same time, even regardless of joint efforts of the Ukrainian government and the whole EU, today nobody can give guarantees to Ukraine that in the near future it will be insured against the next information "attacks" on the side of Russia and massaging of forecasts about the negative development of Ukraine's economy.

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