Eastern Europe gripped by political instability


Growing political instability in Latvia, Ukraine and Georgia are mainly triggered by the global economic crisis and deep internal problems, such as corruption. But problems with Moscow could be adding an extra “irritant” to an already bad situation, according to leading analysts questioned by EURACTIV.

Ukraine, Georgia and Latvia are moving into a period of political instability as they sink deeper into economic recession. 

On 13 February, the government of Ukrainian Prime Minister Yulia Tymoshenko survived a no-confidence vote in parliament. Her situation has been further complicated by a power struggle with President Viktor Yushchenko, once a close ally. 

A mission by the International Monetary Fund reviewing Ukraine’s arrangement with the fund left Kiev last week without making it clear whether or not more funding will be released to keep the economy afloat. Ukrainian Finance Minister Viktor Pynzenyk quit his post on Thursday over budget and policy disagreements with Tymoshenko, the Associated Press reported. 

In addition, Ukraine’s foreign minister, Vladimir Ohryzko, was reported as having instructed the country’s embassies abroad to report at the “highest possible level” the “unscrupulous and inadequate actions” of his prime minister. 

In Georgia, many opposition figures blame the president, Mikhail Saakashvili, for the country’s troubles and are calling on him to resign (EURACTIV 02/02/09). Many foreign investors have fled, leaving Georgia with the highest unemployment rate in the Caucasus. 

In Latvia, recent riots illustrated just how badly the Baltic country has been hit by the global economic crisis (EURACTIV 14/01/09). But now experts say that the Latvian economy is in terrible shape, even by the standards of the global financial crisis. “The Latvian economy is staring into the abyss,” said Neil Shearing of London-based Capital Economics, quoted by Deutsche Welle. 

As political instability grows in Ukraine, Georgia and Latvia, EURACTIV asked analysts to comment on the background of these developments and the Kremlin’s possible role in the region’s current instability. 

The analysts largely agreed that the main cause of instability is the difficult political and economic contexts in these countries, which include high level corruption and bad governance. Hostile meddling by Russia is only seen as a secondary factor. 

Moreover, the worsening economic situation in Russia itself and instability throughout society there were singled out as handicaps for Moscow. Recently, Thierry de Montbrial, president of IFRI, the French Institute of International Relations, warned of a doom-like scenario in which falling oil prices would cripple Russia’s economy (EURACTIV 06/02/09). 

Fraser Cameron, director of the EU-Russia Centre in Brussels, said that in his view, the world economic crisis and "massive corruption" in Ukraine and Georgia are for the most part to blame for the worsening situation in these countries. 

"There is no question that Russia wants to have these countries under its influence. But its means to do that are limited essentially to the energy weapon. And that's not something they can use with 100% impunity, because there are international rules," Cameron said. 

The director of the EU-Russia Centre admitted that Russia is using its Soviet time network to influence on its neighbours, but also warned that this was not the main underlying factor. 

"They [Moscow] have been using bribery to influence politics in some countries, that's also quite clear. But it's difficult to assess how effective they have been," said Cameron. He added that the counties in Russia's surroundings are weak, but so is Russia. 

"Russia is severely hit by the economic crisis. Russia is not a very stable society either. So I think the opportunities are rather limited here. Gazprom is running around, trying to find money in London, Paris, New York and Frankfurt for capital investment," Cameron observed. 

Tomas Valasek, director of foreign policy and defence at the Centre for European Reform in London, also told EURACTIV that before analysing the state of Russia's neighbours, one should first examine the situation in Russia itself. 

"I don't see very much Russian cloak-and-dagger manoeuvring in Latvia. The political scene has been producing basically the same government for the past six or seven years, there have been elections every other year, people are frustrated, and when you couple it with the economic crisis, the real drop in living standards, that explains the instability. You don't need to look for Russia," he said. 

For Ukraine, he stressed that "bad governance and corruption" is "very much behind the picture". 

"Again, you don't need to look for Russia. Russia has been a factor, Yushchenko accusing Timoshenko of being a Russian agent, and Yanukovich accusing both Timoshenko and Yushchenko of being irresponsible in Russia policy. Russia has been used more as the object that the political class has been throwing at each other, rather than somebody who has been doing the acting". 

Georgia is a completely different case, Valasek admitted, adding that Moscow had chosen to turn the Caucasian country into an example of what happens to a country when it openly provokes Russia. 

"The war scared investors, the war destroyed a lot of value, the war has made it impossible for Georgia to raise funds in other ways than through a donor's conference. How can we separate Russian hands from the economic trouble Georgia is in?," asked Valasek as a rhetorical question. 

The analyst also singled out the problems facing Russia in the context "of the current global economic recession, if not depression". He added that some countries had been hit more than others, if measuring the impact in terms of the falling value of the stock markets and the devaluation of the national currency, which in his words is exactly what happened in Russia. 

Amanda Akcakoca, a policy analyst at the European Policy Centre, told EURACTIV she did not consider it fair to blame Russia for all things that are going wrong in Ukraine and Georgia. 

"Clearly, in the case of Ukraine, a lot is to do with its internal political situation," Akcakoca explained, adding that the internal political in-fighting between Yushchenko, Tymoshenko and Yanukovich plays for the interest of Russia. 

"In this way, Ukraine offers Russia the role of a player in its political scene on a silver plate," she stated. 

In the case of Georgia, she observed that in spite of confusing media reports, Saakashvili stays more popular than the opposition, because the opposition is fragmented. 

"I would agree that Russia does irritate the situation in these countries, but it’s the domestic situations which at the origin of this," Akcakoca said. 

In Latvia, recent riots illustrated just how badly the Baltic country has been hit by the world economic crisis (EURACTIV 14/01/09). 

But political tensions with Moscow seem to be adding to recessionary fears in some of Russia's neighbours. 

Russia's resentment toward Georgian President Mikheil Saakashvili is widely known. In a conversation between Vladimir Putin and French President Nicolas Sarkozy two months ago, Russian Prime Minister Vladimir Putin reportedly went as far as saying that he wanted Saakashvili hanged. The content of the conversation was revealed by an aide to the French president. 

A similar attitude toward Ukraine's president, Viktor Yushchenko, became apparent during the recent gas crisis (EURACTIV 14/01/09). 

As for Latvia, Putin recently indirectly blasted the country over its failure to grant so-called 'non-citizens' (ethnic Russian residents of Latvia) the right to vote at local level during his last meeting with European Commission President José Manuel Barroso (EURACTIV 09/02/09). 

Subscribe to our newsletters