Ukraine stuns EU by putting association deal on ice


Kyiv has decided to put its move for closer integration with the EU on hold in favour of talks to revive economic relations with Russia, one week before the country was expected to sign a landmark association agreement with the 28-country bloc in Vilnius.

EU diplomats made no secret of the fact that they were flabbergasted by developments in Kyiv today (21 November).

First, the Ukrainian parliament failed to pass laws that would allow jailed opposition leader Yulia Tymoshenko to go to Germany for medical treatment. Her release was seen as a sine qua non condition for the signature of the association agreement (AA) in Vilnius.

Neither the Party of the Regions President Viktor Yanukovich, also the country's president, and the Communist Party did not cast votes, the six draft laws failed to gather the required 226 votes to pass.

"President Yanukovich is personally stopping Ukraine's road to Europe," said former Economy Minister Arseny Yatsenyuk, leader of the Batkivschchyna party of Tymoshenko.

A photo circulating over social media depicted EU Ambassador to Kyiv Jan Tombi?ski, present during the vote, holding his head in despair.

Two hours later, the Ukrainian government announced it had decided to stop its preparations to sign an association agreement with the EU. The statement underlined that the decision was taken with a view to elaborating measures towards “Russia and other countries from the Community of Independent States”.

Ukraine said it would propose to the EU and Russia the formation of “a tripartite commission to handle complex issues”. Also, Kyiv will “resume an active dialogue with the Russian Federation and other countries of the Customs Union and the member states of the CIS on the revival of trade and economic relations in order to preserve and strengthen joint efforts of economic potential”.

The statement does not say whether Ukraine intends to join the Customs Union led by its former Soviet master Russia (see background), which the EU says is incompatible the statute for countries associated with the Western bloc.

The statement has thunderstruck EU officials. Appearing at a press event minutes after the Ukrainian government’s decision became known, Linas Linkevi?ius, foreign minister of Lithuania, the country holding the rotating EU presidency, said there was not enough clarity following the announcement, and the best option was “to wait” for more information.

“Very difficult to comment immediately, very difficult to say something more. We always said it was in the hands of Ukrainians how to behave, that it was in the hands of Ukrainian leadership, especially of President Yanukovich,” he said.

Linkevi?ius said the hosts of the Vilnius summit were searching for answers to many questions ahead of the meeting.

He appeared to try to make light of the situation by saying that the developments were “interesting, not boring”.

“We don’t have clarity from Ukraine. Let’s wait. Political life is intensive and very dynamic,” Linkevi?ius said.

Asked by EURACTIV if it was a mistake to present the closer EU association of Eastern partnership countries – namely Ukraine, Moldova and Georgia – as a kind of zero-sum game in which either the EU or Russia would win, he said that there was no precedent for another country, Russia, becoming involved in such negotiations with a third country.

In the same way, he said the EU was not involved in the Customs Union accession negotiations between Russia with Kyrgyzstan and Armenia, and that this was normal.

It is “very difficult” to discuss issues when a zero-sum approach is applied, he insisted, but this was not the way the EU was seeing the process, he added.

Asked if an extraordinary meeting of foreign affairs ministers would be called, he said it was not excluded, but it was up to EU Foreign Affairs Chief Catherine Ashton to take the decision.

He also said that EU diplomats had information that former Prime Minister Tymoshenko, who is serving a jail sentence, would make a statement.

Speaking at the same event, Steven Blockmans, head of EU foreign policy at the Centre for European Policy Studies, a Brussels-based think tank, said that it appeared that “the whole idea of the Eastern partnership was going down the drain”.

On Sunday, the Ukrainian opposition is expected to organise a march in support of closer ties with the EU. 

Russian President Vladimir Putin's spokesman said today (21 November) that his country welcomed Kiyv's desire to improve trade ties with Moscow.

"We welcome the desire to improve and develop trade and economic cooperation," Putin's spokesman, Dmitry Peskov, told reporters, as quoted by Reuters. He called Ukraine a "close partner" and said Russia would respect any decision it made about the EU deal.

President Viktor Yanukovich, on a visit to Austria, declined comment after the government's statement. Earlier, he had told a news conference in Vienna: "Ukraine is continuing to move in the direction of European integration ... We are convinced that we have set off on the right path."

EU officials told Reuters that when Yanukovich met Enlargement and Neighbourhood Commissioner Štefan Füle on Tuesday, the Ukrainian leader had said he could not agree to the deal.

It would, he said, cost Kiev $500 billion in trade with Russia over the coming years, while implementing demands for Ukraine to adopt EU legal and other standards would cost another $104 billion.

Swedish Foreign Minister Carl Bildt, a veteran of east-west diplomacy, tweeted: "Ukraine government suddenly bows deeply to the Kremlin. Politics of brutal pressure evidently works."

"This is a disappointment not just for the EU but, we believe, for the people of Ukraine," EU foreign policy chief Catherine Ashton said in a statement.

“The reforms adopted over the last months have been far reaching. The signing of the most ambitious agreement the EU has ever offered to a partner country would have further enhanced the reform course of Ukraine and sent a clear signal to investors worldwide as well as to international financial institutions that Ukraine is serious about its modernisation pledge and becoming a predictable and reliable interlocutor for international markets. It would have provided a unique opportunity to reverse the recent discouraging trend of decreasing foreign direct investment in Ukraine and would have given momentum to negotiations on a new standby arrangement with the IMF.

“We believe that the future for Ukraine lies in a strong relationship with the EU and we stand firm in our commitment to the people of Ukraine who would have been the main beneficiaries of the agreement through the enhanced freedom and prosperity the agreement would have brought about," Ashton said.

Germany's foreign minister Guido Westerwelle said the European Union was keen still to improve ties with Ukraine but that it was up to Kiev to decide.

"Our interest in good relations with Ukraine is unbroken and our offer of a real partnership still stands," he said in a statement. "The ball is in Kiev's court. It is their sovereign right to decide on their path freely."

Ukrainian opposition leader Arseny Yatsenyuk, an ally of Tymoshenko, said that if Yanukovich failed to sign the deal with Europe would be "treason" and provide grounds for the president's impeachment.

The European Parliament envoys to Ukraine Pat Cox, former EP President and Aleksander Kwa?niewski, former President of Poland, published a statement, expressing “deep disappointment at the unilateral decision of the Ukrainian Government to postpone the signing of the Association Agreement with the European Union”.

“Having regard to President Yanukovych`s affirmation this afternoon in Vienna to continue along the path of European integration, we appeal to the President to underline this commitment by delivering on his promises concerning the reform of the public prosecutor`s office and on the law on medical treatment abroad of convicted persons.

“In this difficult situation we believe that the people of Ukraine should be reassured by the leaders of the European Union that the door will not be shut on the European hopes and aspirations of Ukraine. We commend to the European Union and particularly to President Schulz and the European Parliament, as the authors of this mission, by way of a duty of care to maintain active vigilance with regard to the conditions and treatment of Mrs Tymoshenko. Specific arrangements should be put in place to ensure this.

“There has been enormous effort made by the European Union to work with Ukraine over the last 18 months, not least by this mission. The time-out formula now decided by the Ukrainian authorities is not without clear downside risks, is likely to last for considerable time and the process, if and when renewed, will be complicated by the decision made today.

“The mission intends tomorrow morning to return to Verkhovna Rada and then travel to Kharkiv to meet with Mrs Tymoshenko,” the two envoys state.

Hannes Swoboda, president of the Socialists and Democrats Group in the European Parliament, said:

"At this time, one week before the Eastern Partnership summit in Vilnius, the future of EU-Ukraine relations remains very unclear. The individual case of Yulia Tymoshenko should not be allowed to jeopardise the far-reaching negotiations and potential improvements for the people of Ukraine. But today's parliamentary decision raises profound doubts about how serious the Ukraine's commitment to the EU really is.

"We deplore the pressure and blackmailing tactics that Russia has used against Ukraine, and other countries. It is equally deplorable that Ukraine seems to have given in to this pressure and appears to have chosen to diverge from its European path."

The US State Department published the following statement:

“The United States joins the European Union in its disappointment with the decision of the Government of Ukraine to delay preparations for signature of an Association Agreement and Deep and Comprehensive Free Trade Agreement with the EU. The EU has offered Ukraine an historic opportunity to cement a European future for its people and demonstrate to international financial institutions and investors its unwavering commitment to democratic reform.

“We stand with the vast majority of Ukrainians who want to see this future for their country, and we commend the EU for keeping the door open. The United States is convinced Ukraine’s integration with Europe is the surest course to economic prosperity and democracy.”

Poland, the country that pushed the hardest for Ukraine’s EU association, published the following statement of its foreign affairs ministry:

“Ukraine is a sovereign country and we respect its decision. However, we are disappointed that the process of bringing Ukraine closer to the European Union has been stopped by its government on the final straight.

“This decision may lead to its indefinite suspension and to irreversible losses in the process of modernisation, reform and democratisation that Ukraine needs so much today. There is a risk of losing what has been achieved as a result of long and difficult preparations to sign the Association Agreement.

“We remind that the final decision on whether to sign the Association Agreement with the EU will be taken by Ukraine’s Security Council and president.

“The Ukrainian authorities bear the exclusive responsibility for this decision. Poland and the European Union were prepared to make a far-reaching compromise.

“Poland will still support fostering good neighbourly relations with Ukraine and strengthening pro-European attitudes in the Ukrainian society.”

Alexander Okhrimenko, economist and BlogActiv blogger, sent EURACTIV the following comment:

“In view of the difficult economic situation caused by the trade conflict with Russia, it should not be expected that Ukraine would need to justify its actions.

“Entire branches of the Ukrainian economy turned out to be under threat. The concern has been obvious for a long time. However, it was persistently ignored by the EU side.

“The Ukrainian government took such a difficult step realizing the downside, but this step doesn’t change the country’s eurointegration orientation.

“Despite the sharp statements by euro officials, Ukraine’s leadership hopes to continue the dialogue and consultations with the EU. But the EU has to recognise that in many respects the suspension of the process of acquiring associate membership by Ukraine is caused by the Union's lack of interest to discuss financial compensations.

“Moreover, EU may have to realise that in this context, it will need to take into account the opinion of Russia as well.”

Russia, Kazakhstan and Belarus agreed to form a customs union in 1995, followed in 1999 by a pact to create a common economic space.

In 2007 the Commission of the Customs Union was created, which took over some powers previously held by national authorities. The union was launched in 2010, establishing common tariff and non-tariff regulations amongst the member states.

The common economic space entered into force in January 2012, with the creation of the Eurasian Economic Commission the next month.

The establishment of a Eurasian Economic Union is scheduled for 2015.

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