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7 October, 2013 12:56   ▪  

The Economist: Ukraine is the most valuable prize left for the EU in Eastern Europe

Signing of the Association Agreement with Ukraine could be as critical for the region as the decision in the 1990s to admit the ex-communist countries of central Europe to the EU, The Economist admits.

“Ukraine has long been on the edge between east and west,” The Economist says.  By signing an association agreement with the European Union next month this country of 46m people is poised to tilt westward. However, there is one important factor – Putins pressure on Ukraine. “The Russian sales pitch is simple. Russia remains the single biggest market for Ukrainian exports,” The Economist explained.

As it admitted in the article “Ukraine would gain far more from going west. Trade is shifting to what is, in overall terms, a much bigger and richer market than the Eurasian union could ever be. The EU has a well-tried formula for helping to reform and liberalise economies from the former Soviet block. Even Ukrainian oligarchs close to MrYanukovychrecognise that more competition from the EU will help them modernise their companies. In the future, an association agreement could even be a precursor to eventual EU membership”. But what is pushing the Ukrainians towards the EU now is not all this. It is Russian bullying.

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“When Armenia was pushed around by Russia, it caved and decided to join the Eurasian union. But the response in Georgia and Moldova has been to move closer to the EU. Similarly, in Ukraine, polls show that support for the association agreement has risen to over 50%”, - The Economist says.

“But Russia’s stance has also injected geopolitics into the debate. Some Europeans argue that, to head off any risk of losing Ukraine to Mr Putin, the EU should relax its conditions for the association agreement”, but The Economist urges that it  would be a mistake. “The EU’s pressure has been working. Ukraine may still be a corrupt oligarchy, but it has been making reforms demanded by Brussels,” it admits.  

“More generally, the value and appeal of an association agreement lies precisely in the conditions it sets for liberalisation and reform: to soften these for one special case would weaken them for all. The EU would keep leverage even after an association agreement is signed. Brussels hopes to implement its free-trade elements immediately, but it needs ratification by national parliaments to come fully into force; that process will probably last until beyond the next Ukrainian presidential election in early 2015,” The Economist says.

“If Russia sticks to its threats, Ukraine will also need financial assistance from the Europeans to see it through the winter. It should get it. The EU could also ease its visa regime and help more students go west. To both sides, Ukraine is the most valuable prize left in eastern Europe. Indeed, this moment could be as critical for the region as the decision in the 1990s to admit the ex-communist countries of central Europe to the EU. Fortunately, thanks to Mr Putin’s inept bullying, the prize should now fall into Europe’s lap”, - The Economist claims.

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