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22 November, 2013  ▪  Oles Oleksiyenko

The President’s Slow Freefall

The latest developments make the prospects of signing the Association Agreement very vague. What can Europe do with Ukraine after 28/11?

President Yanukovych acts like someone who has jumped off the airplane but hasn’t pulled the parachute open yet, enjoying the bursts of adrenaline as he falls. The entire country is waiting for the parachute to open and for the head of state to finally land somewhere. As we watch the freefall, we miss one thing: it may now be too late to open the parachute. Yanukovych has outwitted himself.

All Ukrainians talk about is that the President is preparing to disrupt the Association Agreement, and blame it all on the EU or the opposition.

On the one hand, it is obvious that some in Yanukovych’s circle are fueling his phobias about Tymoshenko and the prospects of her release. They keep telling him that the Association Agreement can still be signed even if she remains behind bars. On the other hand, the release of Tymoshehnko is an undeniable priority for some politicians in the EU. Yanukovych’s stubbornness is growing pricier for Ukraine. We are just a step away from one of the 28 member-states recognizing the issue with Tymoshenko unresolved – and the Association Agreement not signed.

Meanwhile, the member-states that promote Ukraine’s accession, including Poland and Lithuania first and foremost, have faced increasing trade, economic and energy pressure from Russia. This is supposed to make them less persistent in promoting a positive outcome of the Vilnius Summit. While Kyiv and Brussels struggle to come to terms, the Kremlin is benefitting from the conflict.

That said, those in power keep pretending to focus on Europe and prepare to implement the Agreement. On November 12, the Ministry of Economic Development and Trade disclosed a programme of the Association Agreement implementation with 552 items.

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The working group in charge of preparing a common bill to solve the Tymoshenko issue failed to reach an agreement on November 12. Subsequently, the November 13 vote in parliament was failed, and the bill did not get on the agenda the next week. The official excuse of those in power was that they did not find a mechanism to bring the inmate treated abroad back to prison in Ukraine in the bill, and the provision whereby the duration of treatment qualifies as part of the served sentence was not what they wanted.

The EU’s reaction to the failed vote came on the same day, and it was harsh. The Foreign Affairs Committee’s Jacek Saryusz-Wolski described it as a clear signal of the lack of political will of Ukrainian authorities to sign the Association Agreement with the EU. He noted that the Agreement might not be signed at all, if it is not signed on November 29 in Vilnius.

Some in the opposition called on their allies to support any bills on treatment abroad just to remove barriers to the signing of the Association Agreement. They asked the Cox-Kwasniewski mission to “not close the door for Ukraine” and deliver an interim report, not the final one, to “give time for Yanukovych to wake up”. The Party of Regions speaking through the head of their faction in parliament, Oleksandr Yefremov, also promised to vote for the bill on Tymoshenko provided that it meets their vision. Aleksander Kwasniewski said at a joint briefing following negotiations in the parliament that they still hope to see sufficient will. However, these statements did not sound too convincing.

The point of no return is very close. On November 8, the President signed the scandalous tax amendment that could prevent Vitaliy Klitscko as the most popular opposition candidate from running in the 2015 presidential election. Then, a new criminal case was launched against Tymoshenko’s lawyer Serhiy Vlasenko. Eventually, the parliament failed to vote for any European integration laws, other than the one on the election, on Thursday, November 21, although many expected the Tymoshenko bills to be considered first thing in the morning on that day. The final blow came when the Cabinet of Ministers issued Decree No 905-p dated November 21 suspending preparations for the signing of the Association Agreement and entailing that they can only resume with Russia’s participation. The decree was aimed at “taking measures to ensure national security of Ukraine, more detailed analysis and work on the complex of measures necessary to renew the lost amount of output and sectors of trade and economic relations with the Russian Federation and other CIS countries, the establishment of the relevant level of the domestic market that could ensure parity relations between Ukraine and EU member-states, which is the basic principle of international law and the basis of a state’s economic security.” This triggered protests in Kyiv and other cities of Ukraine on Thursday night. These are scheduled to continue on November 22 and 24. 

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The rhetoric of Yanukovych and other Party of Regions members shows that they probably think of the present status quo as a signal that they are now serious players in the world. These hopes show in statements from Oleksandr Yefremov who expressed the following complaints about the EU: firstly, they did not reach an agreement on financial support Ukraine would get if the Association Agreement is signed. Secondly, there is no guarantee that the Agreement will be signed if Ukraine fulfills all conditions. Premier Azarov keeps reminding the EU of EUR 150-160bn it has to give Ukraine to adjust its economy to European standards. Also, he complains about the EU’s reluctance to compensate Ukraine for the potential loss of its Russian markets. “We have offered our European partners to help us replace our exports markets first and foremost at our meetings,” he said. “Unfortunately, the EU does not operate as quickly as we wish it did.”  Another thing those in power complain about is burdensome and unsure prospects of obtaining loans which they would like the EU to grant Ukraine right after the Association Agreement is signed.

Meanwhile, Ukraine’s top officials speak openly that arrangements with the EU will even define parameters of the state budget for the year to come. “A lot will depend on what will happen on November 29. We will then know the situation and will integrate the necessary figures into the budget,” First Vice Premier Serhiy Arbuzov said at the parliament coordination council on November 18.

According to The Ukrainian Week’s sources, the leaders of the EU and some EU member-states have lately intensified telephone consultations with the Ukrainian government. Among other things, the latter insists that the Association Agreement should be linked to the IMF’s loans. That should come without what Ukrainian officials view as “excessive” demands to liberalize hryvnia exchange rate and increase gas prices for households.

MEP and Co-Chair of the Polish-Ukrainian Partnership Forum Pawel Zalewski has recently stated that the EU should change its stance on Ukraine and develop a plan of financial support. “If Yanukovych signs the Association Agreement without guarantees to arrange for the funding from the IMF or the EU, he puts his country at risk of hug losses,” Mr. Zalewski believes. “The EU should prepare a specific plan of assistance urgently.” 

Overall, however, Europe is unyielding. According to a statement made at the Foreign Affairs Council meeting in Brussels on November 18, the EU is willing to wait until November 28-29 when the Vilnius Summit will take place, but Ukraine has to fulfill all conditions necessary for the signing. Meanwhile, Russia is increasing pressure on Ukraine and other Eastern Partnership states. Despite the 25% shrink of trade between Ukraine and Russia in the past year, the Kremlin continues yet another customs war. As a result, trucks are stuck in long lines on the border while Russia demonstratively refuses to comply with the Readmission Agreement.

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It looks like the Ukrainian government is only interested in financial bonuses the Association Agreement would open door to, not European integration or adjustment to European standards. Therefore, Yanukovych seems to have little concern over blackmail that the Agreement may not be signed in the end. Meanwhile, the West could use the financial aspect to push Ukraine’s President to sign it and comply with its conditions afterwards. If it signed the Association Agreement but did not unblock European and IMF aid funds until Tymoshenko is released, the EU would only reinforce its position. Kyiv will definitely be interested in getting the cash as soon as possible.

The EU also has a way to effectively respond to the cynicism of Ukrainian authorities in persecution of the local opposition leaders. They put Tymoshenko in jail for tax evasion – the EU and the U.S. may launch investigations of money laundering by Ukraine’s top officials and people close to them who are now involved in sabotaging the fulfillment of the EU’s requirements. This will make them much more willing to seek compromise, plus Ukraine will already be associated with the EU. And this will give the EU more opportunities to influence Ukraine’s policies than in case of a failed Vilnius Summit. Under the latter scenario, Ukraine will be left in Russia’s shadow.

After this entire Association Agreement circus, the current President will look weak in all eyes. If the Association Agreement is not signed in the end, the EU and the U.S. will probably have to support opposition candidates in the 2015 election more actively, with no formalities tying their hands. Yanukovych's parachute may fail to get him to the ground safe.

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