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DECEMBER 5, 2013

LEAVING THE EU AT THE ALTAR: UKRAINE AND THE FUTURE OF THE EASTERN PARTNERSHIP by Joshua Stanton Thousands of Ukrainians have since last week packed the streets of Kyiv, waved EU flags and chanted “Ukraine is Europe!” November 28-29 were to be the days on which Ukraine would finally sign a long-negotiated Association Agreement (AA) and a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU. Beyond transforming Ukraine’s political, institutional and economic future, the accords were to be the crowning achievements of the Eastern Partnership (EaP), an EU initiative that has sought to build more integral relations between the EU and its eastern periphery. But to those gathered in Kyiv’s Independence Square, the chants and slogans were hardly celebratory. Protestors are demanding the resignation of Ukrainian President Viktor Yanukovych, whose eleventh-hour decision to back out of the signing of the AA/DCFTA at a EaP summit in Vilnius, Lithuania has touched off a political firestorm. Ukraine’s failure to sign the agreements also raises questions about the future of the EaP, which since its inception has struggled to produce results. A Herculean Effort While scorn over the failure to sign the AA/DCFTA has landed squarely at Yanukovych’s feet, getting his signature was always going to be difficult despite his repeated assurances that Ukraine’s “future lay in Europe”. The agreement would over time fundamentally transform a system of government rampant with corruption and arbitrary justice from which Yanukovych has benefitted. The release of jailed opposition leader Yulia Tymoshenko, an EU precondition for signature, was also politically untenable. Yanukovych is keenly aware that Tymoshenko, if released, could pose a threat to his chances for re-election in 2015.

Yanukovych also faces a dire economic situation. With its public debt exceeding 40 percent of GDP, Ukraine needs €13 billion just to cover gas and debt repayments in 2014, and Yanukovych has stated that Ukraine would need at least €20 billion a year to meet “European standards”. Russian trade protectionism has hammered Ukraine’s manufacturing sector, much of which is located in the eastern half of the country. With Kremlin threats of further sanctions if he signed the EU deal, Yanukovych would also likely lose support throughout much of that Russianspeaking region, his main base of political support that is vital to the survival of his political party, the Party of Regions. Russia, which takes in 22 percent of Ukrainian exports, has made little effort to hide its intentions. Ukraine lies at the center of the Kremlin’s plans for its own trade bloc, the Eurasian Customs Union (ECU), which is meant to become an EU-style “Eurasian Union” by 2015. While Moscow has touted the political and economic benefits of membership, it has also issued stern warnings to Yanukovych and other states in the region: Aligning with the EU would be “trade suicide”. Critics have therefore charged that the ECU would be used as a tool to re-assert Russian dominance over Ukraine. Now What? The controversy over Ukraine has muddled the future of the EaP, which since 2009 has governed relations between the EU and six eastern states: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The EaP was designed to strengthen political and economic ties while encouraging those states to implement important reforms under “Action Plans” proposed under the European Neighborhood Policy (ENP). While not extending membership, the EU nonetheless offered significant carrots for such reforms: AAs, access to the EU internal market via DCFTAs, and eased visa procedures. Nearly five years onward, however, the EaP has had limited success. None of the six countries has fully signed and implemented an AA or DCFTA, although Georgia and Moldova initialed agreements at the Vilnius summit. In Transparency International’s latest Corruption Perceptions Index, only one of the six ranks in the top third (Georgia; 55th), while half rank worse than Sierra Leone (119th). Azerbaijan and Belarus have seen significant democratic backsliding; their governments have cracked down on opposition groups and conducted elections widely seen as fraudulent. Even Armenia, which until recently looked certain to pursue an AA with the EU, abruptly reversed course, announcing in September that it would abandon four years of negotiations in favor of closer relations with Russia. The lack of tangible progress within the EaP points to one conclusion: AAs and DCFTAs, while beneficial, are insufficient to entice countries to undertake significant reform. Without the promise of EU membership, incentive is lacking, and the tug of war between Western integration and closer relations with Russia continues. The time is therefore ripe for the EU to re-examine the EaP and make it less about checking off technical boxes and more about achieving serious political results. Making EU membership part of long-term EaP benefits would make Brussels more attractive as a model to emulate and as a community to join. EU expansion also means reopening among member states the contentious issue of enlargement and the meaning of being European. Still, a more assertive and results-minded EaP strategy may be the catalyst the EU needs to drive real change on its eastern periphery.

Josh Stanton is Transatlantic Relations Project Manager at the Washington, DC-based Bertelsmann Foundation. ABOUT THE BERTELSMANN FOUNDATION The Bertelsmann Foundation is a private, non-partisan operating foundation, working to promote and strengthen transAtlantic cooperation. Serving as a platform for open dialogue among key stakeholders, the foundation develops practical policy recommendations on issues central to successful development on both sides of the ocean. ©Copyright 2013, Bertelsmann Foundation. All rights reserved. 1101 New York Avenue, NW, Suite 901 • Washington, DC 20005 USA • Tel: +1.202.384.1980

B|Brief - Leaving The EU at the Altar: Ukraine and the Future of the Eastern Partnership  

In this Bertelsmann Foundation B|Brief, Transatlantic Relations Project Manager Joshua Stanton writes that a pathway to EU membership is key...

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