UKRAINE: A MISSED OPPORTUNITY FOR THE EU

The EU was overconfident about its soft power and both unwilling and unable to play by the rules of the region, where money rules the day. Brussels' soft power simply could not compete with Moscow's hard alternative.

The EU offered Ukraine cooperation, free trade and financial contributions in exchange for democratic reforms. Officials in Brussels spoke enthusiastically about the emergence of an historic Eastern European policy. The planned Association Agreement was intended to facilitate visa-free travel, reduce tariffs and introduce European norms. The EU's other goal, even though it was not as openly expressed, was to limit Russia's influence and define how far Europe extends into the east. For Russia, the struggle to win over Ukraine was not only about maintaining its geopolitical influence, but having control over a region that was the nucleus of the Russian empire a millenium ago. The word Ukraine translates as "border country" and many feel that the capital Kiev is the mother of all Russian cities.

This helped create Cold War-style grappling between Moscow and Brussels. Moscow was ready for trilateral talks with Kiev and Brussels on the consequences of the Association Agreement between Ukraine and the EU and to explore ways to deepen mutual ties. However, EU leaders said that they was no need for a trilateral agreement but for a bilateral deal.

Financial incentives were also lacking. In the end Russia promised Ukraine several billion euros in the form of subisidies, debt forgiveness and duty-free imports. The EU, for its part, had offered Ukraine loans worth € 610 million, which it had increased as the last moment, along with the vague prospect of a € 1 billion loan from the International Monetary Fund (IMF). The EU was banking on its radiant appeal, and on its great promise of prosperity, freedom and democracy, but now Brussels must confront the fact that, for the first time, an attempt at rapprochement was rebuffed because the price was wrong.

Moscow benefited from the EU's confused efforts in securing a deal with Ukraine, but it is important to understand that Russia had significant leverage over Ukraine that made such a deal unlikely because Moscow was prepared to block it. Russia was actively opposing the deal, but the EU was half-pushing Ukraine back towards Moscow with its conditions. It would be more accurate to call this a missed opportunity for the EU. The opportunity was missed because most European governments aren't nearly as interested in pulling Ukraine into their orbit as Moscow is interested in keeping things as they are, and because of that, the EU wasn't able to give Ukraine enough incentives to agree.

Note:

No agreements on Ukraine's accession to the Belarusian-Kazakh-Russian Customs Union will be signed during a session of the Russian-Ukrainian interstate commission on December 17. The agenda includes a broad range of issues primarily pertaining to trade and economic cooperation. The objective is to preserve, expand, and deepen broader economic cooperation between Russia and Ukraine.