Brother-3: a strangling embrace

We have been given a palliative, not a cure. This is how we can characterize on the whole the latest events in the attempt to modernize this country. In other words, we have stepped on the “European brake” and rushed into the “Russian embrace.” The news from Moscow on the signing of a series of bilateral agreements, including those on a new gas price of 268.5 dollars per 1,000 cu. m. and a 15-billion-dollar loan, has triggered a heated debate in Ukraine on a foreign-policy U-turn and economic consequences for this country. Here are five conclusions.

Firstly, the public and experts do not know so far the details of the Moscow agreements. The government is meting out information, while journalists often cite their own sources. “It is a unique situation, when the Russian-Ukrainian Intergovernmental Commission is in session, but the delegation that represents Ukraine submits no draft documents to Verkhovna Rada committees,” Fatherland MP Pavlo Petrenko says to The Day. “Even the proper governmental ministry has not seen any. These things are causing alarm and mean that some secret accords are being negotiated and signed.” So it is difficult to fully analyze the consequences of the signed agreements. Backstage meetings and the resulting agreements (Sochi-Moscow-Sochi-Moscow) have become a tradition in Russian-Ukrainian relations, particularly in the past few years. Why? Because it is often the question of not national interests but of the personal and corporate problems of some individuals and financial-political groups.

Secondly, the Kremlin treaty itself. Naturally, the government calls it victory. “We know from the president’s speech that the signing of documents with Russia will allow the budget to provide for increased pensions, wages, grants, and social payments,” Party of Regions MP Volodymyr Oliinyk comments. “We are boosting, rather not stopping, this process. There are ample grounds for this today. We have every reason to say that the treaty we have signed will surely promote economic growth in 2014.”

The opposition and most experts have a different opinion.

“We are in fact ceding a part of our sovereignty to our northern neighbor. It is inadmissible,” Petrenko says.

“Putin had waited for the Ukrainian economy to fully collapse under the Party of Regions rule and then made ‘irrefutable proposals,’ i.e., conditions for Ukraine’s subjugation to Russia,” independent MP Oles Donii says in Facebook.

“It is clear that President Viktor Yanukovych and the Cabinet have in fact signed an act of surrender that provides for certain conditions which make it possible to use Russian tactical financial support to retain power until 2015. But, strategically, they have sold out Ukraine’s interests for many years ahead,” expert Valerii Chaly told www.unian.ua.

To sign an agreement with Russia, not with Europe, means to conserve the current state of affairs and renounce modernization of which the Party of Regions has been talking so much. Yes, some business will start working, but this will result in further dependence on and deeper cooperation with Russia rather than in the diversification and reset of the economy. In this case, it is a victory of tactics, not strategy.

Thirdly, by choosing to sign a treaty with Russia, Yanukovych is trying to solve not only economic or financial problems. The secrecy of all the meetings and agreements shows that he was also addressing the problem of his political future – mainly, being reelected as president. It is President Kuchma who established the tradition of seeking Moscow’s protection in the Ukrainian elections – in 1994 he went to Yeltsin for money and received support from the do-called big brother. Yanukovych is continuing this tradition. Meanwhile, he wants to solve some tactical problems. Euromaidan is in full swing. There will inevitably be some portfolio redistributions. The president aims to reshuffle Cabinet and governor cards in a way that will benefit him as much as possible, keep the balance of his inner-circle political groups, and, of course, try to appease the protesters.

Fourthly, negotiations with the European Union on signing the Association and Free Trade Area Agreement seem to be going on, but its future is blurred. The EU has repeatedly emphasized lately that, if Ukraine is willing and prepared, it can sign the agreement at any moment. Instead, Kyiv is sending contradictory signals: on the one hand, the government is saying that the EU agreement, which they initialed themselves, is not quite in line with Ukrainian interests, but, on the other hand, it is emphasized that we continue to conduct negotiations and want to sign the agreement. But only an initialed document can be signed. Nevertheless, the latest statement of German Chancellor Angela Merkel is positive: “The proposal about signing the agreement remains in the negotiating table.”

Fifthly, what is going to happen to Euromaidan after the latest events? Even though there is no united center of influence, the protesters are ready to hold out – they even reinforced barricades on Independence Square the other day. After all, this is right because none of the protesters’ demands has in fact been met. Many of the people detained during the previous rallies still remain behind bars. No punishment was meted out to those who sanctioned the dispersal of Maidan on November 30 (only three second-echelon politicians, who could not possibly have ordered the dispersal, were blamed), and no judgment was passed on riot police actions on December 1 near the Presidential Administration, where experts say there were provocations that smacked of foreign interference. The Azarov government is still in office. The leadership has made it clear that it can reshuffle the Cabinet but the current premier will remain in his seat.

Meanwhile, the opposition does not look convincing. Unless the authorities give some cause, the opposition will be unable to offer anything to keep Euromaidan afloat. The oppositionists’ actions in parliament are also weak. They are periodically trying to block the Verkhovna Rada’s podium. So what? In this case, they constantly break the 30-day period after which the president is authorized to dissolve parliament. Blocking the podium is only used as a way to bargain with the authorities. There is no success, either, in the attempts to reformat the majority, while the chance to dismiss the Cabinet has already been missed. Therefore, it is not clear how the opposition will go out of its Maidan rhetoric and, what is more, how it will utilize the energy of people.

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“If you look on what is going on in Moscow as a chess game, our beloved president seems to be the most adequate player,” says blogger Oleksii Arestovych, author of the Warm Ocean Strategy. Indeed, “they gave the money and slashed the price,” “factories will work again,” “election guarantees were given,” “no blood was shed,” “he didn’t ditch his team,” “Yulia is doing time,” and “Ukraine remains in his hands: neither Europe nor Putin took it.”

“Putin has failed to understand in ten years who and what he’s been dealing with (and will perhaps never do due to his bureaucratic mindset), but the States… Even McCain has already flushed the water. And we still dislike our president after all this?” the blogger concludes sarcastically.

If it only were so… But, unfortunately, the situation seems to be radically different. It is Yanukovych who does not fully understand who or, to be more exact, “what” he is dealing with. It is about both the internal and the external side of the matter. Ukraine has been approaching this surrender in the past 15 years. This is in fact what the Den/The Day editor-in-chief means in her article “On Unapparent Things” (The Day, December 17, 2013: “Indeed, since 1999 Ukraine has been rocked by grave crises. This has been a period of constant turbulence. Scandals, arrests, oligarchic wrangles, one prime minister is in the American prison, another is behind bars here in Ukraine, many of our ministers have fled to other countries. This indicates that our country is an unhealthy organism.

“But today it is finally clear: it is Yanukovych who began to break the dead-end branch of a regime once referred to as ‘Kuchmism…’”

Yes, of course, the Ukrainian leadership has obtained a “breathing space” in Moscow. Will it be able to use it to regroup forces and create incentives for the domestic market? It is highly questionable. “If they had known how, they could have done so a long time ago,” Den’s editor-in-chief says. But the main thing is that, as Larysa Ivshyna notes, we are in for severe ordeals. “I do not mean a clampdown on society. It is, first of all, about economic turbulence. How can the government spend these 15 billion to achieve an effect that would serve national interests?” Ms. Ivshyna asks and points out that it would be a good idea not to renounce integration into Europe after taking the Russian money – it must be used to bring Ukraine into line with Western standards. “Will the West accept this? Will society understand this? It is also an open question,” Den’s editor-in-chief says.

And, so far, it is obvious that Russia has her own idea of the Moscow accords, which we think can be described as a script for Brother-3: a Strangling Embrace. Firstly, guaranteeing orders for our mechanical engineering, steelmaking, and aerospace businesses, Russia is practically freezing our backwardness: guaranteed orders mean that there will be no need to seek alternative sales markets and, hence, modernize the industry and update technologies. Secondly, these accords will further tighten the debt noose around the Ukrainian economy’s neck – plus 15 billion to the overall public debt. And, thirdly, as Sergei Markov, Pro-Rector of the Russian Plekhanov Economic University, director of the Political Research Institute, told Moscow Echo Radio, Putin has also contrived to put on a funny show. “The Russian-Ukrainian treaty includes a crude joke from Putin. Russia is taking 15 billion dollars from the EU and the US. Putin says that this money will be taken not from the Russian budget but from the National Wellbeing Fund, and this fund is placed in US and EU securities. This means the money will be taken from there,” Markov explains. “This means Ukraine will borrow 15 billion dollars at the expense of those who was whipping up, together with the EU and the US, this crazy anti-Russian hysteria in Kyiv. A crude joke, in Putin’s style. In other words, one who feels hurt may step aside and cry.” Incidentally, Mr. Markov closes his “rapturous” comment with a naive observation: nobody knows whether Russia herself will finally benefit from these agreements. He claims that Putin has fraternally “saved” Ukraine, “as was the case in the 17th century,” but he derived no benefit in addition to the “joy” of upstaging the West. Mr. Markov is acting against his conscience. If he, an economic university pro-rector, does not know, we invite him to read comments of his Ukrainian colleagues, especially those about the Black Sea Fleet.