Edward Lucas: We win in a historical perspective,

The conference “Inside Ukraine: understanding investment risks and opportunities” recently took place in London. It was organized by the Foundation for Effective Governance and the British periodical The Economist, and attended by representatives of big international companies that work on the Ukrainian market as well as journalists, experts and politicians. Its goal was to assess the investment climate in Ukraine. The Day offers for your attention an interview with the deputy editor-in-chief of The Economist, an influential British newspaper, Edward LUCAS, who was the moderator of the conference.

In the post-Soviet space Lucas is best known as the author of the book The New Cold War: Putin’s Russia and the Threat to the West. Earlier this year the author himself presented the Ukrainian translation of his book in Kyiv. Like the British journalist Lancelot Lawton in the 1930s, Mr. Lucas today considers Ukraine to be the most important country for Europe’s future. He also warns that the flow of Russian dirty money threatens the West and its values.

On the photos from the meeting in Deauville in October we can see the smiling faces of Merkel, Sarkozy and Medvedev. They are shaking hands with each other. At this very meeting Sarkozy said that we are living in a new world. This is a world of friendship with Russia. In your book The New Cold War you warn Europe that it should cool down its enthusiasm towards Russia. Unfortunately, we cannot see this. How do you think Europe should protect its economy and policy from Russian influence?

“The main argument in my books has been vindicated by events — the war in Georgia showed that Europe is terribly divided, NATO is divided and the EU is divided. And they were unable to come to a common position on the Georgian war. And they are still unable to come to a common position on Russia in general. Perhaps the weakest point at the moment is France. When I wrote my book I was mainly worried about Germany, because of Schroeder, and I think he pushed Germany very much in a pro-Russian direction. I think Merkel has reined back on this. Merkel’s policy is now very balanced. She sees the importance of talking to Russia, but she is also aware that Germany does a lot more trade with the countries of Central Europe. Trade with Poland is three times bigger than trade with Russia. Trade with Russia is about the level of the trade with the Czech Republic. So the big push from German industry to the “Russia first” policy is over in Germany, and that’s good. And Merkel personally does not like Putin, she does not like chekists, she does not like communists, she does not like whole Soviet thing. I think the much bigger problem is France, because Sarkozy is very egocentric, very impetuous. He sees an idea and he goes for it; and he has, I think, decided that he wants to do deals with Russia. Russia understands this and they are playing him like a violin. And the Mistral sale [the sale of French assault ships to Russia. — Ed.] is absolutely atrocious, this is a weapon that can only be used by Russia to bully its neighbors, to intimidate its neighbors. These are assault ships that have no defensive role. It will be used in the Baltic Sea or the Black Sea against countries like the Baltic States or against countries like Georgia, possibly even Romania and Bulgaria. I find it astonishing that France can go ahead and sell these weapons. And that the French do not realize what they are being sucked into with Russia. So I’m not so much worried about Deauville and French-German relations. I think Germany’s balance now has a very positive influence. I’m very worried about France and very worried about Italy. We’ve seen from WikiLeaks how close Berlusconi really is to Putin. Now we have two of the most important countries in Europe basically taking the Russian side on things. And that’s terrible.”

My second question refers to the sphere of values. Sometimes Europe violates the values it preaches. In your book you wrote that Russia’s main weapon is Europe’s main weakness, namely money. What is Europe ready to oppose to these weapons? Europe is being demoralized. What new values can it find to base itself upon?

“I absolutely agree that Europe needs to vent both its democracy and its capitalism for the needs of the 21st century. And we were far too soft in the 1990s, assuming that the ideological challenge was over, and that we could therefore be very complacent and that was wrong. The crisis has shown how many weaknesses our system has. The financial system got out of control and blew up, and that was a weakness. We’re also wide open to corrupt money. We have seen the astonishing spectacle of dirty Russian money flooding into Western Europe. People say there is nothing we can do, and that’s got to change. I think that one of the good things that happened is that Russia’s energy weapon is less effective than it was. And people realize that Russia is an expensive and unreliable supplier of energy, and that with the energy connections to Russia comes corruption, and [that realization] is an improvement that has taken place in the last two or three years, since I wrote the book. I also think, and we see it from WikiLeaks, that behind the scenes officials are absolutely clear that Russia is a corrupt autocratic state and that corruption leaks into other countries. The problem is that the politicians are not acting on what the officials say. At least the American diplomats and the people talk to realize that.

“I think that the big test for Europe right now is how we deal with the case of Sergey Magnitsky, the Russian lawyer who was effectively tortured to death in prison. He was a lawyer who represented a big British investor, in fact the biggest British investor in Russia. And he uncovered a 230-million-dollar fraud against the Russian tax payer, perpetrated by the FSB and associated agencies. So this is a very clear case, much less morally ambiguous than Khodorkovsky or Litvinenko, where people say that he was one thing or really another. Magnitsky’s [case] is absolutely central, the big question is: are we going to impose a visa ban on the people who killed Magnitsky, people who benefited from the fraud that he uncovered? There are 60 named individuals in different bits of the FSB and the prison system, finance ministry and so on. America is getting ready to ban them from getting visas. So they, and probably even their family members, will never go to America. We should do the same in Europe. We should say that ‘you cannot get a Schengen visa,’ or if it is Britain, that they cannot get a British visa. And that would show that we are serious. And that is something I am working hard on at the moment.”

Recently you wrote in your article that Russia would become weaker and weaker, when you wrote about the forecasts for Europe for the next 10 years. You also said that Central Europe will reinforce its positions. What about Ukraine?

“Fifty-fifty. I think if things go right in Ukraine, Ukraine can follow Central Europe’s very good path of development. You have the huge advantage that you’re not crippled by the oil-and-gas industries. And this is Russia’s one of the greatest failures in the past 10 years, the failure to diversify and the corrupt rents in gas industry are keeping Russia back, it’s easier to steal than to grow. My worry is that In Ukraine you have a kind of bureaucratic rent, with the politicians sitting on top of bureaucracy and extracting money. In Central European countries the bureaucratic rents are smaller than the money you can make by doing honest, creative business. But I see Ukraine as really balanced [between the two possible roads]. You can go down the Russian road, what I call ‘zimbabwefication’ of Russia, where the elite uses ever more repressive measures to stay in power, keeping the country go more and more backward, getting bigger and bigger share of the smaller and smaller cake. Or Ukraine may move forward going down the European road. Four or five years ago I was more optimistic about Ukraine. Now I think it could go either way.”

In 1935 your colleague Lancelot Lawton, a British journalist, delivered a speech at the British Parliament, and blamed Europe for paying insufficient attention to Ukraine, which is very important for its geopolitical future. Yet the speech was in vain. Will they listen to you, what do you think?

“Well, I don’t know. I mean I think things are much more encouraging now. I’ve spent my life dealing with the countries between the Baltic and the Black seas. And for the first 10 years of my interest people said that it is both irrelevant and hopeless. I started off in 1980, organizing together with the Solidarity movement and the students involved in it. At that time we had Brezhnev in Kremlin, and the West seemed to be in a complete retreat, at least in the 1970s. So it was considered not irrelevant, but hopeless. Then there was the fall of the Berlin Wall. People said that it was nice, but it would be complicated to join the European Union, let alone NATO. These were strange backward places, full of mud and vodka, with hungry dogs and people in fur hats. There was a tremendous struggle to get the countries like the Baltic states, Poland, Czech Republic on the map. They finally got on map, but people said, yes, but are they really going to be democracies, are they really going to be prosperous, can we really see them as equals. The result is that now we see them as equals. Poland is now one of the few economies in Europe that is growing. I did a test the other day. In January there will be only one country in Europe, which is a member of the EU, NATO and the Eurozone, that meets the Maastricht criteria and spends nearly two percent of its GDP on defense. And that is not a West-European country, that’s Estonia. So Estonia, one of the post-Communist countries, which is small and supposedly obscure, is the only country in the whole of Europe which belongs to all important clubs and meets those clubs’ rules. That shows what a big change has taken place. I’m not sure that things are changing because people listened to me. But in the long historical scope we’ll win. We have sorted out Central Europe, we got the Baltic states into NATO, with the Western Balkans it’s absolutely clear that within 10 years all the Western Balkan countries will be either in the EU or close. And Russia I think is basically lost now. There’s no danger of putinism becoming a success. This was my great fear when Putin came to power — that he would become a sort of Deng Xiaoping of Russia, that he would make Russia into successful authoritarian capitalist country that could be a real challenge and alternative to the Euroatlantic orientation of the West, and he just has not done this. Putinism is a failure, and putinists have admitted that it is a failure. Though things are difficult, and I’m worried about Ukraine, I think in the broad sweep of history we are winning.”

Does Europe understand that by surrendering Ukraine, it can surrender itself in a sense? I know that Ukraine does not understand this either. But is this understanding present in Europe?

“Ukraine should do a much better job in getting itself known in Europe. It’s a real struggle. I think Europeans know more about Croatia than about Ukraine. We do not have foreign journalists based there. Ukrainian embassies are awful. Ukraine’s presence on the web is very bad. When we do have news it is about corruption and political shenanigans. The Orange Revolution put Ukraine on the map. And everyone said ‘Wow! This is a great big country, and there is this democratic upsurge. And it reminds us of 1989.’ But then it [disappeared] again. That was a chance to re-brand Ukraine, to put it on the European map. Sadly, it failed. And I blame not the people of Ukraine, but the leaders of the Orange Revolution. I blame Yushchenko and Tymoshenko — it was their responsibility and that of the people around them. Europe is widening, there is no doubt; people already know about Moldova, which used to be the most obscure and neglected country in Europe, and is now moving up. I was in the White House the other day, and the National Security Council led a really serious discussion about Moldova, and the awareness that Europe’s eastern neighborhood matters are unquestionable there. Although the Eastern Partnership has not worked as well as it should have, and there were many false starts and problems. People want to believe that Ukraine is going to be okay. It’s just that Ukraine is constantly providing evidence to the opposite. It just becomes yet another problem, and people put it on the side.”

We can see that Georgia is much more modern than Ukraine. In a way it has even become more European. What influence will it have on the region?

“Georgia is tremendously important. It’s the only free-market democracy on Russia’s southern fringe. When you leave the Latvian-Russian border and travel around the Russian border, the next place which is well-governed is Georgia, and after that you have to go to Japan. It is a small point of light. I don’t idealize Saakashvili. He has made some terrible mistakes. There is still a lot of corruption. It’s a weird high-level corruption. It does not impinge on people’s daily lives, but certain friends of his get access to certain businesses which they shouldn’t do. So I’m not saying at all that everything is perfect in Georgia. But I do think that what he’s done is getting the majority of the important reforms done. So you have a good business environment. And that’s tremendously important. You have a system that people can be proud of, people don’t feel embarrassed or ashamed. He allowed for the [growth of a] generation and a new political class. The opposition used to be a bunch of crazies, and now they have a responsible opposition, which is good. So I am a big fan of Georgia, but they should keep going and finish the job. The big problem is that the EU isn’t doing its bit. Georgia has done everything it was asked to do. And the EU is not giving them the visa-regime. So I think this again highlights the weakness of hypocrisy of the EU. How can we expect people to believe this is rules-based system when we have a country that obeys the rules and which does not get what it should. So I bang the drum a lot for Georgia. I want them to have a fair deal. I think if you do get it, it can have a very good effect. You can then say to the Moldovans or Belarusians: ‘Look, Saakashvili did it? You can do it.’ And this refers to Ukraine to. If we don’t treat Georgia fairly, it destroys our credibility in negotiations with everybody else.”

Whom do you consider your allies, especially among journalists and opinion-makers?

“Five years ago I felt lonelier. It was particularly in regards to bashing the Kremlin about the chekist regime in Russia. Everybody was saying: ‘get out of the way, shut up. We want to go make some money.’ And this idea that Putin was a dependable partner who was going to make Russia safe and predictable, and allow the West to make money, was very popular. So I used to get a lot of criticism, I felt lonely, and I wrote the book because I felt lonely. I think things have changed a lot. Most officials in most countries basically agree with me on Russia. I did not change my positions, so I think they have changed theirs. So this is good. Even in places like Germany. In the media it is much easier to get the message across. I am constantly being called by the BBC and others, whereas five years ago this was considered crazy-talk. So I see a lot of allies, in the media, officialdom. What I’m missing is really tough political support. Five years ago the good thing was that you could count on the Lithuanians, the Poles, the Romanians, the Estonians... There was a bunch of tough countries who said we have nothing to lose here. We really minded about Georgia, we really minded about democracy. In what concerns the Magnitsky case, which I mentioned, nobody wants to be the first country, to take the lead. In America the republicans may push for the ban, but Obama wants his reset. Radek Sikorski wants to have normal relations with Russia. Estonia, Latvia and Lithuania say, ‘Yes, we agree with you, but can we just not be in the frontline please? We will be really happy in the second place.’ Britain does not want to do anything. Germany says they will go with the all-European consensus. But it does not want to be in the front. So that is what we are really missing. What I need is someone like Lech Kaczynski was, someone who could really pick this up and say ‘Yes, I agree with you. And I can shout even louder from a political point of view.’ I’m still waiting for that.”

The Day expresses gratitude to the Effective Management Foundation for assisting to arrange the interview