The news narrative on Europe generally focuses on its sclerotic economies, unsustainable budget deficits and unstable currency. But Europe’s malaise is still preferable to closer ties to Russia for millions of Ukrainians, including thousands encamped in Kiev in a protest that has become just the latest global flashpoint testing the Obama administration.
The United States and the European Union have a direct stake in the outcome and should be more engaged, diplomatically and economically, in order to help prevent violence and motivate Ukraine to integrate into the E.U.
That was expected to have happened by now. But Ukrainian President Viktor Yanukovych made a last-minute decision not to sign an E.U. Association Agreement. Instead, bowing to pressure from Russian President Vladimir Putin, Yanukovych signaled his intent to align with the Russian-oriented Eurasian Customs Union.
Putin’s tough tactics included threatening a rise in natural gas prices and restricting exports. Either would hurt everyday Ukrainians, as well as some oligarchs who back Yanukovych.
Aligning with Putin may also help Ukraine avoid a potential debt default early next year. The country needs to secure up to $18 billion in financing, and while the International Monetary Fund has crafted a funding agreement, it comes with politically difficult, but economically necessary, reforms.
The European Union and the United States have limited ability to significantly alter terms of the proposed IMF bailout. But they could offer other ways to help Ukraine get through a tough transition. Some of this is short-term, and includes direct aid. Most important, the West needs to convince Yanukovych that the best method to get Ukraine out of its perpetual economic (and thus political) dysfunction is to link its economy to the E.U.
The battle between the E.U. and Russia seems to play out as a reheating of the Cold War. While there are elements of the old rivalries, there is a fundamentally different dynamic at play.
For one, it’s more about Kiev than about Moscow, Washington or Brussels. Ukraine has seen a succession of political pendulum shifts as one reprisal government replaces another. Yanukovych himself tried to steal an election in 2004 but was thwarted by the “Orange Revolution.” Unfortunately, one of the only constants is corruption and economic mismanagement.
This mismanagement means that Yanukovych’s choice, however unwise, is driven mostly by economics, not geopolitics. But this doesn’t mean that the stakes aren’t high. Unless Yanukovych yields to protesters and reverses course, Putin will likely be emboldened to further pressure Eastern European nations to realign with Moscow.
To avoid such an outcome, the E.U. and the United States should send a clear and unequivocal message that they expect a peaceful resolution to the protests, and that the government cannot repeat the violent crackdown it attempted in late November. If Yanukovych’s government does resort to force, there should be significant economic consequences, including sanctions that directly target the elites supporting Yanukovych. Additionally, the E.U. should emphasize that the existing advantages would be enhanced under the planned E.U.-U.S. trade pact.
President Obama needs to prioritize Ukraine. State Department envoy Victoria Nuland was dispatched, and Vice President Joe Biden phoned Yanukovych. But they’re playing catch-up to Putin’s direct involvement.
Obama is distracted domestically, and he’s focused on the Mideast at a time when the administration has signaled a “pivot” to Asia. But solutions to those vexing issues will usually involve, if not depend on, Russia. Sending the wrong signal to Putin may invite more meddling in Eastern Europe and more challenges on key international issues.
Millions of Ukrainians are risking much to tie their futures to the West. The United States and E.U. should aggressively act to diplomatically defuse the immediate crisis and coax Yanukovych to choose the right long-term alignment.