Ukraine voted – now what?

A view from Central Europe

Wojciech Konończuk, Jana Kobzová, and András Rácz
17 November 2014

While the Western media interpret the results of the Ukraine parliamentary elections as a clear victory of pro-European voices, few experts dare to show too much optimism. The new government will indeed be able to function with stronger legitimacy, but its ability and commitment to move forward with the much needed reforms remains to be seen. EU’s ability to make fast, resolute decisions and to predict Russia’s actions will be crucial in its efforts to stabilize Ukraine.

Therefore, in the latest installment of the “A View from Central Europe” series, CEPI asked three regional experts to identify the most pressing challenges that await the new government of Ukraine, delineate actions that can be expected in the foreseeable future from Russia, and recommend what the EU – and the V4 in particular – should do to assist Ukraine.

 

Wojciech Konończuk, Head of Department for Ukraine, Belarus and Moldova, Centre for Eastern Studies (OSW).

The new government of Ukraine will face unprecedented amount of challenges, including temporarily frozen conflict in Donbass, revisionist policy of Russia, economic crisis, a lack of gas, possible social tensions and a few others. In the short run, the government, most probably headed again by Arseniy Yatsenyuk, will have to deal with gas shortage and deepening crisis of the Ukrainian economy. Another crucial issue will be to maintain the unity of the pro-reform and pro-European forces, which are expected to form a new coalition. Due to the strong pressure from the society, which expects (or rather demands) quick changes the government will be forced to implement reforms. However, the question is what quality these reforms will be? Ukraine does not need imitation of modernization but deep, systemic changes in all crucial spheres of the state activity.

The recent months’ events demonstrate how serious the situation still is. The Russian goal was neither control over Crimea nor Donbas, but rather to regain control over the whole country. In the last two months Russia’s strategy has changed and it is now more focused on economic and gas instruments rather than military. Moscow proceeds with its policy but wants to minimize the costs of its “Ukrainian operation”, including Western sanctions, which are harmful for Russian economy. At the moment Russia uses rather its diplomacy, hoping that negotiations with a participation of the EU will help to achieve some of the Russian goals. The gas talks are an example.

Without doubt, Ukraine needs comprehensive aid from the EU, and it needs it in many fields. First, the EU should increase its political support for Kyiv in the ongoing conflict with Russia. The most current issue with potentially far-reaching consequences for Ukraine and the EU is lack of the Russian gas supply. Second, Ukraine needs expert and technical support in maintaining economic reforms as well as financial, which should help to – at least partially – offset painful reforms. It seems that the IMF package accepted this spring will not be sufficient and Kyiv will need an additional loan. The V4 countries can deal with its transformation experiences (successes and failures). Poland can contribute with its successful local self-government reform, which is always considered as one of the most necessary in Ukraine. The task for Warsaw should be also to keep the Ukraine issue on the EU agenda. In the context of creeping Ukraine fatigue, this is not so obvious.

 

Jana Kobzová, Associate Policy Fellow at European Council on Foreign Relations (ECFR) and Associate Fellow at Central European Policy Institute (CEPI).

Ukraine’s early parliamentary elections of 26 October were one of the key demands of the Maidan movement – they were seen as an opportunity to reinvigorate Ukraine’s political elite (a number of civil activists competed in the elections) and establish a pro-reform majority in the parliament, which was missing in the previous Verkhovna Rada. The outcome of the elections draws clear lines between the government majority and the opposition, which were non-existent in the previous parliament, and responsibility on the future ruling coalition.

Despite all the media hype about the victory of “pro-European” or “pro-reform” parties, most Ukrainians worry about three key challenges: 1) the ability of the new government to address security challenges in the east; 2) to stabilize the economic situation; and 3) to decisively deal with rampant corruption.

Moscow is determined to keep up the pressure, not just on Ukraine (eastern provinces are scheduled to hold their own “elections” this weekend) but also on the EU, as recent proposals by the Russian state company Rosneft on further sanctions towards Europe suggest. Despite the fact that the Russian economy is already struggling and the impact of the Western sanctions on Russia-bound investments has been quite profound, Moscow has shown more determination to use political, financial, and security resources to get its way in Ukraine than other actors. The recently-concluded trilateral energy talks (with the EU, Russia and Ukraine) give some hope as the winter approaches, but it is difficult to see any quick peaceful solutions to the conflict. The EU would do well to continue hoping for the best but preparing for the worst.

The EU’s best course of action in the current Ukrainian crisis is to focus on principles, not personalities. Europe should support any party and government that is willing to tackle corruption and implement much-needed sweeping reforms (in the energy sector, business, state administration, education). Emphasizing issues rather than parties would be the best way for the EU to regain credibility among Ukrainians. The Visegrad Four countries – with their own experience of transition – can be particularly helpful, not just be advising their Ukrainian partners on how to do reforms but also sharing lessons learnt on what did not work in Central Europe, what pitfalls they experienced and how to address them.

 

András Rácz, Senior Research Fellow at the Finnish Institute of International Affairs (FIIA), and Member of the Board at the Centre for Euro-Atlantic Integration and Democracy (CEID).

The new government of Ukraine will face many challenges. It will be crucial to keep the coalition together after the initial euphoria fades away. In addition, it will have to overcome the extensive corruption still rattling all state institutions, and to improve their functioning. Also, it will have to win the “hearts and minds“ of the population for painful reforms. The new government will have to focus also on setting the right fiscal policies to avoid state bankruptcy and on coping with the loss of control over the occupied territories.

Russia will most probably seek to stabilize what it already has, and prevent Kyiv from regaining control over the occupied parts of the Donbass. A further military escalation is unlikely, simply because Russia no longer needs it. For the most part, Russia has already achieved its political goals. However, it will keep using all its means and leverages (both overt and covert) to undermine and weaken Ukraine’s functioning.

Due to this, Ukraine is likely to remain a weak, dysfunctional state. Its NATO accession is ruled out for a long time due to its loss of territorial integrity. EU accession is also out of the question, moreover, even the implementation of the DCFTA has been postponed until December 2015, which keeps the window open for Moscow to completely torpedo it later next year. The last elections showed only miniscule support of radical Ukraine nationalists. Hence, despite the frequent allegations of Russian state propaganda, in reality ethnic Russians in Ukraine are not in any danger (which was not clear in February-March 2014).

To help Ukraine, the EU should keep the sanctions against Russia in place. While these sanctions also negatively affect the EU, they are an efficient leverage over the Kremlin. If Russian aggressive behavior continues, then not only Ukraine would be at risk, but also the overall security and stability of Europe. Paying an economic price is still much better, than paying a security price. This is something that the Hungarian government would also need to understand, and act accordingly. It is in our essential security interest to avoid the collapse of the Ukrainian state. Budapest should do its best to help Kyiv to avoid state bankruptcy, and to supply Ukraine with as much natural gas as possible through reverse flow to decrease its dependency on Moscow. In the long run, Hungary should strongly support the diversification and energy efficiency efforts of Ukraine.

The EU and the V4 within should do its best to contribute to the modernization of the Ukrainian state administration. This should include inter-administration experience transfers, and large-scale scholarship programs aimed at educating a new Ukrainian elite. The International Visegrad Fund may consider expanding its scholarship programs to Ukrainians. Due to its geographic proximity, lower living costs compared to Western European universities, and also the linguistic proximity (except Hungary, the V4 countries have good possibilities to open up their high education institutions to Ukrainian students to a much larger extent than before.

This text has been republished with the kind permission of the Central European Policy Institute. The opinions expressed here are the authors’ and do not necessarily reflect those of their institutions. “A View from Central Europe” series is edited by Andrej Chovan.

 

Wojciech Konończuk is the Head of Department for Ukraine, Belarus, and Moldova, Centre for Eastern Studies (OSW).

Jana Kobzová is an Associate Policy Fellow at the European Council on Foreign Relations (ECFR) and an Associate Fellow at Central European Policy Institute (CEPI).

András Rácz is a Senior Research Fellow at the Finnish Institute of International Affairs (FIIA), and Member of the Board at the Centre for Euro-Atlantic Integration and Democracy (CEID).

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