The Turning Point, Minsk 2013

The Turning Point, Minsk 2013

2013 was a relatively calm year in Ukrainian politics. Yanukovych traveled around Europe convincing naïve Europeans that he wanted to join the EU. In post-Soviet Ukraine, this desire was nothing new. All of Yanukovych’s predecessors – Leonid Kravchuk, Leonid Kuchma, and Viktor Yushchenko – also planned to get Ukraine into the European Union. The Girl in Kherson At least in theory. There was a practical aspect to consider. Not only Yanukovych, but the President’s entire family, the entire government, and the entire Ukrainian elite of oligarchs and hangers-on really did want to be part of Europe, but really only for holidays and in order to check their foreign bank accounts.

Accession to the EU required as a first step the signing of the EU–Ukraine Association Agreement (EU-UAA). Negotiations between Ukraine and the EU on this agreement were launched back in 2007 under Yushchenko. The new agreement was supposed to replace an existing agreement on partnership and cooperation between the European Union and Ukraine and to introduce systemic social and economic reforms in Ukraine and a large-scale adaptation of Ukrainian legislation to EU norms and rules. The text of the agreement did not mention Ukraine’s joining the EU as a full member, but it did not deny it the possibility of joining either. The signing of this agreement took Ukraine’s relations with the EU to a new level, from partnership and cooperation to political association and economic integration. Many Ukrainians believed, also naïvely, that this meant integration with Europe.

An important element of the agreement was the establishment of a comprehensive free trade zone. This prospect made industrialists closely connected to Russian business very nervous. Russia saw the prospect as a potential threat, because joining the EU was incompatible with joining its own CIS Customs Union, which was dominated by Russia. Accession to the Customs Union meant Ukraine’s economic orientation to Russia and subordination of the Ukrainian economy to the Russian economy. Joining the EU meant the orientation towards Europe and subordination of the Ukrainian economy to the European Union.

Russia and pro-Russian “business circles” in Ukraine, such as “Ukrainian Choice” headed by Kuchma’s former Chief of Staff Viktor Medvedchuk, the long-time Vladimir Putin’s associate and KGB-FSB operative like General Marchuk, were particularly active in this respect. They launched a PR propaganda campaign claiming that the signing of the Association Agreement with the EU would ruin Ukraine’s economy because it would lead to a sharp reduction of trade and economic relations with Russia. At the same time, in Russia it was said that the creation of a free trade zone in Ukraine would lead to cheap western goods being smuggled into Russia and hit Russian producers.

Nevertheless, in Ukraine a majority of the population believed in the authorities’ intention to follow the path of European integration and supported this idea. Numerous European summits and meetings, consultations, and preparation of the Association Agreement itself seemed to be leading to the inevitable – the prospect of “associated membership”.134 Yanukovych was supposed to sign a Stabilization and Association Agreement (similar to the EU agreements with Albania, Serbia, Montenegro, and Bosnia and Herzegovina), or an Association Agreement between Ukraine and the EU of the type signed by Macedonia in 2001. The only difference being that Kyiv would sign it in two stages: first the political part and then the economic part.

The point of signing this agreement was that Ukraine would undertake political reforms aimed at bringing the country up to European standards. In particular, it was necessary to reform Ukraine’s judicial system, including the office of the Attorney General. Ukrainian politicians were especially tempted by the prospect of signing the treaty on the free trade zone and visa-free travel. It was this simplified idea that prevailed. Ukraine would sell its products in Europe duty-free, attracting European industry to Ukraine, while visa-free travel regime would allow ordinary Ukrainians to travel freely in Europe and work there. Joining the European Union seemed like a free ticket to a civilized, well-fed and quiet European life.

The reality was much more complicated. Yes, it would be possible to travel around Europe without visas. But the right to work was still a distant prospect. The European labor market planned to protect itself from Ukrainian guest workers who, according to many, already flooded Europe, especially Italy and Spain, even without Ukraine’s accession to the EU. Goods produced in Ukraine had to obtain European “quality certificates” in advance, which cost money. These certificates did not in itself guarantee that Ukrainian goods would be delivered to Europe and freely sold there. For this to happen, the largest Ukrainian producers (there is nothing to say about small ones) had to integrate into European trading networks and obtain the right to sell their goods there. After that, Ukrainian goods, that were up to European standards, would compete with European in a purely commercial sense of the word.

At this point, it might transpire that not all Ukrainian goods were competitive, since many European firms received subsidies from their governments and supplied goods to the market at prices lower than those in Ukraine. Europe was most likely interested mainly in “primary processed” products – metals, grain, fertilizer, and software. Here Ukraine was really competitive.

But even the leading enterprises in Ukraine were struggling to survive, lacking modern marketing and sales markets.135 Since 1991, while funds were being siphoned off to line pockets of this oligarch or the other, there had been little capital investment in production and equipment was obsolete. The famous Zaporozhye Automobile Plant (ZAZ), producing bottom-range automobiles, could only compete with Mercedes in its home market in Ukraine due to the very low price of its cars. The famous mines in Donbas, where miners died year after because of antedeluvian labor and safety conditions, were untouched by modernization with very few exceptions. By European standards, they probably should have been shut down because of longstanding safety and environment violations. This list of zombie or half-bankrupt enterprises could be extended ad infinitum. Over the previous two decades had fallen massively behind in Europe.

In the economic sphere, one of the main conditions for Ukraine’s rapprochement with Europe’s economy, was the imposition of the rule of law on opaque business practices. But shady business was the feeding ground of Ukraine’s clan-oligarchic system of power. The whole state machine, from top to bottom, was built and kept on the kickbacks and bribes. Neither the officials who took bribes, nor the business leaders running Ukraine’s multitude of state-related companies who did not pay taxes, were genuinely interested in proper legal and fiscal controls over their shady operations. Only those who were involved in businesses that operated transparently and honestly, and paid taxes to the state on a regular basis, were keen. There were few who belonged to the latter category in Ukraine.

Were the political authorities in Ukraine ready for such a radical step: to destroy the system of bribery and kickbacks for the entire state bureaucracy in exchange for the prospect of membership in the European Union? At the end of 2013 it seemed if not a probability at least a possibility. But the necessary political and economic reforms could take many years, and the time lag of this path depended among other things on the willingness (or unwillingness) of the government and society to move decisively in this direction.

The Commission of the European Union also had its own list of accession requirements: political stability in the country; political consensus of all political parties represented in the Verkhovna Rada; a popular vote through a referendum to join the EU and pursue European integration; real, and not just paper protection of civil rights and freedoms by the Ukrainian legislation adapted to all-European standards; independence of courts, subject to the rulings of the European Court of Human Rights.136

 

As for the economic criteria formulated in the Maastricht Treaty of 1992, the situation was even more complicated and detailed. Ukraine was supposed to become a country with a market economy.137 In addition, the budget deficit was to be less than 3 percent of GDP, and the government debt was to be less than 60 percent of GDP. Stability of the exchange rate was required.138 Price stability was defined by yearly inflation, which should not be more than 1.5 percent higher than the average inflation rate of the three EU countries that topped price stability.

Despite these roadblocks, at a conference of the CIS in Minsk, Belarus, in October 2013, Yanukovych still repeated unambiguously that “Kyiv’s main priority is to sign the Association Agreement between Ukraine and the EU. This issue is not up for discussion”.

Nevertheless, Yanukovych returned from Minsk a changed man. During a confidential meeting at the conference, Putin – who had assumed the Russian Presidency again – made Yanukovych an offer that he could not (or did not want to) refuse. At any rate, the meeting brought Yanukovych to heel.

Back in Kyiv, Yanukovych suddenly recalled the unbreakable fraternity between the Russian and Ukrainian people and declared extra time was needed to sign the Association Agreement with the European Union. At the same time, Yanukovych and the Ukrainian government began discussing with the European Union the economic package Ukraine would need if it were to join the EU. The figures were astronomical, if not completely unrealistic. Ukraine projected it would lose between $150 to $500 billion in trade with Russia, as Putin would at the very least economically boycott Ukraine (a mild-mannered response) if not impose draconian sanctions (the worst-case response).

Europe could not give Ukraine such an astronomical financial package. Russia stepped into the breach as “saviour” and offered Ukraine $15 billion in loans as well as a significant reduction of gas prices in case of Ukraine’s rejection of European integration.

After the Minsk meeting, Prime Minister Azarov began shaping public opinion using a different tune, explaining how bad life would be without Russia and how unclear Ukraine’s future in the European Union would be. Much of what Azarov said was true. The Association Agreement did not automatically guarantee accession to the EU. In particular, the EU program “Eastern Partnership” adopted on the initiative of Poland and Sweden was aimed at cooperation with such post-Soviet countries as Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The Association Agreement did not imply agreement on EU membership, it was merely the case that a country that did not already have one in place could not hope to be considered for membership of the EU.

Negotiations with European partners to provide Ukraine with such a grandiose financial package went nowhere. Russia’s promise of a $15 billion loan led to the first payment of $3 billion. And then the EuroMaidan began.

The word “Maidan”, associated with Kyiv’s Independence Square, had become a national symbol of freedom and hope. It gave the word a specific though intangible moral and ethical meaning that came to embody the spirit of Ukraine’s peaceful twenty-first century revolutions. These included the “Ukraine without Kuchma” movement of 2000, the “Arise Ukraine” movement of 2002, the “Orange Revolution” of 2004. Perhaps nowhere else in Europe over the past decade have there been as many gentle revolutions as Ukraine.

These Maidans took place not only in the same location, but also according to the same script. 100-200 meters away from Maidan, the people of Kyiv went on with their ordinary lives – grandmothers walked with their grandchildren, mothers and fathers went to work, children went to schools and institutes. Everyone watched the Maidan on television, both in and outside Ukraine. They had different catalysts and different consequences. But they all had one thing in common. They were all driven by the struggle against autocracy, the usurpation of power by certain clans, the disenfranchisement of the people, the all-powerful oligarchy, and most of all rampant corruption.

Nevertheless, until 2014, the Maidan revolutions in Kyiv did not lead to changes in the political system, the mechanisms that shifted oligarchic power around, or the root causes of corruption and bureaucracy. In this sense, these early Maidan were unlike major revolutions of the early twentieth century. Some political parties and oligarchic clans were replaced by others, power was seized by a new group of people pursuing their own economic interests, and the revolutions faded without leading to serious consequences or changes in the lives of the citizens of the country or even the capitol.

The main conclusion that Maidan spectators had gradually come to was that the Maidan was nothing but a symbol, that a Maidan uprising would not accomplish the revolution. It was ultimately a harmless crowd of people in a square, even if that square was in Kyiv and was called Independence Square. But the important thing was still that the political consciousness of Ukrainians was nurtured by these half-hearted, incomplete events.

 

 

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