European leaders on Monday gave visiting Ukrainian president Viktor Yanukovich until May to prove that his government is committed to political reform, conditioning a free-trade agreement on improved human rights in the Eastern European country and demanding that it refused to enter a customs union with neighboring Russia.
European Commission president José Manuel Barroso argued that it was “not possible” for Ukraine to deepen relations with Moscow while it seeks to expand trade relations with the West. “What we have to clear about it is one country cannot at the same time be a member of a customs union and be in a deep, common free-trade area with the European Union,” he said.
Yanukovich said he was working to find a “model of cooperation” with Russia but will be hard pressed to sever ties with Moscow to the extent that the European Union’s leaders would apparently like it to. Ukraine is home to some eight million ethnic Russians, many of whom voted for Yanukovich’s conservative party in the last election, and heavily dependent on its eastern neighbor for oil and natural gas imports. It also transits nearly 70 percent of all Russian gas that is shipped to European countries.
Twice in recent years has Russia shut gas supplies to Ukraine amid price disputes while Russian companies tried to pressure it into surrendering ownership of its transit infrastructure. Even the fairly pro-Russian Yanukovich is reluctant to for fear of losing the only leverage he has in his relationship with Moscow. His government seeks to wane its dependence on Russian imports by developing domestic shale gas reserves in cooperation with Western companies like ExxonMobil and Shell.
From the Russian perspective, preventing Ukraine from drifting into the Western orbit is both an economic and strategic imperative. The trade or association agreement with the European Union could be seen as a first step toward membership. It forces Ukraine to liberalize its economy and put it structurally on par with other European states, enabling further investment in the country to the possible detriment of Russian companies. Once the process is complete, under the bloc’s current accession rules, Ukraine could apply for membership and the countries already in the European Union would have little legal basis to deny it.
That would be the greatest blow to Russian president Vladimir Putin’s hope of pulling many of the former Soviet Union states into an “Eurasian Union.” Ukraine is the most populous of former Russian satellite states, a major trading partner and shares Russia’s culture and Orthodox faith. Even many liberal Russians like to think of it as an extension of Russia proper and regret the separation of the two after the collapse of communism in Eastern Europe.
By keeping Ukraine in its sphere of influence, Russia maintains a foothold in Europe, indeed, a “European” identity, whereas the alternative, an Eurasian Union that includes only Central Asian republics besides Russia, would relegate it to a less pivotal role in world affairs.
When push comes to shove, however, Russia isn’t in a position anymore to force its western neighbor into any association scheme. The decision therefore remains Ukraine’s. If its attempts at political reform at halfhearted and fail to satisfy European Union member states, it must look east by default and would lose the ability to balance its relations between Europe and Russia to its own benefit. At the same time, full European membership will likely remain a bridge too far for the time being, at least as long as Ukraine depends so heavily on Russian hydrocarbon imports.