Can the US deal a blow to EU and Russia together over Ukraine?

EU-Ukraine Summit, 25/2/2013. Viktor Yanukovych, President of Ukraine, Herman Van Rompuy, President of the European Council, José Manuel Barroso, President of the European Commission. ("The Council of the European Union" photographic library).

EU-Ukraine Summit, 25/2/2013. Viktor Yanukovych, President of Ukraine, Herman Van Rompuy, President of the European Council, José Manuel Barroso, President of the European Commission. (“The Council of the European Union” photographic library).

Within 24 hours the agreement that the European Union brokered in Ukraine was turned into a worthless paper by around 200 MPs and some hundreds of heavily armed ‘protestors’ in Kiev. Given that the power behind this radical change in the Parliament couldn’t be Russia or the EU it has to be Ukraine’s proper oligarchs, the most important of whom run numerous parliamentary groups of their own. The deeply rooted corruption in the country has led that the business and government are closely interrelated.

On Saturday, only hours after the agreement between Victor Yanukovych and the Ukrainian opposition party leaders had been signed and endorsed and also signed by three European Union ministers of Foreign Affairs (German, French and Polish) representing the EU Foreign Council, the Ukrainian Parliament rendered this pact void. In direct violation of the aforementioned pact, the legislative voted Yanukovych out of his office and appointed as interim President the speaker of the house Oleksander Turchinov. Yanukovich left Kiev and went to his native city of Donetsk where he has strong local support. After the Kiev Parliament votes, the MPs of the eastern Russian speaking provinces along the Russian borders and the representatives of the southern peninsula of Crimea gathered in the old capital city of Kharkiv and denounced the authority of the legislative.

East and South denounce Kiev

As things have turned out, Moscow lost the day in every respect, political and economic. For one thing, the Russian backed President lost his grip on the capital Kiev. As a result, the association agreement he has signed with the Putin inspired Eurasian Union (EAU) is now in the air. The EAU presently comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. However, if Ukraine joined it instead of the European Union, the EAU could assume an important role in the world geostrategic arena. The special weight of Ukraine could have turned the Eurasian Association from a Moscow attempt to increase its sphere of influence, into a considerable economic and political player.

So Moscow has definitively lost the option of ever incorporating Ukraine in the EAU, at least not in one piece. Secondly, Russia also appears now to be loosing large chunks of money as the largest creditor of the country. Moscow has so far lent to Kiev at least $80 billion, without counting the extra $15 billion in new soft loans if Ukraine joined the EAU. On top of that, the Russian natural gas monopoly, Gasprom, has agreed to sell its product to Ukraine for a very low price and also offered a favorable arrangement for old debts.

Moscow loses

Speaking of gas though, the new pro-western regime in Kiev will soon face the wrath of the Kremlin. Ukraine imports almost 80% of its needs in fossil fuels from Russia always at favorable terms and credit. However Moscow, being now denounced by Kiev’s new rulers in the streets and in Parliament as a hostile neighbor, will change its attitude concerning the sales of natural gas without which Kiev will freeze. Taking into account that Ukraine is very close to bankruptcy, financing the needed imports of fuels will be the first stalemate for whichever government is formed this week.

The European Union was reportedly ready to support Ukraine with a soft loan of a mere $3 billion, if Yanukovych had signed the Association Agreement. This kind of money would have not helped the country at all. Even the International Monetary Fund will find it impossible to help the country because of its past failed dealings at the time of the Premiership of Yulia Tymoshenko. Incidentally, she has just been released from Jail hospital, and is the strongest political opponent of Yanukovych. She has already denied the position of Prime Minister offered to her by the Parliament.

The EU also loses

In any case, the average Ukrainian in the street doesn’t have the best memories of her years in power after the Orange Revolution. She ended up mixed up to her neck in the corrupt swamp of government-business relations. The fact that she was jailed annoyed the western governments much more than the Ukrainians. Her release from jail was a Brussels prerequisite for the signing of the Association Agreement with the EU and an important reason for Yanukovych’s last minute decision to abandon his country’s western prospects.

All in all, Ukraine has now become a complete absurdity, bringing Europe back to the cold war. It’s not clear why the oligarchs abandoned Yanukovich. It’s clear though that the EU could not have been behind the total encroachment of the Agreement its ministers had brokered hours ago. The complete and sudden abandonment of the pact that Brussels had managed to bring about with painstaking efforts, was not the best turn Europe could expect. In reality the weekend developments in Kiev over the weekend are hurting both Russia and the EU.

Who gains?

This is more true especially after the grossly derogatory comments towards the European Union by the top American diplomat for Europe, Victoria Nuland, who said “f… the EU” while talking over the telephone to the US ambassador to Ukraine, Geoffrey Pyatt, last week. At the end of the day, the Americans, possibly by managing to convince the Ukraine oligarchs to throw-out Yanukovych may have f… the EU and Russia at the same time. What happened in Kiev this weekend greatly troubles the EU and Russia together, with the Americans having nothing to lose. As they say ‘when the other players lose I gain’…

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