Why Does Ukraine Matter to the EU?

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Summary
A real discussion of the EU’s interests in Ukraine that moves beyond generalities may help member states avoid further frustrations and help the EU get more out of its relations with Kyiv.
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Some adults turn their noses up at the question of “why,” believing it to be childish. And when it comes to the EU’s foreign policy, especially in its Eastern neighborhood, the question is considered simply inappropriate. That the EU will engage with its Eastern neighbors is just a given today. Take Ukraine. The EU has made a significant political investment in Kyiv over the years but has not given much thought to why Ukraine matters.

Yet, the EU should take a strategic pause and ask this question. Brussels’s policy and the instruments it has used have had little impact on Ukraine. The country is moving further away from the EU and into a gray zone of no reform. Many in the union are frustrated with Kyiv and wonder why they should be more pro-Ukrainian than the Ukrainians themselves. Or why they have to save Ukrainians from bad leadership or from Russia.

Still, the EU as a whole is not asking the fundamental question and is sticking to its current policy despite all the worrying signs.

By ignoring reality, the EU is setting itself up for a big disappointment and running the risk of limiting its policy options to disengagement. A real discussion of the EU’s interests in Ukraine that moves beyond generalities may help member states avoid further frustrations and help the EU get more out of its relations with Kyiv.

The EU Foreign Policy Radar Screen

Ukraine was largely invisible to the EU in the first decade of its independence. Relations were based on the vague EU-Ukraine Partnership and Cooperation Agreement of 1998 (similar accords were offered to all post-Soviet states). None of the then fifteen EU members at the time saw Ukraine as a priority. It was too far away from the EU, too difficult to understand, and too close to Russia.

Ukraine appeared on the EU’s political radar screen with the 2004 enlargement. Especially after Ukraine’s 2004 Orange Revolution brought a pro-Western, democratic-leaning government to power, the EU was forced to think about a special policy for Ukraine. The country seemed like it was the next Poland, which joined the EU in 2004 after significant reforms. Responding to Kyiv’s European agenda and helping it reform became natural for many in the EU. Ukraine was offered “all but institutions”—the chance to access the EU’s internal market after significant reform—within the newly launched European Neighborhood Policy and further Eastern Partnership initiative (EaP).

The EU could take that approach as long as Kyiv appeared intent on reform. But there was a serious democratic regress in Ukraine caused by the leadership’s massive power- and asset-grabbing. This change of course during the presidency of Viktor Yanukovych revealed a Ukraine that was not ready to seriously reform. This was not a Poland that would do everything possible to get back home to Europe.

The EU initialed the Association Agreement with Ukraine, but full signing of the accord was put on hold until things started changing for the better. If Ukraine does not fulfill the EU’s conditions over a certain period of time—which include addressing the issues of selective justice, reforming its electoral legislation, and conducting a number of reforms within the Association Agenda—the agreement may be shelved and Ukraine may start slowly disappearing from the EU’s strategic map.

The EU’s Interests in Ukraine—Driven by Member States

EU foreign policy is too young, and Brussels’s role as a leader in strategic thinking is still weak. Many policy decisions are very much driven by individual member states and their often divergent national interests.

The member states did not engage in much debate about Ukraine’s importance. According to the 2003 European security strategy, which aimed to build a ring of well-governed states around the union, Ukraine had some sort of role to play. This was a lowest-common-denominator strategy, in which Ukraine was put in a basket with other EU neighbors and expected to become a well-governed democracy and market economy on the EU’s border. And that made it a safe bet for securing an EU-wide consensus.

However, that was where the similarity of positions ended. Deciding why to actually interact with Ukraine was left to each member state and depended on the state’s location in Europe, historical experience, and national interests.

The EU member states initially formed two groups vis-à-vis Ukraine—the idealistic activists and pragmatic conservatives.

Idealistic Activists

The Central and Eastern European states that joined the EU with the 2004 and 2007 enlargements, especially Poland, interpreted the lowest common denominator as an open-door policy. Ukraine was important for creating the Europe these idealistic activists wanted.

They had a common history with Ukraine, and their populations included large communities of Ukrainian migrants. They felt obliged—as Germany once felt with Poland—to do good and to lend a hand to help Ukraine weather painful reforms. This view was strongly supported by their societies. Pragmatic calculations were secondary, though geographical and linguistic proximity meant that Ukraine’s market did present many opportunities to these states. They advocated for the EU to give Ukraine a membership perspective and for the Association Agreement to be signed quickly as a step toward membership.

These idealistic activists were later supported by a few old member states, like Sweden and Finland, and many in the European Parliament, the European Commission, and the newly formed European External Action Service.

Yet, the group split over the presidency of Viktor Yanukovych, when Ukraine turned away from democratic reform.

One faction, led by Poland and Lithuania, continued pushing for the agreement to be signed unconditionally. Their stance was driven by a fear of Russia, and, in particular, the fear that if Ukraine were not in the process of integrating with the EU, it could be more easily drawn into the Russia-led Eurasian Customs Union. Keeping Ukraine in the EU’s orbit through the Association Agreement was seen as a way of keeping Russia away from the EU’s (read: Poland’s) borders. This faction felt obliged to press the rest of the EU to not give up on Ukraine despite negative developments on the ground.

The other faction (essentially, all of the idealistic activists but Poland and Lithuania) still wanted to help Ukraine but needed to see signs of genuine interest in reform and shared values from Kyiv. They supported signing the Association Agreement with Kyiv only after the Ukraine had met all the preconditions.

Growing disappointment with Yanukovych after endless failed attempts to reach out to him turned even the last do-gooders away from idealism. Talking about Ukraine became emotionally difficult, and these states did not see much sense in pushing the rest of the EU toward signing the agreement at any cost. They had other, more important issues to talk about with the heavyweights like Germany and France. Wasting political capital on Ukraine, even given the Russia factor, no longer seemed worth it.

Pragmatic Conservatives

A conservative group consisting mainly of older member states sat opposite the idealists. They were the closest it got to the lowest-common-denominator position. This group felt no historical connection to Ukraine and no obligation to help it reform. Some of these member states were simply geographically too far away from Ukraine. And for many of them, Kyiv was still legitimately in Moscow’s orbit.

This group saw the 2004 and 2007 enlargements as necessary but also as defining the EU’s external borders. Any further Eastern enlargement was seen as a weakening of the union and a dilution of European integration. These countries’ interest in Ukraine was rather selfishly straightforward—they wanted a stable, well-governed, democratic country that was friendly to the EU. These states also had an interest in Ukraine’s market, but it mattered just as much as any other big market outside the EU.

They did not object to engagement with Ukraine, but they thought the country should be kept at arm’s length and that engagement should take place on the EU’s terms. That meant Ukraine had to first do all the necessary hard work, and only then could it enjoy any possible benefits from proximity to the EU. Their line has always been clear: Ukraine had to reform to prove it deserved to get closer to the EU.

They opposed offering the carrot of membership to Ukraine, even in the immediate aftermath of the Orange Revolution when public opinion of Ukraine in those countries was relatively positive. The furthest they agreed to go was to launch talks on the Association Agreement.

For this group, Yanukovych’s presidency underlined the need for the EU to think about its values. These states insisted that Kyiv had to fulfill the EU’s conditions before the Association Agreement could be signed. Their tactical interest shifted. They put rapprochement with Ukraine—a country whose leadership acted against European values—on hold.

Idealists and Pragmatists Unite

The positions of all member states are now coalescing around the vision of waiting for the situation on the ground to improve while keeping the option of signing the agreement open. They primarily seek not to promote European values in Ukraine but to ensure that the EU does not compromise its own values because of the geopolitical fears of certain EU member states. Some idealists are still trying to influence the situation on the ground, but even their hopes are bound to eventually fade.

What Ukraine Means for the EU Today

Alas, the EU debate on Ukraine is rarely about Ukraine itself or the EU’s interests there. Instead, it is primarily about EU enlargement or Russia. On both issues, the positions of EU member states are irreconcilable. These issues are wrapped up with so much emotion and fear that the member states cannot talk about their foreign policy interests with respect to Ukraine in an objective way. But Ukraine is significant for the entire EU (EU27) in terms of political stability, security, and energy-related matters.

Politics and Security

Today’s Ukraine poses a security threat to the EU. It is not building a nuclear bomb, it is not capable of starting a war with its neighbors, and it cannot launch a new Cold War with the West. But Ukraine’s poor governance, which has been further degraded by Yanukovych’s presidency, may potentially lead to instability and public (possibly violent) discontent that could negatively affect the EU. At the least, it may significantly increase the flow of migrants from Ukraine, which is already ranked fifth among non-EU suppliers of migrants to the EU27.

Ukraine’s democratic decline also has a negative impact on Eastern Europe and sends negative signals to the other EaP countries (Armenia, Azerbaijan, Belarus, Georgia, and Moldova). For years, Kyiv was a role model for the EU’s EaP, and it remains a key partner in the initiative. The Association Agreements with Moldova, Georgia, and Armenia were modeled on the EU’s accord with Ukraine. A declining Ukraine casts a long shadow over the Eastern Partnership and undermines its value for the entire region.

Kyiv is an important actor in the “5+2” talks on the conflict between neighboring Moldova and the country’s breakaway region of Transnistria as well. For a long time, Ukraine aligned with the EU and proved to be an important partner for Brussels on this issue. However, Ukraine under Yanukovych is more vulnerable to external (that is, Russian) pressure and may eventually change its approach to Transnistria.

Economics and Trade

Of the EU’s Eastern neighbors, Ukraine is the country with the second-largest joint border with the EU at over 1,300 kilometers (or 800 miles). In 2011, Ukraine was the union’s 24th most important source of imports (accounting for 0.9 percent of imports from non-EU countries) and ranked nineteen on the list of countries receiving the most EU exports (accounting for 1.4 percent of EU exports). This compares with Russia, which is the EU’s second-largest import partner and fourth-largest export partner, and Turkey, which is seventh and fifth, respectively.

The potential for greater economic and trade links between the EU and Ukraine is significant. Ukraine offers a market of 45 million consumers, and 70 percent of its arable land is made up of some of the most fertile soil in Europe. But for this potential to be realized, and for EU businesses to be willing to invest in or trade with Ukraine, the country has to dramatically improve its poor business climate. It currently ranks 137 out of 185 countries in terms of the ease of doing business according to the World Bank’s Doing Business 2013 report and 73 out of 144 countries on the World Economic Forum’s Global Competitiveness Report 2012–2013.

Energy

Despite Russia’s attempts to redirect its gas supply to the EU through the Belarusian gas transit system and Nord Stream pipeline, Ukraine remains the most important transit country for Russian gas going to the EU. Today, twelve EU member states receive gas through the Ukrainian transit system,1 which is in relatively bad shape and needs to be significantly modernized.

Yet, the Ukrainian authorities have not asked the EU for the funds that were pledged by Brussels in 2009 to help modernize the system. The Ukrainian government is also reportedly holding negotiations with Moscow on the creation of a bilateral consortium to manage the Ukrainian gas transit system. While this may provide for the safe transit of gas to the EU in the short run, it does not guarantee modernization and hence security of transit for the EU in the medium term.

Ukraine also offers energy resources that the EU needs. It is one of the biggest producers of electricity in Europe. Its electricity systems are partially integrated with the European Network of Transmission System Operators for Electricity, and the country supplies electricity to four EU member states (Hungary, Slovakia, Poland, and Romania). In addition, Ukraine has significant natural gas and shale gas resources that it is starting to develop.

The Russia Factor

Russia appears to be an unavoidable piece of the puzzle. When it comes to the common neighborhood, the EU looks as if it is competing with Moscow for spheres of influence. While the EU is neither willing to nor capable of playing this game, Moscow is. A badly governed Ukraine—that is, one that is corrupt and undemocratic—is more vulnerable to Moscow’s pressure and thus has more chance of being absorbed by the Eurasian Customs Union over time. While this does not confront the EU with hard security threats, it may complicate trade and other relations with Ukraine.

What Should the EU Do?

The question of Ukraine’s relevance would not be asked if the country were consolidating its democracy and transitioning to a market economy. The question then would be how to help Ukraine reform in the most efficient way. The EU’s lowest-common-denominator approach would probably be enough, and the Association Agreement coupled with financial support could be the natural instrument for assisting Ukraine.

But today’s Ukraine is a mixed bag for EU members. Kyiv does not want to reform, and the Ukrainian leadership has taken numerous steps that move the country further away from the EU. In its current shape, Ukraine seems to matter only because of its size, its geographical proximity to the EU, and the host negative, problematic agenda items that it brings to the table. It has long had positive potential, but realizing that potential, especially in terms of economics and trade, is prohibitively expensive, and the EU has more to gain from engagement with other countries, such as Russia or Turkey.

The EU’s natural approach is most likely to wait for the situation in Ukraine to improve. Over time, the EU may consider a policy of containing Kyiv. But that would make the EU a mere observer of developments in the region and would go against the EU’s interest of building a stable and well-governed neighborhood, a goal that is still very valid. Therefore, continued engagement with Ukraine is key. However, the EU may need to reconsider a few things to be more successful in its endeavor.

EU member states should agree to pause the EU enlargement debate and deliver a clear message to Ukraine.The sad truth is that the EU does not have the institutional capacity or will to enlarge beyond a few Balkan countries. It is also clear that the enlargement carrot will not work in Ukraine as it did in Poland. Erasing the issue of enlargement from the Ukraine debate will help the EU be more pragmatic and less emotional about Ukraine. It will tame Kyiv’s bloated sense of self-importance and help it understand Ukraine’s interest-based relevance for the EU27.

The EU should end its unnecessary rhetoric about competition over Ukraine with Russia. Toning down the rhetoric does not mean that the EU is giving Ukraine away to the Eurasian Customs Union. Rather, it means stopping Kyiv from playing Brussels against Moscow and letting Ukraine decide its direction independently. Brussels should remain open to signing the Association Agreement if Kyiv shows signs of real interest in such a relationship. Such a move would also reinforce the value of what the EU has to offer rather than fueling comparisons with Russia.

EU member states should also discuss EU27 interests in Ukraine and find relevant instruments for engaging with Kyiv. Today’s EU is better equipped for this discussion than it has been in the past. There are fewer illusions about Ukraine, and the EU is no longer afraid of losing the country.

The EU’s primary interest in Ukraine is putting an end to the negative agenda. While the EU’s general objective toward Kyiv may remain, the EU will have to rethink its instruments of engagement. Democracy is a bottom-up process, as recent events in the Arab world have demonstrated. The EU cannot impose it from above. Brussels should gradually engage in comprehensive outreach to the grass roots—a process that is not well-known to the EU. Tripling the number of scholarships for Ukrainian students of all levels and increasing the number of possibilities for professional training and exchange beyond government officials coupled with support for grassroots movements will be key. Providing visa-free travel to the EU for ordinary Ukrainians can help significantly facilitate the learning process and may contribute to change in Ukraine.

This is a long-term investment that will require creative solutions from the EU to overcome Ukraine’s rather messy politics. However, it is clearly in the EU’s strategic interest. Once the EU27’s interests in Ukraine are clarified and its instruments have been fine-tuned, member states can move on to discussing the relevance of and approach to the entire Eastern Partnership region.

1 The states are Austria, Bulgaria, the Czech Republic, France, Germany, Greece, Hungary, Italy, Poland, Romania, Slovakia, and Slovenia.

End of document

Comments (13)

 
 
  • Dmytro Shulga
    Quite right, the EU should define its own interests vis-a-vis Ukraine. It's not a question of values vs. interests. The real problem seems to be that many in the EU see no interest in Ukraine, and this is a mistake. Ukraine is not the EU's #1 trading partner, but it is still an important market. E.g. German trade with Ukraine is bigger in volume than German trade with some the EU's member states like Greece or Baltic states taken together. One can rightfully claim that the business climate is bad, but Doing Business Index indicators are substantially better than those of the previous 'orange' years. As regards the EU's energy security - Ukraine is a member of the Energy Community, an important transit country (not yet controlled by Gazprom, as most post-Soviet states), and a large reserve of the shale gas. Taken all this into account, isn't Ukraine important for the EU?
     
     
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  • Yuriy Matsiyevsky
    What about supplementing engagement with personalized sanctions if Yanukovych fails to meet the EU’s conditions for the association agreement? There are some voices both within and outside Ukraine to modify the current EU strategy.
     
     
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  • Eberhard Rhein, Brussels
    Well done Olga! Both in terms of analysis and policy responses.
     
     
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  • UK. Raine
    I have worked for 15 years in Ukraine since the Soviet bloc collapsed and over this time realised that in one form or another Ukraine has been occupied since 1709. When Peter the Great first stole their identity and history. With the theft of the name Russ. Now it seems they have finally got their identity back they are like children in a playground. They don't know what to do with it. They need time to grow up and Moscow still wants control, they're not happy to give back what they stole so long ago. Ukraine when left in peace which was very rare has always strived for democracy. Moscow however is happier with autocratic rulers if not the German tsars. Then the Georgians Stalin & Beria with the KGB. Wasn't Putin a colonel of the KGB?
     
     
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    • LG replies...
      Kievan Rus is not the same thing as Ukraine. Ethnic Russians, Belarusians and Ukrainians all (rightfully) claim descent from Kievan Rus. To claim that Kievan Rus was purely a Ukrainian kingdom is wrong because at the time no such ethnic group as Ukrainian existed, same with Russian or Belarusian ethnic group. You ought to read non biased sources of Ukrainian history, not the ethno-nationalist bunk they propagate from Kiev and Lvov.   An independent Ukraine has never existed prior to 1918.
       
       
  • Mitchel
    Ukraine is the largest European country, with significant natural and mineral resources and is of strategic significance for the EU in terms of security.
    It would be very unreasonable and unwise for the EU to lose Ukraine and other East European countries (Moldova, Georgia, Belarus) to Russia which would strengthen Russia as an empire and only create more rivalry and threat/danger to the EU from Russia. The EU must not wait until Russia succeeds in domination over those countries. Further delay in bringing those countries into NATO and the EU may be very costly to the EU in the near future if Russian neoimperialism succeeds in its policies.

    Russia is a disguised enemy and a rival of the EU, not a reliable partner. Only Russia is a real threat to the EU economically, militarily (with the largest arsenal of weapons of mass destruction) and in terms of security because Russia has expansionist domineering ambitions not only in Eastern Europe, but also globally. Ukraine, Georgia, Moldova, Belarus as European peaceful countries (unlike Russia) must belong to NATO and the EU to make the EU stronger and more prosperous so that they have a brighter future and do not get under oppressive Russian rule again which this time may be fatal to these nations.
     
     
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    • LG replies...
      The cold war ended bro!
       
       
    • Havemaskwilltravel replies...
      Oh, I'm so happy that the EU is able and willing to give us that 'bright' future without oppressing us. Hail, hail the EU!
       
       
  • LG
    The author fails to mention that bringing in Ukraine would require billions of dollars in investments from the wealthier EU members. Pray tell where will the cash strapped governments get the cash to fund Ukraine's modernization? Romania and Bulgaria ate up a good chunk of the money Brussels sent their way and they are not successful states by any means of the imagination, especially Bulgaria where the mafia is still ingrained with state offices and officials.
     
     
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  • Vadym
    Very good analysis Olga. Brussels does not have united strong foreign polices. That is why he is loosing to Russia. But for Ukrainians to "put Ukraine in a basket with other EU neighbours and expected to become a well-governed democracy and market economy on the EU’s border" will not work. I am Ukrainian myself and logic of majority of people from Ukraine is: " I do not want to be a a second grade neighbour. Give me a chance to be a member of EU in the future or I will join to another union or country as equal partner. It sounds for me like to be a good dog around rich household. Every one like you but nobody never let you sit at the table.
    That is why the problem is not only with president of Ukraine. It is more fundamental problem. Many friends of mine who are nor supporter of Yanukovich at all are very frustrated and humiliated because such position of EU regarding Ukraine, and they not sure if it will be right to sign the AA with EU. Even though next president will be more democratic and will sign the AA with EU this association will bring constant trouble to both parties. Only prospective to be a member of EU when Ukraine will met all standards will give a pace of mind to both parties.
     
     
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  • Guest
    The EU "wants" the Ukraine because of a workforce even much cheaper than in Poland, that's why.
     
     
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  • UKoutofEUnow
    We Euro sceptics in the United Kingdom, DO NOT want further EU enlargement. If Ukraine, Turkey and other Eastern European countries join, it would be a further disaster for the big 5 EU countries, especially the UK. There would be mass immigration from these countries to the West. The UK is already struggling in every way, because of the massive influx of people from Poland and the other countries that joined in 2004. These Eastern Europeans did not care one bit, about British citizens, when they came over to the UK. Our services, like schools and hospitals, are completely over burdened with the mass influx of Eastern European citizens. Our people cannot get jobs. The last thing the United Kingdom wants, is further enlargement of the European Union. In fact, the United Kingdom needs to get out of the EU NOW. It is bad for Britain, and will only get worse. My fellow British citizens, vote on the 22nd of May, to get the United Kingdom out of the EU.
     
     
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  • mutebi jamil
    Europe is the most blood littered continent in the world.i really wonder why it still ,it finds a problem to unit fully at zero human cost with Turkey than risk having unpredictable super power enemy like Russia may wait until winter and cuts off all gas supplies to Europe.America may find a problem of getting its soldiers out of Afghanistan.So need to rush but calculate.Ask the late Napoleon about the Crimean war
     
     
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Source http://carnegieeurope.eu/2013/04/16/why-does-ukraine-matter-to-eu/fzq3

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