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03.02.2012

Stephen Pifer calls on US to avoid high-level meetings with Ukraine’s leaders

   

The following is the address given by former US Ambassador, Stephen Pifer.  All addresses can be found here: http://www.foreign.senate.gov/hearings/hearing/?id=e7475778-5056-a032-5252-eaba8a630c9a

Wednesday, February 01, 2012

UKRAINE AT A CROSSROADS: WHAT’S AT STAKE FOR THE U.S. AND EUROPE?

U.S. Senate Committee on Foreign Relations, Subcommittee on European Affaris

The Honorable Steven Pifer
Senior Fellow, Foreign Policy Center on the United States and Europe
Brookings Institution, Washington, DC

Developments in Ukraine and Implications for U.S. Policy

Introduction

Madam Chairwoman, Senator Barrasso, distinguished members of the Committee, thank

you for the opportunity to appear today to testify on developments in Ukraine and the

implications for U.S. policy and U.S. policy goals in Europe.

When Victor Yanukovych became president of Ukraine in February 2010, his first foreign

policy priority was to repair what he regarded to be Ukraine’s badly frayed relationship

with Russia. At the same time, his government indicated that Ukraine would seek a

balance between its relationship with the West—particularly the European Union—and that

with Russia. This seemed a sensible course for Ukraine in its current circumstances.

Regrettably, the first two years of President Yanukovych’s tenure in office have seen a

significant regression in democratic practices within Ukraine. That is unfortunate for the

Ukrainian people, and it is blocking the strengthening of Ukraine’s relations with the

European Union and the United States. EU officials have made clear, for example, that the

signature of an EU association agreement with Ukraine depends on Kyiv taking certain

steps, such as releasing former Prime Minister Tymoshenko from prison.

Mr. Yanukovych’s domestic policies are seriously undermining his ability to balance

Ukraine’s relationships between the West and Russia. That will complicate Ukrainian

foreign policy, leaving it less connected to Europe and in a weaker position to deal with

Russia on issues where Ukrainian and Russian interests do not coincide.

It remains in the U.S. interest that Ukraine develop as a stable, independent, democratic,

market-oriented state increasingly integrated into Europe and institutions such as the

European Union. That kind of Ukraine promotes the U.S. objective of a wider, more stable

and secure Europe. Democratic regression within Ukraine, however, impedes that

country’s ability to draw closer to the West.

The U.S. government should continue to underscore to Kyiv U.S. concerns about

democratic backsliding and remind the Ukrainian leadership that its internal political

policies have a significant impact on its relationships with the United States and Europe;

keep the door open for a more positive relationship with Ukraine should Kyiv heed the

message on democracy; and coordinate closely with the European Union to maximize the

impact of Western policy on decisions by Mr. Yanukovych and the Ukrainian leadership.

While engaging Ukraine at most diplomatic levels, the United States and European Union

should continue what appears to be a de facto policy of minimizing high-level contact with

Mr. Yanukovych until he alters his internal political policies. The West should seek to

crystallize in Mr. Yanukovych’s mind the choice between a more authoritarian political

system and a strong relationship with the West, and make clear that he cannot have both.

Ukraine’s Foreign Policy—A History of Balance

Developing an independent foreign policy has posed one of the key challenges for Kyiv

since the collapse of the Soviet Union in 1991. Ukrainian presidents have generally sought

a balance in their foreign policy relationships between the West and Russia. Europe and

the West are attractive to many Ukrainians. Ukraine ought to be able to develop stronger

relations with the European and trans-Atlantic communities without rupturing relations

with Russia, which are also important to many in Ukraine.

Given the large space that Russia occupies on Ukraine’s border, the long, complex history

between the two countries, cultural links between Ukrainians and Russians, and economic

ties that have continued since the end of the Soviet era, it is natural that Ukraine seek a

stable relationship with Russia. At the same time, Russia is not the easiest of neighbors.

Ukrainian presidents thus have sought to develop relationships with the United States,

Europe and institutions such as NATO and the European Union. Ukraine’s leaders have

been motivated in part by a desire to gain greater freedom of maneuver vis-à-vis Russia.

For example, Ukraine’s first president, Leonid Kravchuk, moved immediately after

Ukraine regained independence to build strong relationships with the West. When he could

not reach agreement with Moscow on the terms for the elimination of the strategic nuclear

weapons on Ukrainian territory, he involved the United States. The resulting trilateral

process successfully brokered a deal in early 1994.

President Leonid Kuchma, who took office in July 1994, established a strategic partnership

with the United States, concluded a partnership and cooperation agreement with the

European Union, and agreed to a distinctive partnership with NATO. As Ukraine’s

relations with the West strengthened, Moscow softened its approach toward Kyiv. In May

1997, Ukraine and Russia resolved the long-standing issue of basing rights for the Russian

Black Sea Fleet in Crimea on terms acceptable to Kyiv, and signed a bilateral treaty that

incorporated a clear and unambiguous recognition of Ukraine’s sovereignty and territorial

integrity—something Ukrainian officials had sought since 1991.

President Victor Yushchenko assumed office in 2005 following the Orange Revolution.

While seeking stable relations with Moscow, he made no secret of his desire to integrate

Ukraine fully into institutions such as the European Union and NATO. Kyiv opened

negotiation of an association agreement with the European Union and asked for a NATO

membership action plan. Other Yushchenko policies—including expanded use of the

Ukrainian language, seeking to have the Holodomor recognized as genocide, and support

for Georgian President Saakashvili—plus disputes over gas purchase contracts further

angered Moscow. Relations between the two countries hit a low point in 2009. But the

president failed to build elite or public support for his course; many Ukrainians grew

concerned over the downturn in relations with Russia.

Mr. Yanukovych’s Foreign Policy

Victor Yanukovych became Ukraine’s fourth president in February 2010. He believed that

“normalizing” relations with Russia should be his first foreign policy priority.

President Yanukovych met with Russian President Medvedev in Kharkiv less than two

months after taking office. At the meeting, the Ukrainians agreed to extend the Black Sea

Fleet’s basing lease for an additional 25 years. In return, Russia’s Gazprom agreed to

reduce the price that it charged Ukraine for natural gas by $100 per thousand cubic meters

for the remainder of the multi-year gas contract signed in 2009. Mr. Yanukovych and other

Ukrainian officials praised the arrangement for significantly reducing Ukraine’s energy

costs, though independent energy experts question whether Kyiv might not have negotiated

a better deal, perhaps without having to extend the Black Sea Fleet’s lease. The

government rammed the agreement through the Rada (parliament) within just a few days of

signature and with no substantial parliamentary discussion, despite opposition by the

Rada’s foreign affairs, European integration and national security committees.

At the same time, Kyiv dropped other policies that had generated Russian complaints: it

downgraded the program to promote use of the Ukrainian language, ended the campaign to

get the Holodomor recognized as genocide, and toned down relations with Georgia. While

expressing interest in maintaining cooperative relations with NATO, the Yanukovych

government made clear that it sought neither membership nor a membership action plan.

With these policies, Kyiv swept the bilateral agenda with Moscow clear of most issues that

the Russians had considered problematic.

Even before the Kharkiv meeting, however, Ukrainian officials indicated that, while their

first foreign policy priority was repairing the relationship with Russia, Kyiv planned to do

so in the context of an overall policy that pursued balance between Ukraine’s relationship

with the West and that with Russia. Senior Ukrainian officials made clear that Ukraine

remained very interested in concluding an association agreement, which would include a

deep and comprehensive free trade arrangement (FTA), and a visa facilitation agreement

with the European Union as the vehicles to strengthen Ukraine’s integration into Europe.

Ukrainian officials also indicated that they wanted a robust relationship with the United

States. By all accounts, President Yanukovych was delighted with the opportunity that he

had for a bilateral meeting with President Obama on the margins of the April 2010 nuclear

security summit in Washington.

One could see Kyiv’s outreach to the West and effort to strike a balanced foreign policy in

several developments in May and June 2010. The Rada voted overwhelmingly to approve

the annual plan for military exercises on Ukrainian territory, most of which involved

NATO forces. Ukrainian officials ruled out the possibility of joining a customs union with

Russia, Belarus and Kazakhstan, as that would be incompatible with an FTA with the

European Union. Kyiv declined to join the Russian-led Collective Security Treaty

Organization, which Moscow billed as a Eurasian counterpart to NATO.

Western diplomats in 2010 also reported that the Ukrainian government was doing its

homework to prepare an association agreement and FTA with the European Union in a

more serious manner than had been the case during the Yushchenko presidency. A number

of Western diplomats expressed the view that President Yanukovych wanted to be seen as

the one who “brought Ukraine into Europe.”

Other reports suggested that senior Ukrainian officials were becoming unhappy with

Russia’s policies. For example, Ukrainian officials questioned why Moscow continued to

pursue the South Stream gas pipeline, which would run along the Black Sea bottom and

circumvent Ukraine, when the Ukrainian gas transit system had considerable excess

capacity. As the Russians had no new gas to flow into South Stream, the pipeline, if

constructed, would only divert gas from pipelines through Ukraine.

Kyiv’s frustrations grew in 2011 as senior Ukrainian officials asserted that the price for

Russian gas—even with the Kharkiv discount of $100 per thousand cubic meters—was too

high and “unfair.” Gazprom showed no sign of budging. Ukrainian complaints increased

at the end of the year, and Kyiv informed Gazprom that it would import only 27 billion

cubic meters of gas in 2012. Gazprom officials responded that Ukraine had a “take or pay”

contract and was obligated to take—or in any case pay for—41.6 billion cubic meters.

These issues are currently unresolved. Press reports in December suggested that the

Ukrainians were considering plans that would give Gazprom significant control of the

Ukrainian gas pipeline system. Gazprom has long coveted Ukraine’s gas transit

infrastructure, but there likely would be significant resistance in Kyiv to ceding control.

Democratic Regression

Mr. Yanukovych was elected president in 2010 as the result of a process that domestic and

international observers found to be free, fair and competitive. Ms. Tymoshenko, who lost

in the run-off round by about three percent of the vote, briefly challenged the result but

offered no compelling evidence of major fraud. Western governments quickly recognized

the result, which was Ukraine’s fifth consecutive nationwide election following the Orange

Revolution to win plaudits from election observers.

Unfortunately, questions soon arose about the Yanukovych government’s commitment to

democratic principles and practices. Over the course of 2010 and 2011, concern grew

about the government’s authoritarian tendencies. Some of the most troubling examples:

 Widespread reports began to emerge in spring 2010 of inappropriate activities by the

Security Service of Ukraine (SBU), including approaching university officials for

information and reporting on students who had taken part in anti-government protests.

SBU officers also reportedly approached non-governmental organizations to seek

information on their activities.

 On September 30, 2010, the Constitutional Court of Ukraine invalidated the changes to

the constitution approved by the Rada in December 2004, after the replacement of four

judges who opposed the decision by four new judges who supported it. The result was

to revert to the constitution that had been in effect prior to the Orange Revolution,

which gave the president significantly stronger powers and weakened the authority of

the Rada. The European Commission for Democracy through Law (Venice

Commission) issued a report the following December which raised numerous questions

about the Constitutional Court’s action. The report noted “it is clear that a change of

the political system of a country based on a ruling of a constitutional court does not

enjoy the legitimacy which only the regular constitutional procedure for constitutional

amendment and preceding open and inclusive public debate can bring.”

 Ukraine held nationwide local elections in October 2010. Observers found significant

flaws, and both the European Union and U.S. government expressed concern. The

Congress of Local and Regional Authorities of the Council of Europe observer group

issued a report in March 2011 noting concern over “a newly adopted local election law

which created politically unbalanced electoral commissions, discretionary registration

of candidates and overly complicated voting and counting procedures.” The report

concluded with the assessment that “overall, the local elections of 31 October 2010 in

Ukraine met neither the standards that it wished to see, nor the standards set by the

presidential elections [in Ukraine] in January and February 2010.” The conduct of

these elections raises concern about the Rada elections to be held in autumn 2012.

 Attracting the most attention, former officials who served in the cabinet under Ms.

Tymoshenko have been arrested on charges that appear, to most observers, to be

politically motivated. Among those arrested have been former Interior Minister

Lutsenko, former First Deputy Justice Minister Korniychuk, former Acting Minister of

Defense Ivashchenko, former First Deputy Chairman of Naftogaz Ukrainy Didenko,

former Head of the State Customs Service of Ukraine Makarenko and former Economy

Minister Danylyshyn (Mr. Danylyshyn sought and received political asylum in the

Czech Republic). Then there is the case of Ms. Tymoshenko herself. She was charged

in December 2010 with abuse of state power stemming from her conclusion of the 2009

gas purchase contract with Russia. Her trial began in June 2011, and she was jailed in

August for disrupting courtroom proceedings. In October, she was convicted and

sentenced to seven years in prison—a verdict immediately condemned by the United

States, European Union, most major EU member states and Russia. The Parliamentary

Assembly of the Council of Europe, in a report issued in January, criticized the charges

against former government officials as amounting to “post facto criminalization of

normal political decision-making.” Although Ukrainian officials maintain that these

arrests were legitimate and do not represent selective prosecutions, no comparable

members of the current government have been arrested or charged, despite the general

view that corruption has increased significantly under Mr. Yanukovych.

In 2006 Freedom House rated Ukraine as the first post-Soviet state other than a Baltic

nation to achieve a “free” ranking. In January 2011, given the democratic problems within

would depend on Ms. Tymoshenko’s situation.

Thus, at the beginning of 2012, EU-Ukraine relations are at a standstill. It is not clear what

will happen with the association agreement and FTA, which were to provide the basis for a

new stage in the relationship between Brussels and Kyiv.

U.S.-Ukrainian relations are at a quiet point. Washington has few major issues on its

bilateral agenda with Kyiv, reflecting the fact that many of the problems that troubled the

relationship earlier have been resolved. More broadly, given everything else on the foreign

policy agenda, Ukraine barely registers on the radar. Ukrainian officials have over the past

18 months actively sought to arrange meetings for President Yanukovych with President

Obama or Vice President Biden, but without success. The lack of enthusiasm to meet with

Mr. Yanukovych undoubtedly reflects the U.S. government’s critical attitude toward the

democratic developments that have taken place the past two years in Ukraine.

The Risk to Kyiv

Democratic regression most destructively sets back the ability of the Ukrainian people to

have a free, fair, robust and competitive political system. It also has a destructive impact

on Mr. Yanukovych’s professed foreign policy.

Democratic backsliding puts at risk Ukraine’s relations with the West, in particular with the

European Union. As the EU President has indicated, the European Union does not intend

to proceed with signature of the association agreement and FTA until political

circumstances within Ukraine change. Even were it prepared to do so, the association

agreement and FTA must be approved by all 27 EU member states, and a number of

deputies in EU member-state parliaments have already stated that they would oppose

ratification so long as Ms. Tymoshenko remains in jail.

Moreover, given the current difficulties within the European Union, such as the eurozone

crisis, a number of member states believe that the EU’s attention should be focused

internally and that the European Union should slow the pace of its engagement with

neighboring states, particularly those which say they aspire to become EU members. For

those EU member states, democratic regression within Ukraine offers a handy reason to

justify slowing down the pace of EU relations with Kyiv. Even Kyiv’s traditional

advocates within the European Union—such as Poland, Lithuania and Sweden—appear to

be flagging in their support for Ukraine.

Mr. Yanukovych’s internal policies not only pose a major impediment to his goal of

drawing closer to the European Union, they also endanger his goal of having a balance

between Ukraine’s relations with the West and with Russia. Although Kyiv sought to

repair its relations with Moscow in 2010, the two countries’ interests simply diverge on

some issues. Take natural gas: a lower price for Ukraine means less revenue for Gazprom.

Likewise, construction and operation of the South Stream pipeline would reduce the flow

of gas through Ukrainian pipelines. Russian Prime Minister and presumptive President

Putin has called for creation of a Eurasian Union to serve as a counterpart to the European

Union. It is not exactly clear what the Eurasian Union might be in practice—and few other

post-Soviet states have expressed enthusiasm for the idea—but it is almost certain that one

of Mr. Putin’s goals is to increase Russian influence in the post-Soviet space.

With weaker relations with the West, Kyiv will find that is has less room for maneuver in

its dealings with Moscow. Tough negotiations will likely become even more difficult. Mr.

Yanukovych only has to look north to Belarus and what happened to President Lukashenko

once he had burned his bridges with the European Union and the United States following

the December 2010 crackdown on opposition leaders and demonstrators. Facing a dire

economic situation and with no hope for help from the West, Mr. Lukashenko struck a deal

with Moscow that secured a lower price for gas and a loan from Russia—at the price of

surrendering control of the Belarusian gas pipeline system to Gazprom.

It is not clear why Mr. Yanukovych is putting himself and Ukraine in this position. He has

regularly expressed a desire for closer relations with the European Union and a balanced

foreign policy. He may be allowing personal hostility toward Ms. Tymoshenko and a

desire to sideline her politically to dominate his decisions. Ironically, over the past year,

the government’s actions against Ms. Tymoshenko have focused public attention on her,

and her poll ratings and those of her party have increased significantly.

Mr. Yanukovych may also calculate that the European Union and the United States will

overlook his democratic regression and accept Ukraine without his having to adjust his

domestic policies, believing that the West does not want to see Ukraine drift closer to

Moscow’s orbit. That would reflect a fair measure of wishful thinking and overestimate

the geopolitical importance that the West currently attaches to Ukraine.

U.S. Interests and U.S. Policy

Since the early 1990s, the United States has supported Ukraine’s development as a stable,

independent, democratic state, with a robust market economy and growing links to the

European and trans-Atlantic communities. Such a Ukraine is in the U.S. interest as it

would contribute to the goal of a wider, more stable and secure Europe. It could be—and

has been—an important partner in addressing critical questions such as proliferation

challenges. The nuclear question, which dominated U.S.-Ukrainian relations in the early

1990s, has been resolved as the nuclear weapons systems that were in Ukraine have been

eliminated and Kyiv has agreed to transfer its small stock of highly-enriched uranium.

Over the past two decades, the United States has provided several billion dollars in

assistance to Ukraine to promote democratization, economic reform and the elimination of

the strategic nuclear systems and infrastructure that Kyiv inherited following the end of the

Soviet Union. The United States has led in shaping a strong partnership between NATO

and Ukraine and has encouraged the European Union to deepen its relations with Ukraine.

The U.S. interest has not changed. However, the circumstances within Ukraine have, and

the Ukrainian government is moving in the wrong direction. On democracy, it is walking

back the gains that the Ukrainian people have made over the past 20 years, particularly in

the period of 2005-2009. The West cannot and should not ignore that.

The U.S. government’s priority with regard to Ukraine now should be to encourage the

Ukrainian government to make the right choices regarding the country’s democratic

development. This means releasing Ms. Tymoshenko and allowing her to return to normal

political life. But it does not end with Ms. Tymoshenko. The Ukrainian government needs

to end its manipulation of the judicial system for political purposes against other members

of the opposition. It should rein in agencies such as the Security Service of Ukraine. And

it should work with the broad political spectrum to ensure that the upcoming autumn Rada

elections are free, fair and competitive.

To promote this objective, the U.S. government should, first of all, continue to underscore

to Kyiv U.S. concerns about democratic regression and continue to remind the Ukrainian

leadership that its internal political policies have a negative impact on its relationships with

the United States and the West. Ambassador John Tefft and the U.S. Embassy in Kyiv are

working hard to convey this message. Washington should reiterate it as often as possible,

including when Senate and Congressional delegations visit Ukraine.

Second, the United States should keep the door open for a more positive relationship with

Ukraine should Kyiv heed the message on democracy. A Ukraine that returns to the

democratic path should be fully welcome in the European and trans-Atlantic communities.

Third, the United States should coordinate closely with the European Union so as to

maximize the impact of Western policy on decisions by Mr. Yanukovych and the Ukrainian

leadership. The joint letter sent to President Yanukovych last September by Secretary of

State Clinton and EU High Representative for Foreign Affairs and Security Policy Ashton

provides just such an example of coordination between Washington and Brussels. It is

especially useful for Washington to coordinate with the European Union now, as the

European Union may be better placed to influence thinking in Kyiv.

What do these policies mean in practice? As one example, the Ukrainian leadership greatly

desires high-level contact with Washington, which gives it a degree of political legitimacy.

Mr. Yanukovych would dearly appreciate an invitation to the White House or the chance to

host President Obama in Kyiv. The U.S. government should continue what appears to be a

de facto policy of minimizing high-level meetings with Mr. Yanukovych. U.S. officials

should inform Ukrainian officials that, as long as Kyiv imprisons opposition leaders and

regresses on democracy, no meetings at the highest level will be possible.

As a second example, Ukraine’s credit line with the International Monetary Fund is

currently suspended, because Kyiv has failed to meet the conditions of the IMF loan. In the

past, the U.S. government has on occasion weighed in with the IMF to support a more

lenient approach with Ukraine. Given the democratic regression in Ukraine, now would

not be the time for Washington to take such an approach with the IMF.

This approach does not mean freezing ties across the board. Normal diplomatic interaction

should continue at most levels. The target should be the most senior leadership in Kyiv,

those who are responsible for Ukraine’s democratic regression.

As for assistance programs, the U.S. government should carefully consider its priorities,

especially as budget resources for Ukraine will be limited. U.S. assistance should aim to

sustain civil society in Ukraine, which has made dramatic gains over the past 20 years. In

this context, exchange programs that bring Ukrainians to the United States and Europe can

play a major role. The U.S. government should also continue assistance programs to

promote energy security, so that Ukraine can become less dependent on imported energy.

It may be time for U.S. and EU officials to consult as to whether it is appropriate to

consider lists of Ukrainian individuals who would be denied visas to visit the United States

and EU member states. Even the threat of this could send a forceful message to Kyiv and

have a powerful effect on President Yanukovych and the elite around him.

This is not a call for the type of isolation that the West has applied to Belarus. Ukraine has

not yet regressed to that point. But the United States and European Union should seek

effective ways to disabuse Mr. Yanukovych of the notion that he can pursue a more

authoritarian course at home without repercussions for Kyiv’s relations with the West.

Crystallizing a Choice

Some Ukrainian officials likely will warn that this kind of approach by the United States

and European Union will cause Ukraine’s leadership to turn toward Russia. Western

officials should not be taken in by this. If Ukraine truly wants to join Europe, then its

leadership must accept the democratic values that prevail in Europe. If the leadership is not

prepared to adopt such values, then how can Europe and the West integrate Ukraine?

Moreover, Kyiv does not wish to fall too closely into Moscow’s orbit. Mr. Yanukovych

does not want to compromise Ukrainian sovereignty; he wants to be the leader of a fully

independent state. The Ukrainian elite and public likewise overwhelmingly support an

independent and sovereign Ukrainian state. For the Ukrainian oligarchs—who control so

much of the Ukrainian economy—the Russian model holds little appeal.

The overall goal of U.S. and European Union policy thus should be to crystallize in Mr.

Yanukovych’s mind the following choice. He can have a more authoritarian political

system, more difficult relations with the West, and a greatly weakened hand in dealing with

Russia, or he can return to a more democratic approach and have a stronger relationship

with the West and a balanced foreign policy. In the end, Mr. Yanukovych has reasons to

opt for the latter course. The West should face him with the choice as clearly as possible.

Thank you for your attention.

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