Ukraine turns east

UKRAINE’S last minute decision to pull-back from signing a far-reaching partnership agreement with the European Union has enraged the chancelleries of Europe. Their paid press has launched a new hate campaign against the Yanukovych government, which earlier this week was battling to quell unrest on the streets of Kiev. In spite of this Prime Minister Mykola Azarov succeeded in heading off a parliamentary vote of no-confidence by the pro-EU opposition, which gained 186 votes — 226 short of the number required.

Some protesters on the streets of Kiev think that the agreement would open the doors of the EU to Ukrainian immigrants. But it doesn’t. Others believe that European integration will bring new prosperity to the former Soviet republic. But it won’t.

Though some Ukrainian oligarchs would have benefited from the EU deal, which would have also enabled them to legalise some of their ill-gotten gains, others were worried at the drop in Russian trade that would inevitably follow association. When it became clear that they weren’t going to get any EU compensation for this loss the deal was off.

Predictably Russia is once again being blamed for thwarting Franco-German plans to turn what was once the Soviet Union’s bread-basket into a neo-colony of the European Union. EU politicians say the Kremlin has put intolerable economic pressure on Ukraine to sabotage the talks. What they don’t say is that the Russian deal is better for the Ukrainian people.

The European Union’s draconian terms would destroy the independent Ukrainian economy in exchange for an austerity regime and third-rate association status. Russia is offering the Ukraine equal membership in the Kremlin’s new political and economic union, along with the former Soviet republics of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan.

Russia is offering Ukraine the chance to join the Eurasian Union -- its own version of the European Union. The EU terms specifically ruled out any Ukrainian participation in the Eurasian Union.

All Ukraine would have got from the EU deal is access to EU markets for which it has nothing to offer, while a two per cent quota would be imposed in those markets for which Ukraine does produce competitive goods.

The EU agreement would have forced the Ukrainian government to impose significant spending cuts, privatisation and economic liberalisation that would open up the country to EU imports that jeopardise Ukraine’s substantial trade with Russia, lead to much higher energy costs, decimate Ukrainian industry and even greater unemployment.

The Ukrainian communist party (KPU) has always argued against closer integration with the EU and for closer economic co-operation with their Russian and Belarusian neighbours. They are now campaigning for a referendum on joining the Eurasian Union and are collecting the three million signatures needed to trigger the procedure.

At the last general election the communist vote doubled and there are now 32 KPU members in the 450-strong Ukrainian parliament. Back in October one of them, Alexander Golub, said: “Unlike our colleagues, we have little reason to believe that signing an association agreement would bring Ukraine closer to fully-fledged EU membership.

“The EU will acquire additional markets, which cannot compete with those in the EU concerning quality and price. The EU would gain access to Ukrainian raw materials and to Ukrainian workers, who are relatively well-educated and relatively inexpensive,” while “only a select few families in Ukraine, who control trade in raw materials, would profit significantly.”