Europe urged to be 'visionary' with Ukraine

Experts from Washington have called on the EU to be more daring and propose closer ties with its large Eastern neighbour. But European Commission officials told that the current mood in Europe was not exactly in tune with such an approach.

Anders Åslund, a senior fellow at the Peterson Institute for International Economics in Washington, called on the EU to conclude an 'Association Agreement' with Ukraine.

He was speaking at a conference organised 28 May by the German Marshall Fund in Brussels.

However, such agreements have so far been concluded with countries that are now members of the EU, and candidates currently hoping to join the 27-member club were proposed so-called 'Stabilisation and Association Agreements' instead.

After the EU's 'big bang' enlargement to ten countries in 2004 and the accession of Romania and Bulgaria three years later, the mood in European capitals is not in favour of further eastern expansion. It is widely believed that Croatia, which could join soon, and the Western Balkans, which have been promised accession in the distant future, will give the Union enough to chew on for now.

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Speaking under the condition of anonymity, Commission officials told that they had to rein in attempts to develop a more visionary approach to Ukraine due to the position of key member states, including Germany.

The Commission has recently refused to allow the word 'European' to be added to its Eastern Partnership initiative, to avoid conveying the message that the partnership was a road to membership of the EU. 

But Professor Åslund said the Union should be bolder with Ukraine and called for bilateral twinning of government agencies, an increase the number of scholarships for young Ukrainians, and more financial support to be offered to Kiev.
Default 'highly unlikely'

Åslund, who served as an advisor to the Ukrainian government from 1994-1997 and whose book - 'How Ukraine became a market economy and democracy' - is just about to be published, presented an optimistic picture of the way the country had dealt with the economic crisis. He was categorical in saying that a default was highly unlikely and said the country's reserves were $25 bn, equivalent to eight months of the country's imports, providing a valuable cushion in this difficult period.

The expert also commended Prime Minister Yuila Tymoshenko's handling of the country's affairs, describing her as "an ideal crisis manager". But he advised the EU to provide more financial support to add to the $16.4 bn negotiated with the IMF last autumn.

Åslund highlighted future security risks, such as the 2017 expiry of Russia's lease of the Sevastopol naval base in the Crimea, on the Black Sea.

The expert also advised the EU to closely monitor the early presidential elections on 17 January 2010, as Russia was expected, in his words, to "buy people in all camps" to ensure its control.

He said it was "not important" who wins, as all the major players had similar programmes, calling for changes to the country's constitution to upgrade the "awful" judicial system.
Ukraine gas war 'winner'

gas war russia ukraine Åslund sees Ukraine as the winner of January's "gas war" with Russia, since Gazprom experienced a drop in orders as a result of the conflict, adding to the firm's financial problems. He added that Ukraine had benefited from the elimination of the intermediary RosUkrEnergo, while Gazprom's reputation had suffered, he said.

The expert stated that Russia had wrongly assumed that after the cut in deliveries, Kiev would not be able to deliver gas to Eastern Ukraine, leaving the country politically destabilised. In fact, Ukraine had built a small pipeline to Eastern Ukraine and deliveries were not jeopardised. Ukraine also had enough gas reserves to last three months, the expert explained.

On 1 April, Ukraine's parliament called early presidential elections for 17 January 2010. They will throw the ex-Soviet state into new political turmoil as it grapples with a shrinking economy.

Ukraine held three elections in three years from 2004 to 2007.

Viktor Yushchenko won office in 2004 after weeks of mass "orange" protests against poll fraud, ushering in policies aimed at bringing Ukraine out of the shadow of giant neighbour Russia. The leader of the Party of the Regions, Viktor Yanukovich, was initially declared the winner, but the result was overturned and Yushchenko won the re-vote.

Much of the infighting within the 'orange' camp has focused on antagonism between Yushchenko and his estranged ally of the revolution, Yulia Tymoshenko, who has twice been appointed prime minister. Tymoshenko has repeatedly called on the president to step down.

It is parliament's responsibility to name the election date, but the constitution also says the president must serve for five years, so analysts predict a long legal battle.

Ukraine has been badly hit by the world financial crisis. Its relations with its powerful neighbour Russia have also suffered as a result of the January gas crisis.