Reasons behind Ukraine’s EU trade deal refusal

Supporters of the deal have increased pressure on the government during Yanukovych’s visit to Russia to boost economic cooperation.

Although Ukraine is viewed as having great economic potential, it faces many problems including reduced growth and high unemployment and inflation rates.

If Ukraine signs a trade deal with the EU, the EU would remove 98% of its tariff barriers for Ukrainian goods to enter Europe, giving Ukraine approximately half a billion Euro every year. In return, Kiev will have to reduce its budget deficit and increase gas prices.

Meanwhile, Russia has promised to invest tens of billions of US dollars in Ukraine. This means Ukraine would receive either long-term benefit from the EU or immediate benefit from Russia.

That’s the reason why Yanukovych refused to sign the deal to increase relations with the 28 EU members, which is supported by half of Ukraine’s population.

Political tensions without an end

Yanukovych has apparently been unable to foresee the serious consequences of his decision. The situation in Ukraine is getting out of control with a worsening political crisis and national unity split.

Thousands of people have taken to the streets to express their anger at the government’s decision. They have demanded that those who gave the order to repress protesters stand trial. They also demand the release of political prisoners, including former Prime Minister Yulia Timoshenko and the dissolution of the government.

Protesters have blocked streets leading to government buildings including the Security Agency, the Foreign Ministry, and the Central Electoral Commission.

The opposition says it is preparing for another mass protest after 300,000 people flooded the main streets of Kiev last weekend. Supporters of the President and cooperation with Russia have, meanwhile, demonstrated near the Parliament building.

Yanukovych dismissed Kiev Mayor Alexandre Popov and Deputy Secretary of the National Security and Defense Council Vladimir Sivkovitch after repression of protesters occurred on November 30. He warned that he will fire the officials who drafted the deal with the EU and said that the agreements he signs with Russia during his visit will not include documents relating to the Customs Union.

Prime Minister Mykola Azarov has rejected an allegation that Ukraine is inclining toward Russia and other former Soviet republics. The parliamentary group of President Yanukovych’s Party of Regions demanded on December 16 that Prime Minister Azarov replace 90% of the government excluding the Prime Minister himself.

Signs of East-West confrontation

Yanukovych’s decision has not only undermined Ukraine’s relations with the EU but created an excuse for the US to get involved because of the repression of protesters. US Vice President Joe Biden expressed his concern in a telephone conversation with President Yanukovych.

Some US officials including Senators MacCain and Murphy have even joined a number of recent protests in Kiev. The senators said that Ukraine’s future depends on a unified Europe. Observers say that US interference is not merely a reaction but a sign of East-West confrontation.

Since the end of the Cold War, the US and its allies have tried to get former Soviet republics out of Russia’s control. This policy has proved effective as many of these countries have joined NATO and the EU. Just a few countries including Ukraine have opted to remain under Russia’s control for political and economic reasons.

Since the Orange Revolution in 2004, Ukraine is facing its worst political crisis. Reversing the situation with solutions to balance the interests of all parties involved is proving a difficult task for Yanukovych.