United Opposition Oblivious to Pitfalls of European FTA

January 9, 2013
Anthony T. Salvia
Director, American Institute in Ukraine

Arseniy Yatseniuk congratulated his fellow oppositionists for the collapse last month of a meeting between President Yanukovich and his Russian counterpart intended to move Ukrainian closer to the Eurasian Customs Union (ECU).

Cheekily offering to buy Mr. Yanukovich a ticket to Brussels, he called on Ukraine to ditch the ECU in favor of the European Union’s Free Trade Agreement (FTA), although he neglected to mention a single tangible benefit Ukraine would derive from such a move.

Meanwhile, the main tangible benefit of joining the ECU – a sharp reduction in Ukraine’s bill for imported Russian gas – he dismissed with a play on words: “We do not need the price of gas, we need values.” [Нам нужны не цены на газ. Нам нужны ценности.]

In other words, Europe is morally more virtuous than Russia, and that’s enough for Ukraine. Such practical, not to say, crass considerations as the price of imported gas should have no role in determining the nation’s fate.

Then, taking his cue from US Secretary of State Hillary Clinton, who recently averred that the ECU represents an effort to resurrect the USSR (frankly, I do not see what the ECU has to do with the dictatorship of the proletariat, official atheism, or the leading role of the party), Yatseniuk declared: “We do not want to return to the Soviet Union – we have already been there. For this reason, we should build our country together with our Europeans partners.” [Мы не хотим в Советский Союз - мы уже там были. И поэтому мы должны строить свою страну вместе с нашими европейскими партнерами.]

That is what the Greeks thought before their European “partners” plunged them into poverty, turmoil and despair by insisting they maintain a fixed and utterly unrealistic exchange rate with the rest of the eurozone for the sake of keeping the euro viable. Brussels would countenance no backing away from the euro lest the whole house of cards collapse.

Bulgaria, Poland and Lithuania have since declared they have no intention of following Greece in giving up their national currencies for the euro. And British Prime Minster David Cameron is expected to announce by mid-January the date of a national referendum on whether or not Britain should remain in the EU at all.

Mr. Yatseniuk needs to come to grips with the real world in which Ukrainians live: the IMF is demanding a six-fold increase in gas prices for Ukrainian households. To agree to such terms is politically impossible and morally unacceptable; and yet, to ignore the IMF’s demands is to risk blocking Ukraine’s access to world credit markets, which would necessitate a sharp reduction in government spending with untold consequences for the national economy and ordinary citizens.

Ukraine needs a deal on gas prices, and that means giving the Eurasian Customs Union serious consideration. This is a matter vital to Ukraine’s national interest and the welfare of its people.

Frankly, the spectacle of Mr. Yatseniuk taking up cudgels for Europe and the presumed superiority of its values is scarcely credible in view of his refusal to disown his xenophobic, anti-Semitic partners in the parliamentary opposition – the Svoboda faction. What could be less European than to make common cause with extremists?

On second thought, perhaps it is more European than appears at first blush.

Financier George Soros, in an article published last month in New York, invokes Greece’s Golden Dawn, Hungary’s Jobbik and France’s Front National (Svoboda’s European confreres) in warning that the political turmoil occasioned by Europe’s on-going economic meltdown “is creating a crisis of values that is now threatening the European Union itself.”

According to Mr. Soros, “the eurozone is now held together by harsh discipline; far from being an association of equals it has become a hierarchical arrangement in which the center dictates policy while the periphery is increasingly subordinated; instead of fraternity and solidarity, hostile stereotypes proliferate.”

Judging by the views of Hungarian-born Mr. Soros, the European Union would seem to have more in common with the old USSR than is commonly supposed.

Could Mr. Yatseniuk be mistaken in his assumptions? Perhaps he should give the Eurasian Customs Union a second look. Perhaps the European Union is less the paradise and panacea he imagines.