Maidan Stands Against Putin’s Plan to Buy Ukraine on the Cheap

Publication: Eurasia Daily Monitor Volume: 10 Issue: 220

(Source: Reuters)

Typically, before delivering the annual address to the parliament, President Vladimir Putin takes a pause in order to build up expectations and create the impression of thoughtful work being carried out along crucial guidelines. Last week, however, the Kremlin staged a series of public events with carefully selected target groups—from students to activists of the so-called Popular Front, which unites loyalists of various social organizations—so that there are hardly any questions left about the content of the speech that is due to be delivered on December 12 (Nezavisimaya Gazeta, December 6). The main reason for this pro-active engagement with his support base, which habitually feigns enthusiasm, is not the need to explain Russia’s economic underperformance or to justify the persecution of the opposition “rebels,” but the acute desire to dispel the worries about the new wave of protests coming from Kyiv. Putin does not understand the phenomenon of an explosion of discontent and typically seeks to explain it away as the result of “hostile interference.” Nonetheless, he wants to make sure that the Ukrainian disorder produces no resonance in Russia (http://www.gazeta.ru/comments/2013/12/06_e_5786561.shtml).

He is also worried that the unexpected public support for a “European choice” could derail his master plan for keeping Ukraine in limbo and spoil the Kremlin’s triumph over the European Union’s efforts to promote the Eastern Partnership project (http://www.gazeta.ru/comments/column/lukyanov/5783785.shtml). Little evidence and few reasons exist to believe in his “imperialist” intentions to establish Russian dominance over Ukraine, but he is certainly firm set against the EU’s design to include Ukraine in its “sphere of influence” (http://polit.ru/article/2013/11/29/ssr/). In this respect, Putin’s plan is defensive rather than expansionist and is built on the premise of a fundamental incompatibility of interests pursued by Russia and the EU. The annoyance in Brussels and the anxiety in Warsaw over Russia’s “blackmail” that forced Ukraine to cancel the painstakingly prepared Association Agreement with the EU is, therefore, seen in Moscow as confirmation of success. The demands from the European Commission that Russia re-negotiate the deals with Bulgaria and Hungary on the construction of the South Stream natural gas pipeline are similarly interpreted as revenge for the humiliating setback at the Vilnius summit (Nezavisimaya Gazeta, December 6).

These geopolitical games are framed by Putin’s grand vision of a Eurasian Union tied together not only by the shared Soviet past but also by common elite interests in preserving the regimes of corrupt authoritarianism. Obsessive as it is, this vision does not make him blind to the fact that building such unity is a heavy economic burden for Russia; he is aware that the recently constructed Custom Union with Belarus and Kazakhstan produces net losses for the federal budget (Vedomosti, December 2). Pulling Armenia into this Union (instead of letting it sign an association agreement with the EU) will not add much to these losses because its economy makes up just half a percent of Russia’s GDP (Nezavisimaya Gazeta, December 4). Ukraine, however, is a different story. Even if its economy has contracted to less than 10 percent of Russia’s GDP, the money Ukrainian President Viktor Yanukovych urgently needs to ease domestic social tensions—and cannot receive from the International Monetary Fund (IMF) or its Western sponsors, who demand cuts in government expenditures—amount to a net sum of $10 billion (http://slon.ru/fast/economics/bloomberg-spaset-li-zvezda-krizisa-maykl-kheyzensteb-ukrainu-1028731.xhtml).

Putin may have promised to cover Yanukovych’s bills, but that does not mean Russia’s head of state is ready to invest heavily in the Ukrainian project. Russian mainstream media has been harshly critical of the EU stinginess in “forcing” Ukraine to accept an unprofitable association agreement but avoided any hints about Moscow’s generosity (Novaya Gazeta, December 4). The Kremlin rushed to disprove the leaked news that, at their secretive meeting in Sochi last Friday (December 6), Putin and Yanukovych allegedly agreed to a deal involving a credit line of $5 billion and a 25-percent cut on gas prices (Kommersant, December 7). The costs of expanding the Custom Union with Ukraine have, indeed, barely been calculated by the Russian government because this option has never looked practicable. Bilateral trade has fallen by about a quarter this year because Moscow has experimented with various sanctions and barriers, so their removal could constitute a “carrot” of sorts, providing that Russian customers, particularly in the defense-industrial complex, renew their orders of Ukrainian exports (RBC Daily, December 5). Putin has every reason to assume that Yanukovych has caught himself in a trap, breaking one bargain before striking another, so that Ukraine can be bought on the cheap. But the Ukrainian public’s resolute rejection of this sale, illustrated by the passionate “EuroMaidan” protests in Kyiv, elevates the problem to a whole new level.

For one thing, Putin’s “gifts” can hardly impress the students and pensioners who stand together in the chilly city squares across western Ukraine to defend their European future. But also, he cannot justify giving such meaningful aid to Ukraine to the Russian public, which is itself starting to feel the squeeze of economic stagnation. Prime Minister Dmitry Medvedev, who is always cautious not to deviate from Putin’s capricious course, has characterized Russia’s economic situation as “sour.” This odd choice of words reflects the angst of the Cabinet’s economists, who cannot disprove the trajectory of disappearing growth but have to promise recovery (http://ej.ru/?a=note&id=23914). Putin has fewer reservations about denying reality and keeps issuing instructions about improving the investment climate and combating corruption. His performance, however, has turned so stale that only 33 percent of Russians polled foresee another presidential term for him, while 45 percent want to see a new leader (http://www.levada.ru/06-12-2013/smena-vlasti-i-novyi-lider-v-predstavleniyakh-rossiyan).

In authoritarian regimes, opinion polls always err in favor of “stability,” so these figures merely indicate the trend of growing disappointment in and frustration with Putin’s leadership (Novaya Gazeta, December 3). The feelings are not hard enough yet to bring half as many people into the Bolotnaya square in Moscow as the half-million strong crowds in Kyiv’s Independence Square; but the important difference is that the Ukrainians can aim to remove Yanukovych from office in the February 2015 presidential elections, while the Russians know that Putin’s siloviki (security services personnel) will do everything possible to cling to power in the far-away elections in March 2018. It will take a determined effort of exercising the people’s power in the streets for Russia to rid itself of the clique of corrupt courtiers and to make its own European choice.