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Demystifying Yanukovych’s Decision to Not Sign the Association Agreement

The confirmation on Thursday November 21st that Ukraine would not sign the Association Agreement (AA) with the EU at the EaP Vilnius Summit was accompanied by an air of inevitability which had been slowly building over the previous two weeks.

November 27, 2013 - Nicholas Ross Smith - Articles and Commentary



Merely a month ago the thought of Ukraine not signing the AA was outlandish; Eurocrats and Ukrainian diplomats I talked to expressed 100 per cent confidence in a Ukrainian signature in Vilnius. At the same time many commentators spoke of a great Russian foreign policy failure while simultaneously back-slapping the EU. How quickly the tables have turned.

Understandably, in the aftermath of Ukraine’s decision to suspend the signing of the AA, academics, commentators and journalists alike have invariably tried to understand why such an outcome came to fruition and what this means for the future of Ukraine within the broader triangular relationship it shares with the EU and Russia. The inevitable blame game that has followed has been in overdrive during the past week: some placing the blame with the EU, particularly at their overconfidence and lethargy in recent weeks; while others have blamed Russia’s coercive and zero-sum stance which escalated noticeably in the last week. Undoubtedly though, most of the blame has fallen squarely on the shoulders of Viktor Yanukovych, the often-maligned current president of Ukraine.     

The Yanukovych caricature which is popularised in Western media paints the picture of an arrogant, some have argued self-aggrandised, post-Soviet “kleptocrat” who, with the help of his Donbass cronies, runs Ukraine in an autocratic and self-interested manner. Perhaps there is some truth in this caricature; the propensity for illiberal and undemocratic action, such as selective justice and corruption, has been plain to see under his rule. Although such a scenario is clearly not uncommon in the post-Soviet setting where strong and powerful statesmen populate the terrain, beyond perhaps Putin arguably none have wholly solidified positions and cannot be treated as fully autonomous actors. Thus, to evoke a Waltzian analytical stance (although not to his neorealist extremity), too often the personalities of international leaders are given too much causal weight when considering a foreign policy decision.

Given the current geopolitical importance of Ukraine, which occupies what some would say an uneasy position as the smaller third player in a larger EU-Russian led triangle relationship, the choice for Ukraine, or for Yanukovych for that matter was tremendously difficult and convoluted. Commentators are right to lament the likely ramifications of this decision, clearly an EU-pathway for Ukraine holds greater long-term potential for the general population than pursuing either neutral or Russian routes. As Swedish foreign minister Carl Bildt aptly remarked: “they are not going West… I don’t think they are going East… I feel they are going down.”

Yet, when one looks at the choices for Yanukovcyh, in the context of the Vilnius summit, objectively, the bleak realities underlying his decision help give some rationale for the ultimate outcome. A sober and objective look at the choices on offer for Yanukovych, while not absolving the man completely, nevertheless shows that in reality his decision was heavily constrained by the competing influences of the EU and Russia as well as his insecure domestic power-base.

In the scope of the EU, plenty has already been written on the virtues of association with the EU for Ukraine and it is hard to argue that the AA, with the accompanying Deep and Comprehensive Free Trade Agreement (DCTFA), would not offer the chance of a better future for the people of Ukraine. However, as one European official from the External Action Service (EEAS) mentioned to me in an interview: “They [Ukraine] don’t get very much in return directly but what they do get is an opportunity to reform themselves.” In a nutshell, the benefits of the AA rested on Ukraine thoroughly implementing the AA legislation and requirements, a process which most expect would take at least a decade with a number of “demanding deadlines” thrown in and no “membership perspective” in sight. Given Ukraine’s history of reform in its post-Soviet existence, it is unsurprising that the same EEAS official remarked that he had “no confidence” in Ukraine implementing the agreement adequately, based on his experience with the current regime rather than an indictment on the country itself. Therefore, when objectively reviewing the benefits of Ukraine aligning with the EU, you see a lot of marginal, long-term benefits which are only attainable after a long and painful route offset by few (arguably zero) short-term tangible benefits to Ukraine right now.

On the other side of the triangle, Russia’s gradually accelerating efforts to dissuade (or coerce if you want to take it further) Ukraine from signing the AA has perhaps been undersold by some, although conversely those proclaiming a resounding victory for Russia have oversold.

As we saw with Armenia a month earlier, Russia has a geopolitical skill-set that the EU cannot currently match, particularly in the fact that it is a state (with a credible military to boot) and has a number of short-term coercive tools which have been effective in their near abroad in the past, particularly their trade and energy leverage. In the context of Ukraine’s intimation of signing the AA, Russia, moved quickly and strongly to undermine Ukraine’s progress through firstly threatening a “trade war” which would “bankrupt” Ukraine and more recently purportedly offering significant gas subsidies in order to lower the exorbitant price Ukraine was paying for Russian gas.

Additionally, although still pure conjecture at the moment, some have claimed that Russia offered as much as $20 billion extra to incentivize Ukraine’s decision to move away from the EU. Thus, in stark contrast to the EU’s offer of the AA, Russia’s counteraction is full of short-term carrots and sticks which unquestionably made the EU’s long-term incentives far less appealing and even unattainable.

Additional explanation for Yanukovych’s decision can be sought in his domestic grip on power which is not as nearly ironclad as some people have argued; although clearly he puts little weight in the opinion of the general population at the moment (which could change if popular demonstrations continue). Indeed, two domestic issues, among many, came to the fore in recent weeks which both worked against Ukraine signing the AA with the EU. Firstly, Yanukovych refused to raise the price of gas in accordance with IMF recommendations. The subsidisation of gas for influential Ukrainian businesses is an important political tool that Yanukovych uses to placate and reinforce his power-base. His reliance on this is so strong that his refusal to comply with the IMF has also cost Ukraine access to funds needed to address its faltering economy. Secondly, Yanukovych has refused to release former Prime Minister Yulia Tymoshenko, an outcome the EU has long lobbied for, partly in order, in my opinion, to harness positive PR for their normative mission. Interestingly, many Eurocrats seem to have a largely cynical perception of Tymoshenko. The demand of her release, on the face of it, looks benign but clearly Yanukovych has an insecure view of his grip on power; and is clearly something Russia, more than the EU, understands.

Therefore, the somewhat crude “quick-and-dirty” analysis performed above offers a sober rationale for Yanukovych’s decision which is free from the highly-charged emotion engulfing Ukraine at the moment. Based on this analysis, Yanukovych’s decision was indeed calculated, and arguably self-interested to a degree, but it was also undoubtedly abetted by the EU’s reliance on long-term incentives vis-à-vis the short term incentives/threats employed by Russia. Add in the domestic issues of gas subsidies and Tymoshenko and the balance tips further in favour of a decision to move away, at the current time, from EU association. States and their leaders rarely have the benefit of making decisions with the long-term in mind; it takes courage, blind faith and perhaps a dash of insanity to adopt strategies aimed at long-term fruition when the short-term implications are so dire.

Ultimately, Ukraine, under the leadership of Yanukovych, looks intent on continuing to balance between the EU and Russia, never siding completely with one in order to incite competition between the two. Such a strategy, although risky and reliant on skilled diplomacy, is likely to be the calling card of smaller third states in larger power triangles in the emerging multipolar international system; a way of using their attractiveness as a “prize” to achieve better foreign policy outcomes. Perhaps Russia, particularly given its historical experience as a pole in the Cold War and in its strong attachment to a realpolitik paradigm, currently understands this better than the EU which arguably focuses too much on projecting its benevolent (some would say Kantian) normative mission.

All is not lost for the EU, however. Yanukovych’s decision does not mean that Ukraine will completely side with Russia or proceed down a pathway towards the Customs Union, far from it. The EU has time to better equip itself (perhaps in-tandem with the IMF) in trying to secure a better deal for Ukraine. However, whether the political will inside the EU is strong enough to make the necessary concessions is highly debatable.  

Nicholas Ross Smith is a PhD candidate at the University of Auckland in New Zealand who is researching EU-Russian foreign policy competition in Ukraine. He has published a number of journal articles related to EU foreign policy, with particular focus on the EU’s interaction with Eastern Europe. His current research project explores the usefulness of examining the EU from a realist perspective, particularly in its action in Ukraine and the wider neighbourhood it shares with Russia.

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