On behalf of the Institute, IIEA Senior Fellow, Marie Cross, attended the Europe – Ukraine Economic Forum in Lódz, Poland on 24-26 January, organised by the Polish Foundation for Eastern Studies, and chaired a discussion panel dealing with “Ukraine’s integration with the EU- a challenge for Europe, a homework for Ukraine”. The following is her report on the Forum.
The 9th Europe-Ukraine Forum in Lódz provided a useful opportunity to hear the views of senior representatives from Ukraine and Russia and from the other states in Central and Eastern Europe, who were among the 350 attendees which included a significant representation from the EU, US and Canada.
The Russian View
Russia was represented by both Putin supporters and critics. Arguments were put forward that the Minsk II agreement will be very difficult to implement, as President Putin is reported as seeing few incentives for Russian interests in it. Some argued is a huge urgency in the need to implement reforms in Ukraine, because only in doing so will President Putin be deprived of his strategy of attracting support from disaffected Ukrainians. It was argued that Putin has a different vision of reality to the Western view and thus dialogue is increasingly difficult because there is no common understanding between the two.
Some participants expressed the view that the West has failed to grasp the difficulties inherent in Ukraine’s transition from a totalitarian system to democracy. Russia, for its part, was convinced that the neighbourhood policy pursued by the EU would destroy the relationship within the group of former Soviet Republics. Another more balanced model could have been created, it was argued, such as that of the Franco – German model, which might have created a stable Russia – Ukraine dynamic.
On the Ukrainian side, senior officials from President Poroshenko’s office provided lengthy lists of the reforms that are underway, including: the decentralisation of powers to local authorities, 1400 new regulations adopted, 471 state owned enterprises privatised, 6000 more police officers, 65 loss-making banks closed, and many more. They are said to be working hard to implement the reforms necessary for the visa liberalisation agreement with the EU, envisaged for Spring 2016.
On the other hand, speakers at a number of sessions, notably EU and western diplomats based in Kiev, were strongly critical of the pace of reforms, citing the persisting problems of the old Soviet-style administration of Ukraine and the need for reform of the civil service. The lack of professionalism and effectiveness of the Ukrainian civil service was deemed to be a greater problem than corruption. Ukrainian officials, in response, referred to the new Civil Service Act which is aimed at redressing these issues and is about to be passed by the Ukrainian Parliament. Many speakers referred to the need to garner support from all strata of Ukrainian society in implementing reforms. A number of EU representatives also referred to the powers of the oligarchs, with one alleging that 70% of the Ukrainian economy is controlled by just four oligarchs, which mitigates any possibility of reform.
Security and Defence
In the security and defence area, a number of presentations made the argument that the Maidan crisis had in fact saved the EU from being taken unawares by Russia’s growing military capacity, and it was argued that Europe needed to wake up to its own security. Many in the EU did not anticipate the events in Crimea and Eastern Ukraine, but it should have come as no surprise to European leaders that Russia, with its close control over internal affairs and its intensive military reform programme since 2008/2009, was testing NATO. The Yanukovych presidency was a “classic attempt to annex Ukraine without using military means” according to one speaker. Only the emergence of Ukraine as a successful state, politically and economically, could change the situation with Russia. The most important issue from a Ukrainian perspective is that of leadership in the West – in particular from the US, Germany and Poland.
Some European participants argued that the EU did not want conflict with Russia and that we should work towards improving Russia-EU relations. A western ambassador based in Kiev praised the “huge achievement” of the Ukrainian military in opposing the Russians in the East with poor equipment and military resources that had been neglected for decades. Ukraine’s communications were also improving, he said, but he expressed concern at the sentiment against dialogue with the Russians: Europe should, he said, press the Ukrainians to get a dialogue going for the post-conflict period, otherwise the future will be very difficult.
The European Union
A number of speakers, particularly from Central and Eastern Europe, also expressed anxiety about the future of the EU itself, particularly in light of the huge challenges it faces at present. These issues were not considered in any depth, although on the refugee crisis, the Polish foreign minister strongly criticised those who denounced Poland for not taking in refugees, suggesting that this criticism ignored the number of Ukrainians who had come to Poland. A number of speakers said that the most important threat to the EU was the rise of nationalism. On a final note, a view was expressed at the forum, one which is supposedly held by many in Eastern Europe, that the EU is the “political wing of NATO”.
After hearing the many presentations, one was left with the impression that, while there is a cadre of reformers at political level in Ukraine – backed up by committed officials – who are pushing the necessary changes, the old style politics and interests are proving almost impenetrable barriers to real change. They have not yet broken the grip of those who control the levers of economic power, with their corresponding sway over the Ukrainian political system.