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| Tentatively, European Union Weighs Its Options on Support for a New Ukraine | Tentatively, European Union Weighs Its Options on Support for a New Ukraine |
| (6 months later) | |
| KIEV, Ukraine — The European Union’s foreign policy chief, Catherine Ashton, spent two days here promising unspecific support for a new Ukrainian government but urging it not to break close trading and cultural links with Russia. Ms. Ashton’s deft dance was inevitable — the European Union and the West are not willing or capable of bailing out Ukraine’s economy, especially if Moscow retaliates with new punitive tariffs, higher prices for natural gas and a cutoff of significant ties to Ukrainian factories and businesses. | |
| As Ukraine on Tuesday delayed naming a new interim government until at least Thursday, Ms. Ashton said at a news conference that Europe would offer “support, not interference,” and urged Ukrainians to maintain good ties with Russia. | As Ukraine on Tuesday delayed naming a new interim government until at least Thursday, Ms. Ashton said at a news conference that Europe would offer “support, not interference,” and urged Ukrainians to maintain good ties with Russia. |
| The European Union is considered to have driven too hard a bargain with Ukraine, with little obvious payoff, late last year, when Viktor F. Yanukovych, then president and now the subject of a nationwide manhunt, chose to reject a customs union and association agreement with Brussels and turn to Moscow instead for a big loan. His choice created a popular, pro-European reaction that led to his downfall, but it has not made choices any easier for Europe or for Ukraine. | The European Union is considered to have driven too hard a bargain with Ukraine, with little obvious payoff, late last year, when Viktor F. Yanukovych, then president and now the subject of a nationwide manhunt, chose to reject a customs union and association agreement with Brussels and turn to Moscow instead for a big loan. His choice created a popular, pro-European reaction that led to his downfall, but it has not made choices any easier for Europe or for Ukraine. |
| Last year, Europe underestimated Russia’s displeasure and retaliation, gave no prospect of eventual European Union membership to Ukraine and focused too much on what Ukraine needed to do to satisfy European demands rather than helping it prepare for economic change, a senior European official said. | Last year, Europe underestimated Russia’s displeasure and retaliation, gave no prospect of eventual European Union membership to Ukraine and focused too much on what Ukraine needed to do to satisfy European demands rather than helping it prepare for economic change, a senior European official said. |
| “There was no real consensus among European member states to sign the deal with Ukraine, and it was all about what the E.U. states needed Ukraine to do to sign the deal,” said the official, who requested anonymity because of the diplomatic nature of the negotiations. “We were too preoccupied with what we needed to sign the deal, and not with what they needed to do.” | “There was no real consensus among European member states to sign the deal with Ukraine, and it was all about what the E.U. states needed Ukraine to do to sign the deal,” said the official, who requested anonymity because of the diplomatic nature of the negotiations. “We were too preoccupied with what we needed to sign the deal, and not with what they needed to do.” |
| Nor does the European Union have a consensus policy on Russia, and it was late to see the effect of Russian economic and political pressure on the indecisive Mr. Yanukovych, the official said. | Nor does the European Union have a consensus policy on Russia, and it was late to see the effect of Russian economic and political pressure on the indecisive Mr. Yanukovych, the official said. |
| Now, given the revolution in Kiev, which was made to some extent under the flag of the European Union, Brussels and Washington have another chance, which Ms. Ashton means to seize. But it will be very difficult for the European Union and member states to come up with the money to bail out Ukraine when they have refused to cut easy deals for their own members, like Spain, Portugal and Greece. | Now, given the revolution in Kiev, which was made to some extent under the flag of the European Union, Brussels and Washington have another chance, which Ms. Ashton means to seize. But it will be very difficult for the European Union and member states to come up with the money to bail out Ukraine when they have refused to cut easy deals for their own members, like Spain, Portugal and Greece. |
| Ukraine says it needs $35 billion in aid and loans over the next two years, including some money needed urgently to pay outstanding debts and salaries. Some bankers, noting capital flight, say the country’s foreign-currency reserves have been reduced to about $12 billion. The value of the hryvnia, the currency, is plummeting, and the country is effectively shut out of the bond markets. | Ukraine says it needs $35 billion in aid and loans over the next two years, including some money needed urgently to pay outstanding debts and salaries. Some bankers, noting capital flight, say the country’s foreign-currency reserves have been reduced to about $12 billion. The value of the hryvnia, the currency, is plummeting, and the country is effectively shut out of the bond markets. |
| European nations and the United States have said that Ukraine must look to the International Monetary Fund for most of what it needs, even though any renewed deal with the fund would come with difficult and politically painful conditions, principally the slashing of large state subsidies for energy. | European nations and the United States have said that Ukraine must look to the International Monetary Fund for most of what it needs, even though any renewed deal with the fund would come with difficult and politically painful conditions, principally the slashing of large state subsidies for energy. |
| Ms. Ashton, as ever, was careful with what she said in public here on Tuesday. She praised Ukraine and urged reconciliation and inclusion, but did not mention specific amounts of cash. “We offer support, not interference, for the future,” Ms. Ashton told reporters, rejecting Russian claims that the West was trying to pull Ukraine away from Moscow. She emphasized “the importance of the strong links between Ukraine and Russia and the importance of having them maintained.” | Ms. Ashton, as ever, was careful with what she said in public here on Tuesday. She praised Ukraine and urged reconciliation and inclusion, but did not mention specific amounts of cash. “We offer support, not interference, for the future,” Ms. Ashton told reporters, rejecting Russian claims that the West was trying to pull Ukraine away from Moscow. She emphasized “the importance of the strong links between Ukraine and Russia and the importance of having them maintained.” |
| As for aid, she was not specific but also pointed to officials at the fund. “They will make their own decision; they have their own rules,” she said, but called them “an important part of the jigsaw puzzle of trying to offer support.” | As for aid, she was not specific but also pointed to officials at the fund. “They will make their own decision; they have their own rules,” she said, but called them “an important part of the jigsaw puzzle of trying to offer support.” |
| But the European Union’s economics commissioner, Olli Rehn, a Finn, who is perhaps more inclined to confront Russia, came out Tuesday in favor of calls for a donors’ conference on Ukraine. Speaking at a news conference at the European Parliament, Mr. Rehn said the European Commission, the bloc’s executive arm, “stands ready to provide substantial financial assistance” alongside the International Monetary Fund, “once a political solution is in place” and a new government presents a “convincing” economic plan. | But the European Union’s economics commissioner, Olli Rehn, a Finn, who is perhaps more inclined to confront Russia, came out Tuesday in favor of calls for a donors’ conference on Ukraine. Speaking at a news conference at the European Parliament, Mr. Rehn said the European Commission, the bloc’s executive arm, “stands ready to provide substantial financial assistance” alongside the International Monetary Fund, “once a political solution is in place” and a new government presents a “convincing” economic plan. |
| The European Investment Bank can also help with quick money but, Mr. Rehn noted, “E.U. resources lie predominantly with member states” — hence the idea of a donors’ conference. But there is little obvious enthusiasm among member states, many of them still in recession or just emerging from it, to pump large amounts of money into an unreformed Ukraine that has been famous for crony capitalism and corruption. | The European Investment Bank can also help with quick money but, Mr. Rehn noted, “E.U. resources lie predominantly with member states” — hence the idea of a donors’ conference. But there is little obvious enthusiasm among member states, many of them still in recession or just emerging from it, to pump large amounts of money into an unreformed Ukraine that has been famous for crony capitalism and corruption. |
| Poland, for example, which has been a key interlocutor on Ukraine, has said that it wants to see significant structural change in the country first. On Monday, Prime Minister Donald Tusk said that a stable Ukraine was in Poland’s interest. As for foreign aid, he said, “Poland will not sweat its guts out.” | Poland, for example, which has been a key interlocutor on Ukraine, has said that it wants to see significant structural change in the country first. On Monday, Prime Minister Donald Tusk said that a stable Ukraine was in Poland’s interest. As for foreign aid, he said, “Poland will not sweat its guts out.” |
| Ukraine needs to show that it can absorb foreign aid and not waste it, Mr. Tusk said. “It cannot be that we will organize huge funds for Ukraine and Ukraine will continue to waste this money by, for example, corrupt governments or oligarchs,” he said. | Ukraine needs to show that it can absorb foreign aid and not waste it, Mr. Tusk said. “It cannot be that we will organize huge funds for Ukraine and Ukraine will continue to waste this money by, for example, corrupt governments or oligarchs,” he said. |
| One European and American idea, before the unrest here, had been to create a technocratic government under Mr. Yanukovych and prop up Ukraine with a bridge loan while lawmakers worked to pass the difficult legislation required to secure a new loan from the I.M.F. | One European and American idea, before the unrest here, had been to create a technocratic government under Mr. Yanukovych and prop up Ukraine with a bridge loan while lawmakers worked to pass the difficult legislation required to secure a new loan from the I.M.F. |
| Ukraine’s money problems could worsen even faster if Russia chooses to retaliate economically to weaken any new government or to promote eastern separatism, while insisting that its existing loans to Kiev be repaid in full, on time. | Ukraine’s money problems could worsen even faster if Russia chooses to retaliate economically to weaken any new government or to promote eastern separatism, while insisting that its existing loans to Kiev be repaid in full, on time. |
| There is considerable pressure on the new leaders to name a new government that is reasonably inclusive, to soothe both the country’s significant ethnic Russian minority and a shaken Moscow. | There is considerable pressure on the new leaders to name a new government that is reasonably inclusive, to soothe both the country’s significant ethnic Russian minority and a shaken Moscow. |
| At the same time, as Andrew Wilson, a Ukraine expert with the European Council on Foreign Relations noted, the Orange Revolution in 2004 is thought to have failed because it neither dismantled the old, thuggish, kleptocratic government nor built bridges to Russian-dominated eastern Ukraine. | At the same time, as Andrew Wilson, a Ukraine expert with the European Council on Foreign Relations noted, the Orange Revolution in 2004 is thought to have failed because it neither dismantled the old, thuggish, kleptocratic government nor built bridges to Russian-dominated eastern Ukraine. |
| The mood in the still-occupied Independence Square on Tuesday was triumphant, with the economic crisis an unwelcome topic of discussion amid the smell of burning wood and rubber that recalls the long siege there. | The mood in the still-occupied Independence Square on Tuesday was triumphant, with the economic crisis an unwelcome topic of discussion amid the smell of burning wood and rubber that recalls the long siege there. |
| Nataliya, who came to help the protesters with food and medicine, said that Ukrainians were ready for further sacrifice. “We need an independent state,” she said. “Either someone comes to save us or it will be total bankruptcy.” | Nataliya, who came to help the protesters with food and medicine, said that Ukrainians were ready for further sacrifice. “We need an independent state,” she said. “Either someone comes to save us or it will be total bankruptcy.” |
| Maryna Hresko, 18, a student, said, “It’s better to sacrifice once to live better afterward,” while Konstantyn, a nationalist priest, said, “At the price of the gulag, we don’t need Russian welfare.” | Maryna Hresko, 18, a student, said, “It’s better to sacrifice once to live better afterward,” while Konstantyn, a nationalist priest, said, “At the price of the gulag, we don’t need Russian welfare.” |
| Volodymyr Dudych, the mayor of a small town near Lviv, in western Ukraine, expressed confidence in Europe. | Volodymyr Dudych, the mayor of a small town near Lviv, in western Ukraine, expressed confidence in Europe. |
| “As our friends and neighbors, they don’t really have an option,” he said. As for further sacrifices, he said, “it won’t be so painful, because it can’t be worse.” | “As our friends and neighbors, they don’t really have an option,” he said. As for further sacrifices, he said, “it won’t be so painful, because it can’t be worse.” |