Is Europe Still Committed to Being Whole, Free and Prosperous?

Ukraine’s Quest for Mature Nation Statehood Roundtable XII:
“Compelling Bilateral Ties/Poland-Ukraine & Turkey-Ukraine”

Is Europe Still Committed to Being Whole, Free and Prosperous?

James Sherr

Remarks by James Sherr, Chatham House Senior Fellow, delivered at Ukraine’s Quest for Mature Nation Statehood RT XII: Compelling Bilateral Ties/Poland-Ukraine & Turkey-Ukraine, held in Washington DC on October 20, 2011.

As has already been noted, this year is indeed the 20th anniversary of the independence of Ukraine. I wish I could say that that was a cause for celebration; I think in view of recent circumstances it would be fair to say that the 20th anniversary of Ukraine calls rather for considerable reflection. And many will be asking whether it’s also an indication for expressing some foreboding. There is inside the EU today not only foreboding but a sense of numbness, not only about the Tymoshenko verdict but the change of tone that we have heard very recently, from the very highest level of the Ukrainian state, regarding this entire matter and the future of Ukraine’s association prospects. I am sure that those that have come here are interested in my perceptions about these developments and how they will evolve. But, if I were to dwell upon this entirely I would be doing the subject and you a huge disservice.

There is a wider context here and in the 20 minutes I have been asked to speak-I hope that is not too objectionable for the forum participants-I think it would be fair to spend half of that time exploring this wider context. And we all know what it is. Most of you say that “well, it’s the global financial crisis”, but I want to introduce a new dimension from the very beginning. As far as Ukraine’s relationships with Europe are concerned, the ‘Euro’ crisis will have a far deeper bearing than a global financial crisis. The financial crisis that so frustrated the United States and has been unfolding since 2008 did not unsettle the confidence of the European Union. But the ‘Euro’ crisis is not only unsettling confidence but is forcing members of the EU to revisit their most basic assumptions, and that has to effect all the other issues and, in particular, issues of Ukraine’s efforts at integration, whether we want it to or not. So let me be as concise as I can; let me just express the possible controversial points.

The ‘Euro’ project, the establishment of the ‘Euro’ as a single currency, is not only an expression of confidence inside the EU; from today’s factual point, it looks also like the expression of hubris. The EU is entitled to a degree of hubris. Before this crisis erupted, I certainly would have said, and many would have said, without any equivocation, that the European Union had become most formidable and beneficial force for integration on the European continent. And that certainly became clear with enlargement. Many inside the EU believed that the enlargement of the EU to take in countries that only recently had command economies and more or less totalitarian systems would damage the EU or destroy it. And there was this big argument between merits of further deepening the integration of countries that were already integrated and wider integration expending the EU’s influence in Europe. And the verdict on the process occurring was: “we now have both; we can have deeper integration and wider integration”. One thing that did is that it changed the entire tone of character and atmosphere of the relationship between the EU and Ukraine. It created a predisposition not only to deeper advancement but to draw closer to Ukraine, irrespective of the question whether at some point Ukraine will actually become a member of the EU. It led to more creativity in doing something the EU refuses warmly to accept at the start, which is to make the map divisible, so that essentially Ukraine and other countries (Eastern Partnership countries) could contract into part of it, get very real benefits, share those benefits with Europe and at the same time limit Europe’s liability in a way that full membership would not. And there was immense amount of optimism about all of this.

Now what is the significance of ‘Euro’ crisis within its borders? It is not in its respect simply about horrible economic figures, unemployment and all the rest of it. It has to do with basic assumptions. The ‘Euro’ was established without the existence of the unified fiscal authority in Europe. And what is what we now see is that it was established between economies that were far less compatible that our orthodoxy led us to believe. Even without the unified fiscal authority, many of us and I certainly would believe that if the Euro had been confined to a new greater Hanseatic league Germany, Scandinavian, Benelux countries, Britain-if it wanted to opt in, Austria and, under the right leadership, France, there would be no crisis of the ‘Euro’ today. The difference between Sweden and Greece is not the difference, as many people assume, between countries that have lean, liberal, free market economies and countries that are much more socialistic. I mean after all, Scandinavia is the model of the “cradle to grave” welfare state, but the “cradle to grave” welfare state is paid for; it is a social choice of its funders. The dispensation in Greece has not been funded for a very long time and behind that difference there is a great many others, and when you look at all of this, therefore, you begin to think that even inside the structure, among some of the old members of the European Union, there are major economic differences and incompatibilities and that the economies are not necessarily converging.

As you absorb that, you are likely therefore to be far less ambitious and far more skeptical about any further projects, including Ukraine and the Eastern Partnership. You might therefore conclude that EU has no appetite for further integration. But the truth is that that’s not what has been happening. Until the day before yesterday, and I am not the first person here to notice it, the whole project of the Association Agreement and with it the Deeper Comprehensive Free Trade Area has been going forward-uninterrupted until the 11th of October! Now why is that? There are three key reasons why, I think, this has been going forward despite everything else that has been happening; it’s a miracle that this has been happening that way, but it has.

The first, though EU is not comfortable talking about it, post enlargement, the EU understands it has a geopolitical character and it is in part a geopolitical project with geopolitical interests, and there are very serious implications if Ukraine is left unattached and even more serious implications if the whole grand Russian design-which still Prime-Minister Putin has now given an even further spin with his plans for a Eurasian Union-come to fruition. This has significance for all of Europe. That is number one.

Number two, the driving force this whole project has not been the EU as such but specifically the European Commission. The interesting thing about the European Commission is that today it has a more energizing role inside the European Union than the international military staff now have inside NATO. The commission has a belief in doing things and it has an authority to do things that NATO headquarters does not have the authority to do, and it doesn’t. And we look recently at the investigations that have been opened by the Directorate General of Competition against ‘GAZPROM’ and a number of its European partners to see what this means. The European Commission does not follow consensus in Europe; it has been leading it and it has been doing so here.

The third reason is that there has been a deep-seeded belief, that irrespective of some erosion of democratic standards inside Ukraine and irrespective of differences of perspective between Ukraine’s elites and those of the EU, the whole process of Association, in the way it is engineered, will impel Ukraine’s elites to embark on the course of transformation that will be beneficial whether they want it or they don’t want it. And for reasons I do not have time to go into, I find this belief very questionable, but very deeply rooted.

Now that another basic premise has been attacked-which is the democratic foundations of Ukraine, we now find ourselves in a very different place, so let me by nature make a few points about I think the present situation is viewed.

President Yanukovych reminded Brussels very recently that Ukraine is an independent state; he did not need to remind Brussels of this. The EU, at present, is reminding itself and I think we have not always been clear enough on reminding our Ukrainian partners that the European Union is a ‘union of sovereign states’. And, as it has been noted by my American colleague, it is a ‘union’ based not only on interests but values. The point about values is that these values are not just pieties; they are expressed and reflected on the day to day basis in the way institutions work, in cultures of administration and cultures of business. And if you are not part of this network of our understanding of values, if these things are not understood or believed in, it is perfectly possible to have cooperation, it is perfectly possible to have good relations, it is perfectly possible to have various sorts of partnership, but the integration is not possible on that basis. Its simply not possible because it would not be beneficial to either party-and this is something well understood and we are being reminded of it now.

Now, the second thing that people are reminding themselves at the present time is for a numbers of years and most empathically since the Orange Revolution, Western governments have stated emphatically and sincerely that whatever happens in Ukraine or anywhere else for them the bottom line when it comes to integration-the bottom line and the red line is the integrity of the democratic system in Ukraine and further democratization of that system. There are not illusions inside the European Union today about Yuliya Tymoshenko or about any other political figure, and there are not that many who regard her and her status of conduct at various times as being appreciably different from those of anyone else including people presently in power. That is not seen as in any way the issue, nor are people inclined to contest the validity of any charge brought against her in the proceedings that we have witnessed. But however you look at this, and however varied the views are inside the European Union, there is a unanimity view that this whole process has been carried forward by political authorities for political reasons rather than by legal authorities for legal reasons. In addition to that, anyone following this has been struck by the almost comic opera lack of coherence and consistency to these narratives. How can it be illegal-how can a 2009 Energy Accord that was concluded between Tymoshenko and Putin and amended afterwards-be illegal, when President Yanukovych reaffirmed the legality of those accords in the Kharkiv Accords that he concluded in 2010. He has reaffirmed the validity of those accords. Kharkiv was based on these flaws about which she on trial. If it was illegal for her to not consult the cabinet, why is President Yushchenko not on trial, because in by any standard the agreement put together in January 2006 was more opaque and involved less discussion, and entirely excluded the whole machinery of the National Security and Defense Council and other bodies of government to an even greater extent than she did? And if so-if to a far greater extent than she-why is he testifying against her and why is he not on trial himself? If her actions in 1994 were heinous and they might be, why is it that these charges were never raised after 1994, but they have been only produced for periodical intervals when it was politically convenient for somebody, and then when the political issues were resolved, the charges were promptly withdrawn. None of this escapes anyone and there is no disagreement in the EU about what this means.

My final point chairman is this: the arguments today are along the following lines, -and they are not even arguments but the beginning of discussions. The view which fortunately has very little currency but has been expressed very clearly by some prominent and highly respected analysts in United States and Europe is that there should be no inconsistency in our policy between Ukraine and Belarus and the EU must stop to consider the range of sanctions against Ukraine if the process of eroding democracy comes further. The only inconsistency, and this is well understood inside the EU, would be to establish a false consistency between Ukraine and Belarus because Ukraine is not Belarus. The gap between best and worst practice of the two countries is fundamentally different, the dynamics are fundamentally different, and I think I can confidently say that there is no serious discussion in the EU about enforcing such a policy which would call into question the sovereignty of Ukraine and its independence which no one questions.

The second argument, though, which one hears from certain members is, that irrespective of what happens, if we have a chance to conclude this Association Agreement we must because otherwise the situation in Ukraine will be worse, President Yanukovych will feel more isolated, and he will have no alternative but to go to Russia. But if that argument applies now, why should it not apply equally after Association Agreement is concluded if President Yanukovych then decides he will not implement it. At any point, and at many points in the past 20 years, it has been always possible to say that if you insist upon your principles, we can forget about the European Union and go to Russia.

And that is why there is a third argument that is becoming much stronger than it has been in the past which is the following: if Ukrainians decide that it is in their national interest to integrate to Russia, the EU can only say that: “well, if that is your decision God bless you and the best of luck to you”. We will not compromise our own interest or question your national interest; that is something for you to decide. That is where the discussions are at the moment, but there is a sense today that something has changed and it is likely that there will be further changes. Let’s hope sooner rather than later there will also be some answers. Thank you very much.