To the outside world, Ukraine has scored a diplomatic own goal with its imprisonment of former prime minister Yulia Tymoshenko. The government was forced to cancel a summit in Yalta planned for early May, when many invited heads of state declined to attend after Tymoshenko began a hunger strike, complaining prison officials had beaten her. The signing of an association agreement with the European Union has been put on ice, and politicians are threatening to boycott the Euro 2012 football tournament that Ukraine will co-host this month.

To the outside world, Ukraine has scored a diplomatic own goal with its imprisonment of former prime minister Yulia Tymoshenko. The government was forced to cancel a summit in Yalta planned for early May, when many invited heads of state declined to attend after Tymoshenko began a hunger strike, complaining prison officials had beaten her. The signing of an association agreement with the European Union has been put on ice, and politicians are threatening to boycott the Euro 2012 football tournament that Ukraine will co-host this month.

It is unclear whether the Ukrainian regime fully understands the international outcry over Tymoshenko’s imprisonment. President Viktor Yanukovych has refused permission for Tymoshenko to receive medical treatment in Germany for a chronic back complaint, and has suggested ‘a pause’ in relations would do both Ukraine and Europe good. In mid-May, he went to Moscow for talks with returned Russian President Vladimir Putin – although the hint that Kyiv would draw closer to Russia in the face of Western coolness was more muted than it might have been.

Tymoshenko has been in detention since October 2011, after a trial that was widely condemned as politically motivated. While she is a controversial figure, having amassed great wealth through gas trades in the early 1990s, her seven-year sentence for ‘abuse of office’ in signing a gas deal with Moscow in 2009 has elicited widespread sympathy. And though Yanukovych may welcome having his main political rival out of action before parliamentary elections later this year, he has admitted he miscalculated the reaction.

The EU responded last December by delaying the signature of an association and free-trade agreement with Ukraine, and – despite then initialling part of the document in March – has since put it on indefinite hold.

When he visited the IISS in London in April, Foreign Minister Kostyantyn Gryshchenko appeared to suggest that his country would muddle through the controversy. However, Ukraine risks becoming a pariah just at a time when its economy faces continuing difficulties stemming from the 2008 financial crisis. The country will need Western backing if it is to unblock $15 billion in IMF loans and to meet its debt repayments for an earlier $3bn IMF loan. It is also bogged down in negotiations with Moscow on gas prices. As Russia tries to persuade Ukraine to join its customs union with Kazakhstan and Belarus, Kyiv finds itself in an increasingly weak bargaining position.

As living standards have declined, so has the domestic popularity of Yanukovych’s Party of Regions (PoR) and there have been tensions within the regime, particularly between the presidential clique and Prime Minister Mykola Azarov over control of the federal budget. While predictions that Ukraine will face a new Orange Revolution this year may be a little extreme, Yanukovych recently appeared to prepare for the possibility by appointing loyalists to key security posts.

Having installed himself at Mezhirya, a luxurious 40-hectare estate outside Kyiv, he is said to be eyeing another term after presidential elections in 2015. Not all Ukrainians, however, share this long-term vision: the ‘Russia without Putin’ slogan heard at recent opposition protests in Moscow has been appropriated for local use as ‘Ukraine without Yanukovych’.

A sour Orange Revolution

‘Lady Yu’, as Tymoshenko is sometimes known, is an iconic politician. Blonde braid wrapped around her head, she shot to international fame as one of the leaders of the 2004 Orange Revolution. Protests sparked by electoral fraud in that year’s presidential elections led to the annulment of Yanukovych’s ‘victory’; a new vote was won by Tymoshenko’s new ally, Viktor Yushchenko, who appointed the former ‘gas princess’ his prime minister.

But Tymoshenko and Yushchenko soon became locked in a power struggle, and the Orange era faded into a mass of recriminations and bitterness. International observers agreed that Yanukovych won the January 2010 presidential elections fairly. However, his era of ‘managed democracy’ has attracted much criticism. The president and his party rapidly rolled back constitutional reforms to give themselves more power, rigged electoral laws in their favour and undermined press freedoms.

Economic reform has been slow, and political interference in the judicial process has reportedly increased. Yanukovych has denied having any sway over Tymoshenko’s trial, but many observers see the Ukrainian prosecutor’s singling out of the ex-premier and several more of Yanukovych’s foes as a very selective application of justice in a country where few politicians have a completely clean record.

Others sentenced to jail terms include former interior minister Yuriy Lutsenko (given four years for paying his driver ‘illegal’ bonuses), ex-defence minister Valeriy Ivashchenko and former environment minister Heorhiy Filipchuk. The glare of international publicity has fallen most strongly, however, on Tymoshenko. Although she is a very astute politician, not everyone has been willing to see her as a martyr. Nevertheless, comparisons to Joan of Arc and imprisoned Russian oligarch Mikhail Khodorkovsky persist.

The Donbass clan

The president’s pursuit of Tymoshenko and other political rivals may seem baffling, especially as it has put her back into the global spotlight and sparked so much condemnation. Part of the explanation is the cronyism surrounding his regime.

Yanukovych emerged from the heavily industrialised, coal-mining, pro-Russian Donbass region in Ukraine’s east. Strong associations forged in his time as governor of Donetsk Oblast between 1997 and 2002 include those with Ukraine’s richest man, Rinat Akhmetov, and oligarch Dmitry Firtash. The latter is a major partner in RosUkrEnergo, the gas-trading intermediary that lost the lucrative monopoly to supply Russian and Central Asian gas to Ukraine after Tymoshenko’s 2009 deal with Moscow. Firtash is a leading figure in the ‘gas lobby’ close to Yanukovych, whose other members include Energy Minister Yuriy Boyko, Finance Minister (and former secret service head) Valeriy Khoroshkovsky, and presidential chief of staff Serhiy Lyovochkin.

The president’s associates are frequently referred to as the ‘Donbass mafia’. Although Akhmetov and Firtash deny any alleged links to organised crime, Yanukovych has always appeared happy to promote allies and award contracts to loyalists. Indeed, as the president has grown more embattled, he has retreated to an inner circle of simya, or family. His older son Alexander, a businessman, recently joined the ranks of Ukraine’s ten richest people, while younger son Viktor Jr is a member of parliament.

The macho nature of this ‘clan’ makes it easy to view Tymoshenko’s case as a personal vendetta. However, revenge on Tymoshenko may simply be one element of a wider Donbass strategy. Mykola Tomenko, a deputy parliamentary speaker, told the Kyiv Post that he believed Tymoshenko’s jailing was an attempt by pro-Russians in the president’s circles ‘to deliberately exacerbate the situation’, adding: ‘This absurdity aims to prevent the ... association agreement with Europe.’

Conversely, the oligarchs among Yanukovych’s allies are unlikely to embrace closer ties with Moscow. What the gas lobby most wants, respected analysts such as Vitaliy Portnikov suggest, is to keep Ukraine in a ‘grey zone’, between Europe and a Russian-led customs union. There, its members may continue their self-enrichment unhindered by reforms that may bring transparency or a stronger rule of law, on the one hand, or bind them to moribund economies like Belarus’s, on the other. Most probably, University of Alberta professor David Marples agrees, Yanukovych is ‘being prodded and pushed by powerful interest groups whose goal is to keep Ukraine free from economic ties so that they are left free to amass wealth’.

Between Moscow and Brussels

Such a non-aligned stance is nothing new for Ukraine, a country not only on the border of the EU and Russia, but also split between a pro-European west and a Russian-leaning east. Under Leonid Kuchma, its first president after gaining independence in 1991, it pursued a ‘multi-vector’ foreign policy often referred to as ‘milking two cows’. This involved trying to win agreements and trade from either Moscow or Brussels, with the implicit threat that a refusal would lead Kyiv to move closer to the other bloc.

Yanukovych has attempted the same double bluff. However, with both the EU and Russia now weary of the ploy he has lacked the political skill to extract much from it. His overtures to China have reaped little, and Ukraine has not recently been a US foreign-policy priority.

Early in his presidency, after a brief trip to Brussels, Yanukovych attempted to repair relations with Russia, which had been badly damaged under the Yushchenko presidency. In April 2010, he controversially extended the lease of Russia’s Black Sea Fleet in Sevastopol, Crimea, by 25 years to 2042. Two months later, Ukraine officially abandoned its bid to join NATO.

Yanukovych made these concessions in the hope of altering the terms of Tymoshenko’s 2009 gas deal with Russia. The ten-year deal was welcomed at the time by the EU for restoring gas flows to Europe, and it introduced the first clear formula for calculating Ukraine’s gas price, by linking it to the cost of gasoil and black oil. But it set basis prices at an unsustainably high level and has since become a burden on Ukraine’s economy.

Moscow responded to the 2010 extension of the Sevastopol lease with a small gas discount, which rising energy prices have now largely eroded; at the start of 2012, even with the discount, Ukraine was paying nearly as much as Germany at $416 per 1,000 cubic metres. (Close Moscow ally Belarus pays $164; but the average price for Russian gas in Europe stood at around $390 in 2011.) Yanukovych is seeking cheaper gas for several reasons. These include appeasing associates like Firtash, who is now a major gas customer as a leading player in the fertiliser industry, and avoiding a rise in household gas prices before parliamentary elections.

Since cutting costs by unilaterally reducing the volume of gas it buys from Russia, Kyiv has found itself locked in protracted negotiations with Moscow over the wider issue of gas import prices. The Kremlin might reduce the price further were Ukraine to join its customs union, become part of a proposed Eurasian political union, or relinquish control of the gas-pipeline network that transports gas across its territory from Russia to Europe.

Disappointed with the high price of Slavic solidarity being offered by Moscow, the president turned instead to Europe. His eventual freezing out by the EU did not strengthen his hand with Moscow, however. Instead, he found that even Putin, as the Russian co-signatory to the 2009 gas deal, defended both Tymoshenko and the agreement (although the Russian president will surely be happy to exploit any ongoing EU–Ukraine differences, just as Moscow has been happy to exert subtle pressure on Ukraine via trade skirmishes such as the recent ‘cheese war’). Whether or not he means it, Yanukovych has recently sounded more amenable to joining Moscow’s customs union.

October elections

Tymoshenko’s imprisonment has isolated Ukraine’s most popular opposition leader, but has also galvanised a traditionally fractious opposition into an attempt to unite. The two leading opposition parties, Tymoshenko’s Fatherland and the Front of Changes led by former parliamentary speaker Arseniy Yatseniuk, announced in late April that they would join forces to challenge Yanukovych’s PoR in the October parliamentary elections.

Despite poll figures that show their coalition narrowly in front, however, voting arrangements will make it difficult for the opposition to win more than half of the 450 seats in the Verkhovna Rada. It will almost certainly win the 225 seats elected by proportional representation from party lists, but will be at a disadvantage in simple majority districts, where PoR can afford lavish campaigns or persuade individual candidates to join it. Champion boxer Vitaliy Klitschko who is leading the Strike party has not yet joined this ‘united opposition’, believing his grouping will perform better outside it.

Although the president makes ministerial appointments and his party’s control of parliament is not yet seriously threatened, Yanukovych’s recent appointment of loyalists to head the National and Security Defence Council, the Defence Ministry and the SBU internal security agency (successor to the KGB) has heightened fears of upcoming electoral fraud. It also betrays insecurity within the administration about its position.

Ever-decreasing circles?

The Yanukovych government has so far ignored Western exhortations to free Tymoshenko, instead delaying her appeal and bring new charges against her. It has demonstrated some concern about the increasing damage to Ukraine’s reputation by hiring public-relations consultancy Burson-Marsteller, but this tactic also points to a regime more interested in persuading others to see things its way, than accepting any outside criticism.

Tymoshenko seems unlikely to be released in the near future, although Ukraine’s changeable political landscape makes predictions hazardous. Her absence from the political scene is more important to Yanukovych than his self-declared ‘top foreign-policy goal’ of setting Ukraine on a path to European integration. He has hinted at a presidential pardon, or a repeal of the law under which she was convicted, but whatever the circumstances, Yanukovych will worry that releasing Tymoshenko will make him appear weak.

Ukraine has been performing a balancing act between Europe and Russia since independence, and there are sound reasons for it to keep a foot in each camp. The country is economically interdependent with both its neighbours. However, properly managing this balance would test even the most talented politician, and Yanukovych, often ridiculed for his poor Ukrainian-language skills and convictions for assault, is not one. There is a danger he is running out of room for manoeuvre. Increasingly isolated abroad and lacking domestic legitimacy, one thing he must do is keep his allies on side.

Boycotts of the Euro 2012 football tournament may not concern the oligarchs around Yanukovych very much. Denying certain individuals visas to Europe, as some have suggested, might be more effective. However, the consequences of this are unpredictable. Meanwhile, one thing on which every commentator agrees is that ordinary Ukrainians are the losers. Many are disillusioned and distressed to see democracy sliding backwards in their country.

Online Access & Digital Download £5.00
Product variations
Online Access & Digital Download £5.00 (Inc VAT if applicable)
Back to content list

Merkel 4.0: not so different after all

German Chancellor Angela Merkel will lead a new coalition government that has diluted her power and produced low expectations, amid considerable domestic uncertainty and foreign policy challenges.

Zimbabwe after Mugabe

Robert Mugabe’s legacy of authoritarian misrule will be difficult to expunge. President Emmerson Mnangagwa appears determined to utilise the army to ensure party victory in forthcoming elections.