“Imperialist Putin “Steals” Ukraine”… If only all those hysterical newspaper articles were true!

In reality, the only thing he stole was Ukraine’s credit card debt. He’s no idiot, of course, and is in no rush to pay it off. The drama certainly hasn’t ended. But a geopolitical pivot on the model of Khmelnitsky’s 1654 decision this is not.

Let me try to explain the actual motivations of everyone involved:

(1) The EU wants the Ukraine. No, have to be more precise. The Poles, Balts, Swedes, and Anglos want Ukraine in the EU, without Yanukovych. Scratch that. They want Russia without Ukraine without a Yanukovych. As long as Ukraine politely waits in the queue alongside Turkey and Egypt and all those other peripheral countries enjoying the glories of “European civilization” with Associate memberships, all is well.

(2) Putin wants a weak Yanukovych – because Yanukovych is loyal to his oligarchs, not Putin (duh!) – in control of Ukraine. He also wants Ukraine in the Customs Union. (But not its credit card debt). To do this he has been applying pressure, with Russia banning the import of Roshen chocolates, which belong to a particularly outspoken proponent of the EU, the oligarch Petroshenko. There are warning that EU Association will mean the setting up of tariffs on Ukrainian imports (Russia does not, after all, wish to have to compete with European goods on level territory at this stage). Russia’s long-term goal (with the Eurasian Union) is gradual convergence with EU standards, and eventually even integration. But that is very far off (2040’s maybe). The greater the scope of the Eurasian Union, the more advantageous the terms on which said integration can occur. There is no hurry.

(3) Yanukovych wants what the Donbass oligarchs want. The Donbass oligarchs want to legitimize and secure their wealth by integrating into Western institutions. But the Donbass oligarchs also want their main protector to remain in power. And unfortunately, things like raising gas prices by 40%, salary freezes, and big spending cuts – as demanded by the IMF in return for loans – is going to collapse whatever remains of Yanukovych’s support in the east and south. And why does the EU/IMF demand such stringent concessions? See above. They want a Ukraine without Yanukovych! It’s all logical.

Hence, when PM Azarov says that the decision to suspect the EU deal is “tactical,” he is in all likelihood saying the truth – as opposed to opposition claims that it is all some kind of elaborate conspiracy concocted with Putin to deny Ukraine its “European choice” and return it to imperial moskali domination.

It is also worth noting that during much of the summer, Ukrainian TV channels were propagandizing the benefits of EU association. This is presumably what caused support for the EU to start exceeding support for the Customs Union/Eurasian Union. It would have been exceedingly stupid and irrational to carry out this information campaign with the ultimate intention of performing a volte face and turning back to Russia. It would just piss off the Ukrainians who had become more energized about Europe. An own goal. Why would they possibly do it?

Now that we have a more realistic idea of how things actually work – as opposed to the fanciful tales that the Lithuanians are spinning of Russian blackmail towards Yanykovych, and its faithful repetition in the Western media – we can now look to the future.

That future revolves around February 26, 2015. That is when the next Ukrainian Presidential elections are going to take place. Yanukovych, presumably, wants to win them. But he is not very popular. He has a long-standing reputation as a thug, and a slightly less long-standing reputation as an idiot. Internet commentators frequently call him a “vegetable.”

But he does want to remain President. So Tymoshenko remains in prison, while a law is being introduced to make it illegal for Klitschko to run for the Presidency, seeing as he is a tax resident of Germany. (Aside: If I were Ukrainian, the fact that a tax resident of a foreign country is probably the most popular candidate for leadership would make me profoundly depressed).

The logical course, then, would be to sign up to the Russian deal, which could stave off what many in the financial community are considering to be imminent collapse. But EU membership remains a strategic goal for the Party of Regions and the oligarchs too. So we continue to observe very arduous attempts to have the cake and eat it too. I am talking about their pleas for a three-way trade commission between the EU, Ukraine, and Russia. But too bad for them, the EU isn’t interested. Because the EU doesn’t want Yanukovych. “Look soldier, you don’t like me, and I don’t like you.” “But I like you!” “Okay. You like me, but I don’t like you.” That’s the EU and Yanukovych, in a nutshell.

So that option is out of the window. The days of playing the EU off against Russia to extract concessions is drawing to a close.

What is going to happen now?

Sign up to the Customs Union and be done with all the rigmarole. This is not a choice: Extensive Russian support is predicated on joining the Customs Union.

This is what the opposition, the worshipers of the “European choice” and haters of “Aziopa,” so fervently fear. But I suspect those fears are misplaced. The Ukrainian population under 50 is more pro-EU than pro-Eurasia, and as older people die off, the balance of electoral (not to mention street) power is going to shift West. In this scenario, the Party of Regions will bear a mounting electoral toll for depriving Ukrainians of their “European choice.” The oligarchs will be none too happy either.

Incidentally, this puts the Party of Regions in a fundamental bind. Their core electorate is very slowly but surely dissipating. But should they try to tap the electoral power of younger age groups by signing the Association Agreement, the result would wreck eastern industry and collapse their existing electorate. So they would want to postpone this until after the Presidential elections if at all possible.

Another choice is to default now, devalue the currency, and hope for recovery to pick up in a year’s time, just in time for the elections. (This is what Belarus did in 2010, minus the elections). But this is very risky. Russian gas imports will become even more expensive, and crippling to the budget – and they would be loth to throw Yanukovych a lifeline. If they maintain pressure, Yanukovych would be truly doomed in 2015, even if Tymoshenko and Klitschko are both out of the game. The EU/IMF wouldn’t help either, of course (they don’t want Yanukovych). All they’d have to do is play the waiting game and just wait for a pro-European President to come to power in 2015.

Yanukovych has no good options, that much is clear. All are fraught with varying degrees of risk. But surprisingly enough, it actually appears that – in the absence of any further involvement with the EU, which has basically thrown a hissy fit and wants to have nothing more whatsoever to do with Yanukovych – the Customs Union path is the most promising one for him. Not a good one, mind. The younger people west of Donbass and north of Crimea are pissed off at him, and presumably the oligarchs are none too happy either. But unlike the alternatives – alienation of the core electorate – these are fundamentally manageable problems. Younger people are more active, sure, but the power of the street is overrated (it was a court decision, not the Maidan, that was central to the Orange Revolution); and elderly people are more likely to vote. And what other choice do the Donbass oligarchs have?

All in all, a carnival of errors. The Party of Regions making EU integration a core part of its platform to the extent of funding an information campaign in favor of it. The EU for being so hardline on fiscal matters, which was ultimately a threat to Yanukovych’s political survival and hence unacceptable. Putin is the only one who appears to have played all his cards right.

Well, this train of thought has come to a most unexpected point. I suppose the “hysterical” articles aren’t so hysterical after all… But the outcome is accidental, not having been intended by Yanukovych.

And it goes without saying that things remain very unpredictable. For instance, there’s also the Chinese variant.