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  • Ukraine/Vilnius

    This past week the Cabinet of Ministers of Ukraine approved the draft Association Agreement between Ukraine and the European Union and its member states. The EU/Ukraine Association Agreement conference is slated to take place in November at the European Union Eastern Partnership Summit in Vilnius, Lithuania. Signing the AA would allow Ukraine to trade freely with the 28 member EU which would virtually double Ukraine's GDP. This is also a necessary step towards full Ukraine membership in the European Union. In the judgement of the EU, Ukraine has passed legislation and has made the necessary headway towards meshing Ukrainian laws regarding elections, property rights, and the judiciary with those of EU member states. The lone EU demand that Ukraine has yet to fulfill is the situation of Yulia Tymoshenko (a former Prime Minister of Ukraine) who was convicted of abuse of power and embezzlement and is currently incarcerated in Kharkiv. The EU regards Ms Tymoshenko as a political prisoner. Ukrainian President Viktor Yanukovych and Prime Minister Mykola Azarov say they are searching for legal ways to transfer Ms Tymoshenko to a third country for 'medical treatment'.

    At the same time, Russia is putting heavy pressure on Ukraine to join the Customs Union which consists of Russia, Belarus, and Kazakhstan. Armenia is reportedly leaning towards joining the CU. Russian president Vladimir Putin has declared that Ukraine cannot be a member of both the AA and the CU. She will have to choose between the East and the West. All indicators point to Ukraine joining the European community. Vilnius awaits.
    Last edited by Minskaya; 20 Sep 13,, 13:31.
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  • #2
    I wouldn't hold my breath for Ukraine on deciding which way to go. EU has a bigger and more diverse and richer demographics than what CU can offer

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    • #3
      Minnie,

      That's weird. Just few days back I have read that Merkel stands firm on the stance that the Balkan countries will be the last to join the Union.
      At least for a while. And our prospects are 2025-2030. The optimistic ones.
      No such thing as a good tax - Churchill

      To make mistakes is human. To blame someone else for your mistake, is strategic.

      Comment


      • #4
        Is it safe to assume that Vlad will not be pleased?

        Was Yanukovych notionally 'pro-Russian', or was that the other side - not up to speed on Ukranian politics. In any case, I would have thought that Ukraine was a pretty big 'prize' in this sort of situation, especially for the CU, which seems a wee bit light on in terms of members and especially in terms of biggish ones. Something of a blow to Russian prestige if it 'goes West'. Will Putting hold the line on 'no dual memberships', or does the CU need Ukraine enough for its credibility that he will reconsider.
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        Win nervously lose tragically - Reds C C

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        • #5
          Originally posted by Doktor View Post
          Minnie,

          That's weird. Just few days back I have read that Merkel stands firm on the stance that the Balkan countries will be the last to join the Union.
          At least for a while. And our prospects are 2025-2030. The optimistic ones.
          I don't think it is full membership Doc, just allowing free trade. That and a promise of membership in 20 years (or sooner if there is a change of heart in Brussels) may still be a better bet than what Russia has to offer. With Russia trying to lock Ukraine into its CU there is a certain sense to opening the door just a bit.
          sigpic

          Win nervously lose tragically - Reds C C

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          • #6
            what does ukraine have to offer to EU?
            "Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!" B. Franklin

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            • #7
              Originally posted by Doktor View Post
              Minnie,
              That's weird. Just few days back I have read that Merkel stands firm on the stance that the Balkan countries will be the last to join the Union. At least for a while. And our prospects are 2025-2030. The optimistic ones.
              I believe Ukraine has been told EU membership would be a decade away at a minimum. Understandable. It would take at least that long for Ukraine to transition to a European structure and modality.


              Originally posted by Bigfella View Post
              Is it safe to assume that Vlad will not be pleased?

              Was Yanukovych notionally 'pro-Russian', or was that the other side - not up to speed on Ukranian politics. In any case, I would have thought that Ukraine was a pretty big 'prize' in this sort of situation, especially for the CU, which seems a wee bit light on in terms of members and especially in terms of biggish ones. Something of a blow to Russian prestige if it 'goes West'. Will Putting hold the line on 'no dual memberships', or does the CU need Ukraine enough for its credibility that he will reconsider.
              Yanukovych is a bit like like me in one respect... a hybrid. His mother was Russian and his father was Belorussian/Polish. He grew up in the Donetsk Oblast (mostly Russian speakers). Has a checkered past with the law. He is politically oriented towards Russia but has always stated that Ukraine should strive to become a member of the EU and his first foreign visit after the election was to Brussels. He believes Ukraine should be a militarily neutral nation and that Ukraine's 'cooperation' with NATO is sufficient. In support of the West, Ukraine contributed military forces to both Iraq and Afghanistan. He wants Ukraine to be successful and improve the lives of her citizens and he realizes that the only way to accomplish this is to join the European community.

              Putin very much needs Ukraine in the CU to bolster its gravitas. He has pressured Ukraine by slowing down Ukrainian commercial traffic at border crossings and playing games with the flow of Russian gas and oil. Despite all of this, I believe the political decision has been made to turn Ukraine Westwards. Beyond the pressure from Putin, the biggest stumbling block appears to be the fate of Tymoshenko. To put it mildly, these two detest each other.
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              • #8
                Originally posted by omon View Post
                what does ukraine have to offer to EU?
                Ukraine is a large country and with the right guidance and alignment... very good economic potential.
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                • #9
                  Originally posted by Minskaya View Post
                  Putin very much needs Ukraine in the CU to bolster its gravitas. He has pressured Ukraine by slowing down Ukrainian commercial traffic at border crossings and playing games with the flow of Russian gas and oil. Despite all of this, I believe the political decision has been made to turn Ukraine Westwards. Beyond the pressure from Putin, the biggest stumbling block appears to be the fate of Tymoshenko. To put it mildly, these two detest each other.
                  So Vlad is a fan of the 'treat 'em mean & keep 'em keen' school of diplomacy. Don't suppose it occurred to him that using Russian economic influence to threaten Ukraine's economy might make the CU less appealing? It strikes me that Ukraine making such a decisive rejection of Russian alignment, especially under a guy who might have been hoped to take a different tack, is something of a blow to Putin's standing in he region.

                  Sort of puts shennanigans over Syria in the background when the one kid you really need on your team decides to play for the other guy. Ouch!

                  Good news for Ukraine. Be nice to see the economy & general standard of living tick upwards in such a large, crucial & relatively new European nation.
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                  Win nervously lose tragically - Reds C C

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                  • #10
                    Originally posted by Bigfella View Post
                    I don't think it is full membership Doc, just allowing free trade. That and a promise of membership in 20 years (or sooner if there is a change of heart in Brussels) may still be a better bet than what Russia has to offer. With Russia trying to lock Ukraine into its CU there is a certain sense to opening the door just a bit.
                    Frankly, looking from here, the best options for UA is to grab that free trade and if possible no visas and to trade both blocks. They seem just the right size and position to do what we did best on the past - get milk from two sources. I think Belarus can follow up once Lukashenko is out.

                    Not necessarily a big blow for Russians, only a nice middleman that has to be accounted into further dealings in the west.

                    @Omon,

                    Ukraine has a lot of resources, from grain to sunflower to steel, not to mention energetic infrastructures, that both EU and CU would be more then willing to improve.
                    No such thing as a good tax - Churchill

                    To make mistakes is human. To blame someone else for your mistake, is strategic.

                    Comment


                    • #11
                      Originally posted by Doktor View Post
                      Frankly, looking from here, the best options for UA is to grab that free trade and if possible no visas and to trade both blocks. They seem just the right size and position to do what we did best on the past - get milk from two sources. I think Belarus can follow up once Lukashenko is out.

                      Not necessarily a big blow for Russians, only a nice middleman that has to be accounted into further dealings in the west.
                      Doc,

                      My take on the CU is that its significance to Putin isn't just economic. That certainly matters, but so does his desire to increase/cement Russian influence on its periphery by binding nations more closely to Russia economically. If Ukraine moves down the path to eventual EU membership Russia will faced a reduced economic relationship with Ukraine over what it might have obtained, but the decisive loss is in influence. It appears that Ukraine has been moving gradually away from Russia's orbit over the past few years. The CU might have arrested that drift to some extent. The EU process cements the move toward Western Europe.

                      I can't imagine Putin will be able to see much of a silver lining in this.
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                      Win nervously lose tragically - Reds C C

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                      • #12
                        Originally posted by Bigfella View Post
                        Doc,

                        My take on the CU is that its significance to Putin isn't just economic. That certainly matters, but so does his desire to increase/cement Russian influence on its periphery by binding nations more closely to Russia economically. If Ukraine moves down the path to eventual EU membership Russia will faced a reduced economic relationship with Ukraine over what it might have obtained, but the decisive loss is in influence. It appears that Ukraine has been moving gradually away from Russia's orbit over the past few years. The CU might have arrested that drift to some extent. The EU process cements the move toward Western Europe.

                        I can't imagine Putin will be able to see much of a silver lining in this.
                        The Economic factors are by far the most important. Right now Ukraine is trying to get both entries to become a funnel of arbitrage between tariffs in EU vs CU and capture profit on both ends. Russia moved to close the door on that avenue basically and said choose one.

                        The portrayal here of Russia retaliating is partly true but it is also true that EU would have benefited by Ukraine arbitraging the tariff differential (energy, goods, transit, etc...).

                        Economic gravity and influence go hand in hand, there is no doubt that if Russia closes or offsets tarrifs for Ukrainian goods (think various foods) the impact long term will be very interesting thus far I see things like added value good manufacturers building in Russian regions factories that use Ukranian feedstocks in order to offset tarriff increses after Free Trade with former CS is essentially revoked. Roshen did this for their candy using sugar feedstock from Ukraine, one or two Sunflower oil companies did the same, and a few others.

                        The impact from this is not just shift of where things are made but also people go with the flow and work in those factories, logistics, support, etc. that shifts the dynamic completely.

                        On a far deeper level here is the notion of currencies think about financing in Rubles vs Hryvnas for the shift and tax dollars. If my incentive is to shift productive capacity to the near abroad and most of my production goes there minimizing currency risk forces me to operate in Rubles most of the time irrespective of how it impacts the home country. and so on and so on.

                        FYI we still haven't seen the impact of all of this... because the Free Trade agreement is only being challenged by Russia by few issues [but still remains in force] once it is thrown out you get real impact not just through imports/exports by financing implicitly on productive capacity in country in relation to not just where it goes but whom gets what income from where.
                        Originally from Sochi, Russia.

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                        • #13
                          Anyone surprised?

                          Russia threatens Ukraine with bankruptcy over plans to sign EU agreement - Telegraph
                          No such thing as a good tax - Churchill

                          To make mistakes is human. To blame someone else for your mistake, is strategic.

                          Comment


                          • #14
                            I'm not. Losing Ukraine to the EU would be a huge psychological blow to the Russian Federation and the CU.

                            Our cousins to the West (Latvia, Estonia, Lithuania, Poland) have done it and have enjoyed economic success and so can we.
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                            • #15
                              I am not getting why the Russians are playing the game like this.

                              This use-the-writ never worked, even when they had a longer one.

                              I am surprised the Ruskies don't see the opportunity and use Ukraine as a hub.
                              No such thing as a good tax - Churchill

                              To make mistakes is human. To blame someone else for your mistake, is strategic.

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