A way out of the Ukrainian quagmire
Thorvaldur Gylfason, Inmaculada Martínez-Zarzoso, Per Magnus Wijkman 14 June 2014
The Ukraine saw EU soft power met by Russian hard power. This column argues that the EU should counter this hard power using trade policy, among other policies. EU members should agree a common policy and seek support from others to execute this policy. To date, the EU’s response has been too little, too late.
At the Vilnius Summit in November 2013, President Yanukovich chose not to sign the Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU that Ukraine had spent five years negotiating.1 His decision was dictated both by Ukraine’s failure to fulfil the political conditions for signature set by the EU and by strong pressure by Russia on Ukraine to join the Eurasian Customs Union instead.2 His refusal to sign unleashed events in Ukraine that within six months led to the President’s flight to Russia, the installation of a new pr
EU policies Europe's nations and regions International trade
Russia, EU, civil war, free trade agreements, Ukraine, diplomacy
What is at stake in Crimea?
Yuriy Gorodnichenko, Gérard Roland 10 March 2014
The speed at which events in Ukraine are unfolding is astounding. This column argues that the real goal of Russian President Putin is to make the February 2014 changes look like a failure. Root causes of the Ukrainian protest also exist in Russia and a victory of reform forces in Kiev could encourage stronger protest movement in Russia than that of 2011-2013 and potentially lead to a similar outcome.
By ordering the covert invasion of Crimea, Russian President Putin created an extremely tense situation not only in Ukraine but also in the rest of Europe. The official motivation for his actions, i.e. to defend Russians living in Ukraine, is a sham. There is no evidence of the new (or any previous) government in Ukraine persecuting Russians or Russian-speaking citizens of Ukraine.
Europe's nations and regions
Putin, Ukraine, Crimea
Ukraine: What emergency measures and what long-term changes are needed?
Gérard Roland, Yuriy Gorodnichenko 27 February 2014
Ukraine’s ‘February Revolution’ is threatened by the nation’s dire economic straits. The column discusses short- and long-term changes that are necessary to get the nation through this crisis and back on the track to stability.
Although it is only a few days after the successful February revolution and the country is still in a state of flux, a new government is needed to deal with emergency economic measures.
Europe's nations and regions
Meeting Russia’s challenge to EU’s Eastern Partnership
Thorvaldur Gylfason, Per Magnus Wijkman 25 January 2014
The EU’s Eastern Partnership is currently in turmoil. Armenia and Ukraine – two of the four partner countries (which also include Moldova and Georgia) did not initial association agreements. This column discusses the role of Russia in discouraging such negotiations. The soft power of the EU was apparently no match for the hard power of Russia in the cases of Armenia and Ukraine. A successful partnership would require peaceful international relations between the four partners, and solving their conflicts with Russia.
EU’s Eastern Partnership is in turmoil after its Summit in Vilnius on 29 November 2013. Only Georgia and Moldova of the four partner countries that had successfully negotiated Association agreements with the EU, including Deep and Comprehensive Free Trade Agreements (DCFTAs), initialed them at the Summit.1 In September, President Sargsyan, motivated by the threatened loss of Russia’s security guarantee vis-à-vis Azerbaijan, had informed the EU that Armenia would not initial its Association agreement but instead join Russia’s proposed Eurasian Customs Union.
Politics and economics
Russia, EU, Ukraine, Eastern Partnership
The Ukraine-Russia deal
Charles Wyplosz 24 December 2013
The Ukraine-Russia deal involves politics as much as economics. This column argues that the economics of the deal will eventually lead to problems for one or both.
As the price to deter a westward move of Ukraine, Russia has made an offer that the Ukrainian president has found impossible to turn down, if he ever contemplated seriously tying his country to the EU. This is generally hailed as a master coup by President Putin and a great relief for President Yanukovych. In fact, this coup is likely to end in tears for both countries.
What drives protests in the Ukraine? This time, it is institutions
Nauro F Campos 22 December 2013
Mass political protests are erupting in Ukraine. The conventional wisdom views them as driven by popular dissatisfaction with the government’s rejection of the EU agreement. This column argues that the main cause for the protests is the weak institutional framework that emerged after the collapse of communism. Therefore, a potential EU involvement will be most beneficial in providing a stable institutional setting. Utilising this historical moment is important in order for Ukraine to avoid the example of Argentina.
Once more, mass political protests erupted in 2013, this time in Ukraine. Protests are starting to spread and swell (freezing temperatures notwithstanding), but so far they have been mostly concentrated in the capital city. Anti-government protestors have barricaded themselves in Kiev’s Independence Square (‘Maidan’) and, from the confines of the said square, have attracted considerable international attention (culminating, arguably, with the recent visit of two US senators – Democrat Chris Murphy and Republican John McCain).
What is the reason for these mass political protests?
Europe's nations and regions Institutions and economics
EU, Ukraine, protests, weak institutions
Ukraine’s trade policy: Addressing supply-chain frictions
Bernard Hoekman, Jesper Jensen, David Tarr 29 November 2013
Two regional trade agreements are centre of attention in Ukraine: the Deep and Comprehensive Free Trade Agreement with the EU – that for the time being Ukraine has rejected – and the Eurasian Customs Union with Russia, that Ukraine has been invited (or pressured) to join. Rather than choosing between the two, Ukraine should focus on reducing policy frictions that negatively affect trade through processes that mobilise firms and industries on both sides of the border. The recent proposal by Ukraine to establish a joint commission among Ukraine, Russia and the EU to promote trade could be a step in this direction.
On November 21 2013, Ukraine suspended preparations for signing the Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union (EU) at the Third EU-Eastern Partnership Summit in Vilnius on November 28-29. In 2010, the Russian Federation, Belarus and Kazakhstan formed the Eurasian Customs Union (ECU) and have invited Ukraine to become a member. This has become a politically charged issue, generating great uncertainty that is likely to have negative consequences for investment and economic activity (see Handley and Limão 2013, Shepotylo 2013).
EU institutions International trade
WTO, barriers to trade, FTAs, global supply chain, Ukraine