Ukraine: Talks Tomorrow to Fail, Again

Published on April 16, 2014

Andriy Deshchytsya, the acting Foreign Minister of Ukraine, US Secretary of State John Kerry, Russia’s Foreign Minister Sergei Lavrov, and EU High Representative for Foreign Affairs Catherine Ashton are scheduled to meet tomorrow in Geneva to try and devise a “Ukraine-led” plan for de-escalating rising tensions between Kiev and the West on one side, and Russia and its supporters in Ukraine’s eastern regions on the other.

Those tensions have mounted sharply in the run up both to this meeting and, more importantly, to the May 25 Presidential election in Ukraine, culminating dramatically in the past few days in a limited military response from Kiev to take back the airfield of Kramatorsk, government buildings in the eastern city of Donetsk, and other eastern areas including around Slavoyansk overrun by pro-Russia agitators.

*** Those talks are likely to achieve nothing. Acting Ukrainian Prime Minister Arseniy Yatsenyuk, despite ordering a military response for the first time in the east, had indicated in the past “that local government reform is a top priority for the government.” Regional governors, for example, could become elective – they are currently appointed by the central government. Those embryonic efforts at conciliation with the eastern regions, however, are not even on the table, at least for now. ***

*** Pro-Russian forces and Moscow have been pushing for greater “federalism,” (no one is exactly sure what is meant by that), but any offer from the current government will be rejected not just by the pro-Russian forces, but increasingly, and more dangerously, has been blocked by the president’s own constituency in the west. Today, in fact, the Verkhovna Rada, Ukraine’s parliament, passed a motion banning any negotiations on an international level,  including at these “four-party talks,” on issues deemed to be domestic Ukrainian concerns: constitutional reform, regional rights, and official languages, to name a few. Those happen to cover every issue Russia has in effect raised. ***

*** In fact the latest indications out of Kiev are that it will walk into Geneva demanding a withdrawal of Russian troops from its borders, reversal of the Duma vote allowing for the “protection” of Russian minorities, removal of all troops from Crimea, and an abolition of Crimea’s annexation to the Russian Federation – in other words, a stating of national position rather than any attempt at negotiation with a foreign power. In order to manage potential fallout on the ground from another round of failed negotiations, Washington is already prudently downplaying expectations for tomorrow’s meeting. Meanwhile, although certainly far from a base case scenario, there is growing anxiety in western Ukraine over a possible swift incursion from Russia to establish new facts on the ground that is speculated could come either over the Easter weekend, with government officials away on holidays, or on May 9, a major nationalistic celebration in Russia and across the former Soviet Union of the victory over Germany in World War II. ***

And as the standoff in the east intensifies, western Ukrainians are also increasingly enraged at their own leadership and at what they see as unanswered provocations from Moscow, and are drawing a harder line on refusing to negotiate with foreign powers.

Many are already looking past the elections to a new leadership for any resolution to the current crisis, and are openly questioning the legitimacy of any potential deal struck by the increasingly embattled interim government. That could suit Moscow just fine, especially if the next President were to be Yulia Tymoschenko, as opposed to the tycoon Petro Poroschenko, who is closer to the west and particularly the EU and United States.

But the vacuum in the interim could become increasingly dangerous.

Decentralization and Unity, the Response from Kiev

There have been suggestions out of Kiev of attaching a referendum question to the May 25 Presidential ballot, which would include “decentralization” provisions that would help address and de-escalate regional issues with the east. But even though there is the likelihood that a new draft of Ukraine’s constitution will include the direct election of regional governors, that will likely now only come further down the road, and any referendum attached to the May 25 election is increasingly seen as an opportunity to mount a national plebiscite to reinforce a vote for a “united” Ukraine versus a “federal” one, in effect a direct slap at Moscow’s rhetoric and intervention.

This of course would pass with a wide margin, but is being rejected already as irrelevant out of hand by Moscow and as an effort by an illegitimate government to allegedly disenfranchise its Russian “constituency” in the east.

There does nevertheless appear to be broad based support across Ukraine for some sort of revision to its current highly centralized government that allows for slightly greater regional representation – namely a revision of the constitution to allow for the direct election of regional governors (they are currently appointed by Kiev), and for some modest budgetary authority for the regions. But that is something that Prime Minister Yatsenyuk promised last week to do “in three months.”

Demands from Moscow and its proxies for “Federalization” in Ukraine in conjunction with the clear interference in the eastern regions of Luhansk and Donetsk (and to a lesser extent Kharkiv) have for now raised alarm bells over making any concession at all over the regional representation issue, and polarized the two sides even more than before, if anything.

The very term “federalism” is now seen as an opening to the de-fact partitioning of Ukraine into spheres of influence at best, and a full break up at worst, and Ukrainians of all walks of life, including former Presidents Leonid Kuchma and Viktor Yuschenko, have vociferously come out in force to denounce all calls by Russia for a “federal” Ukraine.

And so from Kiev and the west, there is an increasing unwillingness to allow for any change in the constitution before a new President is in place and ostensibly, the national unity of Ukraine has been further reinforced.

Both of the leading candidates, Yulia Tymoschenko and chocolate magnate Petro Poroschenko, who is also backed by former heavyweight champion Vitaly Klitschko, are also including the reintegration of Crimea in their platforms. That is obviously a rather unrealistic objective, to phrase it politely, and even the candidates stress that the Crimea issue will be pursued in the European court system (where nothing will happen). But it does illustrate the deepness of the nationalist divide and feeling that is gripping Ukraine and reinforced by events in the east.

Sanctions and Threats, the Standoff between the Powers

The EU and the US, braced for a long stand-off with Moscow, have this week been actively preparing their respective positions for a further escalation of sanctions if needed, although differences in both tone and substance still clearly remain, both between the two and of course within the EU itself.

While the US and NATO have accused Moscow beyond any doubt of provoking tensions in the east and demanded they be stopped, the EU has forged a position demanding Russia renounce unrest in eastern Ukraine without explicitly laying the blame at Moscow’s door.

On a more concrete level, the EU has agreed to widen its sanctions list from 55 individuals to target more Ukrainian and Russian officials if need be, but has not gone so far as the US on that list of individuals.

Washington has deliberately leaked the threat of the potential inclusion of Igor Sechin, the powerful CEO of Rosneft who is in the absolutely deepest inner circle of Putin himself, and often considered to be, along with Medvedev, one of Putin’s few potential handpicked successors. Institutional restrictions on the state controlled companies themselves (VTB, Sberbank, Rosneft…) would be the far more economically explosive next level of sanctions.

European Council officials are also preparing a report on the potential damage to the EU economy of sanctions on Russia, which suggests something more substantive could come, but that will not be ready for a week, from what we understand. The Commission has a number of tricky cases open involving Russia: a Gazprom antitrust case, the south stream gas pipeline project, and WTO, and initially thought these could provide leverage points against Moscow. But Putin’s letter suggesting that Russia is not worried about disrupting gas supplies has chilled that track for some of the member states. There are rumors of an emergency meeting to further discuss next steps next week.

From what we understand EU Ministers have also discussed potentially sending a civilian monitoring team (on the basis of a unanimity agreement in the field of Common Defense Policy) of roughly two hundred observers to Ukraine. While this would be a far cry from any active military aid, much less troop involvement, it would still nevertheless represent a more direct and highly visible symbol of support for the Kiev government and, as potentially provocative, has been kept under wraps for now. But we believe they were considered and discussed at the last EU ministerial meeting.

NATO commander General Philip M. Breedlove has also stepped up discussions with Poland and the Baltic states on an increased military footprint and troop presence, and discussions on greater military cooperation have stretched as far south as into Romania.

The US, under President Obama, did cut its troop presence in Europe in half, by 10,000 troops, back in 2012 as part of a broader military overhaul, but there is also now an increasing willingness in Washington to contemplate a reinforced deterrent force on the eastern borders of NATO.

All that planning changes of course if Russia were to in fact annex Eastern Ukraine.

Assuming, as we do, that Putin’s end game is not in fact to mire Russia down in what would undoubtedly be a swift military annexation, but a potentially very costly and far more difficult occupation of eastern Ukraine, but rather to influence and even try and control a united but weakened Ukraine without outright invasion, that outcome can clearly still be avoided.

And Putin has ratcheted up his economic lever with attempts now to drive a wedge between the EU and Kiev over gas supplies, seizing on Kiev’s refusal, or inability, to pay its bills to Gazprom to demand the west step up pressure on its ally.

But with the sides now at least as, if not more, rather than less, polarized than they were after the annexation of Crimea, prospects for de-escalation before the May 25 election are looking increasingly unlikely.

And with that vacuum comes the chance for a continued boil up in tensions on the ground at a minimum, and another round of sanctions escalation, in the lead up to the elections.

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