Merkel`s
meetings with President Viktor Yushchenko and Prime Minister Yulia
Tymoshenko -- opposition leader Viktor Yanukovych will not be available
to see Merkel -- were expected to focus on Ukraine`s further
integration with Europe in the form of an EU-Ukraine Action plan and
the EU-Ukraine "Enhanced Agreement." The leaders were also likely to
talk about Ukraine`s eventual invitation to join NATO and the prospects
of Ukraine being offered a Membership Action Plan (MAP) at the next
NATO summit in May 2009. In addition, Merkel no doubt wanted to discuss
energy and business relations -- Germany is Ukraine`s second-largest
trading partner after Russia.
The European Union imports 80
percent of its natural gas from Russia via the territory of Ukraine. In
the light of increasingly shaky EU-Russia energy relations over the
last two years, it seems clear that the further integration of the
second-largest country on the continent into the EU is a vital interest
for the bloc. Unfortunately, the long-running and ongoing domestic
power struggle in Kyiv -- pitting Yushchenko and Tymoshenko, who
together command a majority in the Verkhovna Rada, against Yanukovych,
head of the powerful pro-Moscow Party of Regions -- has produced a
deadlock in the implementation of many urgent reforms requested by the
EU.
In addition, Tymoshenko and Yushchenko are clearly already
jostling with one another with an eye on the next presidential
election. In short, the constantly changing parliamentary majorities
and sometimes violent boycotts of the legislature are doing nothing to
encourage Ukraine`s further integration with Brussels. However, EU
membership is clearly supported by the large majority of the Ukrainian
population.
The new Enhanced Agreement will be linked to a deep
and comprehensive Free Trade Agreement for Ukraine. French President
Nicolas Sarkozy, whose country currently holds the rotating EU
Presidency, has said the negotiations should be completed by the
beginning of next year. If this agreement contains a clear membership
prospective for Ukraine, it will calm many domestic policy struggles in
Kyiv.
Gas Squeeze
Of course, Ukraine`s
relations with Europe are shaped to some extent by its relations with
Russia and the key to those relations is energy. The two countries
agreed in March to break up the former opaque trading structure that
involved Russia`s state-controlled Gazprom, Ukraine`s state-owned
oil-and-gas company Naftohaz Ukrayiny, and the rather obscure
intermediary RosUkrEnergo (RUE). RUE is half owned by two even more
obscure Ukrainian oligarchs -- Dmytro Firtash (45 percent) and Ivan
Fursin (5 percent), an Odessa banker with reputed ties to the recently
imprisoned mafioso Semyon Mogilevych. Gazprom owns the other half of
RUE.
Under the new deal, Ukraine will receive gas that is
one-quarter more expensive Russian gas and three-quarters cheaper
Central Asian gas routed via Russia. The resulting mixture will cost
considerably less than European markets prices. Since Moscow insists on
keeping Kyiv out of direct gas relations with Central Asia, it remains
unclear whether RUE has really been cut out of the deal. Moreover, the
Central Asian price concessions will expire at the end of this year and
Turkmenistan has already announced it will seek European-level prices
for its gas in 2009. The era of cheap gas for Russia and Ukraine is
coming to an end.
That price increase will pose serious
difficulties for the Ukrainian economy and will lead to new tensions
between Russia and Ukraine -- tensions fraught with potential
consequences for the European market and the presidential election in
Ukraine next year.
With these events not far over the horizon and
the EU and Germany facing the possibility of direct fallout from them,
Chancellor Merkel has to secure a stronger role for the EU in these
negotiations. When the merger of the European Investment Bank (EIB) and
the European Bank for Reconstruction and Development (EBRD) is
completed in the coming months, the new structure could serve as the
ideal vehicle for acquiring larger stakes in Ukraine`s gas-transport
network. The EU could then insist on greater transparency in the future
gas-pricing deal by introducing European accounting and management
standards. Given the weight of European consumer power, European
interests must have a stronger say in the negotiations with Russia.
Still In Play
Russian
President Dmitry Medvedev has warned Ukraine against seeking NATO
membership. Vladimir Putin, when he was president, threatened to target
his "brother Slavs" with Russian missiles. Putin and other Russian
politicians have hinted at support for separatist movements in Ukraine,
focusing on the primarily ethnic-Russian Crimea and eastern regions of
the country.
The Ukrainian government still has much to do to
convince its people of the advantages of joining NATO. But the
percentage of Ukrainians favoring membership has doubled over the last
three years, reaching 36 percent. However, 28 percent remain opposed to
membership and the other third are undecided. Although Ukraine and
Georgia did not get all they hoped for out of the NATO summit in
Bucharest in April, the bloc did assure the two countries that they
would one day become members. "NATO welcomes Ukraine`s and Georgia`s
Euro-Atlantic aspirations for membership in NATO," NATO
Secretary-General Jaap de Hoop Scheffer said. "We agreed today that
these countries will become members of NATO."
For Russia,
however, the success of Ukraine`s NATO bid and of its general
democratic-transformation project would pose a direct threat to the
legitimacy and domestic stability of so-called Putinism in Russia. That
is why Medvedev -- himself a product of Putinism -- has spoken so
sharply against the new developing order in Europe.
The stakes,
then, are high. Germany, as a European economic and political
heavyweight with a special relationship with Russia, must take an
active and leading role in the process of Ukrainian integration with
Euro-Atlantic structures, for Europe`s sake as well as for Ukraine`s.
Finally, it would seem, Germany has a chancellor who understands this
shift in geopolitics and its consequences for Germany.
By Joerg Himmelreich, RFE/RL
