Euro-integration: Not as Benign as it Looks

August 30, 2013
Anthony T. Salvia
Director, American Institute in Ukraine

Ukraine is on the razor’s edge. In the event it opts to sign the E.U. Association Agreement and related Deep and Comprehensive Free Trade Agreement, it would be making its riskiest move since independence, one that, over time, could:

  • Fatally undermine its sovereignty (the E.U. exists for the very purpose of putting an end to the sovereignty of member and associated states),
  • Deal a blow to its already reeling economy (the Association Agreement, quite unlike the Customs Union, contains no tangible economic benefits for Ukraine), and
  • See the imposition on the country of utterly alien cultural values (the gay agenda so beloved of Brussels, etc.)

Does Ukraine really need this?

In addition, according to Title II of the Association Agreement, Ukraine will be bound to support “gradual convergence on foreign and security matters with the aim of Ukraine’s ever deeper involvement in the European security area” -- in other words, support military campaigns to force radical Islam on Syria as the U.S., U.K. and the E.U. are now doing? Is it really in Ukraine’s interest to align with powers intent on driving Orthodox Christianity out of the Middle East – under Tomahawk missile attack, if necessary?

Recent remarks by Ukrainian Foreign Minister Leonid Kozhara indicate Kiev understands that signature of the Association Agreement would entail a new strategic orientation for Ukraine:

“European integration remains the strategic objective of Ukraine’s foreign policy. This is the political will of the current government of Ukraine and a requirement of the corresponding law, which fixes European integration as a priority objective.”

But Kozhara went on to stress the importance of trade with the Eurasian Custom Union, indicating Kiev has not lost all sense of realism, and that multi-vectorism is not yet a dead letter:

“At the same time, we cooperate with the Customs Union, which also has a strategic character, and the Customs Union today is Ukraine’s no. 1 trading partner.”

Kozhara is right to stress the economic dimension inherent in Ukraine’s fateful choice. As noted, few tangible economic benefits are likely to flow from the Association Agreement as Europe’s economy is terminally moribund, and its agriculture sector is and will remain highly protected.

A recent report by the Financial Times indicates the depth of Ukraine’s economic malaise:

“Figures released this month showed that Ukraine’s central bank reserves, which have been declining for the past two years, shrank 7.4 per cent in the past year, to $22.7bn, the equivalent of just below 2.8 months of imports, and the lowest level since 2006.

“The government is in a particularly difficult situation, having struggled for much of this year to contain trade and budget deficits.”

The last thing Ukraine needs to do now (with the 2015 presidential campaign already effectively underway) is to undermine its trade relationships with the Customs Union, whose alone have a tradition and culture of buying Ukrainian products, the ability to reduce prices for and import fees on raw materials, and provide support in the form of cash and credits.

Stratfor, the U.S. global intelligence firm, recently ran a piece analyzing Hungary’s bitter experience with E.U. membership, noting that Budapest is resorting to improving relations with Moscow so as to have a counterweight against Brussels and Berlin. Why Moscow, which Budapest has long regarded warily? Because, in Strafor’s words, “Moscow has three things Brussels does not: money, natural resources and a disinterest in whether or not its partners implement institutional reforms.”

Stratfor says Budapest is striving for a “multidimensional” foreign policy to assert its independence and bolster its threatened sovereignty. How odd that some in Kiev seem so intent on ditching multi-vectorism as a strategic objective, just as Budapest, having learned the lesson of casting its lot irrevocably with the West, embraces it.

Disenchantment with “Europe” is not limited to ex-members of the Warsaw Pact. Britain is planning an in/out referendum on E.U. membership in 2015 after London re-negotiates its membership terms with Brussels. This week, London mayor Boris Johnson made this appeal to his countrymen:

“We need to raise our eyes beyond Europe, forging and intensifying links with countries that are going to be growing in the decades ahead — countries that offer immense opportunities for British goods, people, services and capital.”

Yes, because Britain will not find such opportunities in Europe, which English journalist James Delingpole has called a ““Communist-style economic dead zone in which all productive business and financial service industries have long since fled to the safety of the Far East.”

Happily, Kiev has a way out of its dilemma: It is article 39 of the Association Agreement, which “shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier traffic except insofar as they conflict with trade arrangements provided for in this Agreement."

Ukraine should stand ready to exercise its rights under article 39 in the interest of national prosperity and the maintenance of its national sovereignty.