Hot air during Ukraine’s winter

by Tammy Lynch

European Union, United States and Ukraine leaders did a lot of talking over the last week. The end result …… more talking. And it wasn’t necessarily a series of friendly chats.

First, the good news (of a sort).

Following a meeting with Ukraine Foreign Minister Petro Poroshenko, US Secretary of State Hillary Clinton “reaffirmed” her country’s “broad partnership” with Ukraine. “A strong and independent Ukraine is good for the region and good for the world,” she said. She further expressed the hope that the new US-Ukraine Strategic Partnership Commission would help the two countries make progress on a host of areas, including economic development, rule of law, trade, security and energy reform.

Of particular interest, in her statement, Secretary Clinton made no mention of any progress that has already occurred or is occurring now under the auspices of this Commission, which was formed in July.

She also signaled concern about the tenuousness of Ukraine’s gains in the area of electoral democracy by gently but clearly stating that the US “looks forward to free and fair elections.”

See excerpts from Clinton’s statement here.

Unlike the US, it seems the EU is done tip-toeing around the reform issue in Ukraine. “Too often, it seems, promises are only partly met, commitments are only partly met, words are not always matched by actions,” EU President Jose Manuel Barroso said during the annual EU-Ukraine Summit in Kyiv last week.

The summit was held amid low expectations - and met them.

In the wake of the freezing of IMF and World Bank stabilization funding, and following repeated statements by President Yushchenko calling for the renegotiation of a Russia-Ukraine gas deal supported by the EU, there wasn’t much to talk about, apparently. It seems EU leaders believe Ukraine hasn’t lived up to its side of the negotiated bargain. This is true – but the EU hasn’t been in a collaborative mood itself.

The EU’s refusal to even mention the far distant possibility of EU membership for Ukraine has consistently irked the country’s leadership who years ago needed some hope on which to hang reforms.

More recently, the EU and Ukraine signed a Joint Declaration at the EU-Ukraine International Investment Conference on the Modernization of Ukraine’s Gas Transit System. Among other things, the declaration commits Ukraine to ensure transparent operation of its gas network, and set tariffs at a rate that will “reflect actual costs incurred.”

In return, the European Commission, Ukraine, and “creditors” commit to “cooperate in seeking to establish a technical co-ordinating (sic) council unit within Naftogaz of Ukraine.” This council would create an EU-approved “full modernization business plan” for Ukraine’s gas transportation system, and would help arrange the funding to undertake the system’s modernization.

The modernization was said at the time to be able to create an additional transit capacity of 60 bcm of gas per year – far more than the floundering South Stream pipeline’s proposed 47 bcm, and at much less cost – although that figure was never confirmed.

But neither side has fulfilled any commitments related to this deal. Ukraine, in particular, shows little interest in reform-oriented proposals. It’s no wonder, then, that although there has been substantial cooperation in the past, meetings now between Ukraine and Western political entities like the EU and the US have an almost perfunctory feel, designed to demonstrate “partnership” but, at the moment, without a lot to show for it.

See excerpts from speeches at EU-Ukraine Conference on the Modernization of Ukraine’s Gas Transit System here, from March 2009.