The EU signed an association agreement with Ukraine on 21 March 2014. The agreement needs to be ratified by EU member states (although parts of the agreement already are effective). On April 6th of this year, Dutch citizens have an opportunity to express their opinion on the merits of this agreement when a (non-binding) referendum will be held.
The association agreement was proposed in 2012 and eventually led to the toppling of the government of Viktor Yanukovych in February 2014 and the invasion of Crimea by Russia not much later. The association agreement is marketed as a trade agreement by its proponents but it is much more than that. It calls for political integration and military cooperation. No wonder Russia annexed Crimea, where Russia’s naval base is located.
Is it wise to embark on such a project? Ukraine’s economy is in a mess. Real GDP contacted by 6.8% in 2014 and 12.7% in 2015 (according to Citigroup) and public debt already is in excess of 75% of GDP and still rising (despite a debt restructuring with a 20% haircut). More importantly, Ukraine’s government is corrupt. Even U.S. vice president Joe Biden, whose country is propping up the government of president Petro Poroshenko (also by forcing the IMF to release credit against its own rules), had to admit that “corruption was eating Ukraine like a cancer” when he spoke to the country’s parliament. A few oligarchs control Ukraine’s economy and have infested the political and judicial institutions with their cronies. Poroshenko’s friend Ihor Kolomoisky (formerly also governor of Dnipropetrovask) skimmed an USD 1.8 billion loan from the IMF meant to shore up the country’s banking system. Well, the money indeed went into a bank, Ihor’s Privatbank that is and through loan schemes ended up offshore. Poroshenko, himself a wealthy chocolatier, seems to favour his own businesses (a bank and shipbuilder, amongst others) by awarding licenses and contracts. Hired-hand Mikheil Saakashvili, former Georgian president and current Odessa governor, accuses prime minister Arseny Yatseniuk for holding up privatization of the Odessa Port Plant to maintain ongoing corruption schemes.
Does the EU really wants to get involved with these type of people? Finally, the country’s population is deeply split over the question whether they belong to the West or East (Russia) as the separatist war in the Donbas region aptly illustrates. The EUcrats in Brussels want to make us believe that by signing the association agreement Ukraine will prosper and democracy will be around the corner. If Moldova’ s association agreement is any guide, this seems overly optimistic.