Search results for: OSW Commentary in Series Title

Ukraine – Romania: a sustained deadlock

Author(s): Tadeusz Iwanski / Language(s): English / Publication Year: 2012

The decision passed by the International Court of Justice in The Hague in February 2009, which finally determined the status of the Snake Island and the delimitation of the borders of Ukraine’s and Romania’s exclusive economic zones on the Black Sea’s continental shelf removed the major dispute from the agenda of relations between the two countries but it failed to reduce their mutual distrust. The sources of this distrust include the difficult history of Ukrainian-Romanian relations in the 20th century which is still adversely affecting political and economic co-operation between these two countries and preventing them from being free from resentments. Romania is the only EU member state and neighbour with which Ukraine has strained relations, which have been seriously deadlocked for years. There are a few political and economic reasons for this. Bucharest’s actions taken with regard to the Romanian and Moldovan national minorities in Ukraine are interpreted in Kyiv as a threat to Ukraine’s national security, and Romania’s political and economic activity in the Black Sea basin is perceived as contrary to Ukrainian interests in this region. In effect, although Romania supports Ukraine’s efforts to build closer relations with the Western structures in the international arena, it cannot be ruled out that Romania’s support will depend on the resolution of bilateral disputes in a way which is favourable to Romania.

Ukraine and Russia: a hindered rapprochement

Author(s): Slawomir Matuszak / Language(s): English / Publication Year: 2010

The policy of rapprochement with Russia that President Victor Yanukovych and his entourage had been actively promoting in the first months of his presidency has slowed down notably. One of the reasons for this lowered pace is that current talks between Russia and Ukraine concern the spheres in which Kyiv is not ready to make concessions to Russia. Despite numerous top-level meetings, recent months have failed to bring a breakthrough in energy issues of key importance. First of all, no compromise was reached in gas issues where the divergence of interests is particularly large and where Ukraine has adopted a tough stance to negotiate the best conditions possible. Even though some agreements were signed during the October session of the inter-governmental committee presided over by the prime ministers (the agreement on linking the two states' aircraft production and on the joint construction of a nuclear fuel production plant), these resulted from prior agreements.Economic negotiations will continue in the coming months but the observed deadlock is not likely to be broken any time soon. The results of these talks are likely to reflect the interests of both Russia and Ukraine, as well as the competition among Ukrainian business groups, some of which opt for closer cooperation with their Eastern neighbour.Ukraine's consent to send oil to Belarus along the Odessa-Brody pipeline shows that the government in Kyiv is ready to engage in projects they consider profitable, even those that run counter to Russian interests. Ukraine’s adoption of this stance may trigger irritation in Moscow and lead to a cooling in bilateral relations.

Ukraine on the financial front – the problem of Ukraine’s foreign public debt

Author(s): Rafal Sadowski / Language(s): English / Publication Year: 2015

One of the key challenges that Ukraine is facing is the scale of its foreign debt (both public and private). As of 1st April it stood at US$ 126 billion, which is 109.8% of the country’s GDP. Approximately 45% of these financial obligations are short-term, meaning that they must be paid off within a year. Although the value of the debt has fallen by nearly US$ 10 billion since the end of 2014 (due to the private sector paying a part of the liabilities), the debt to GDP ratio has increased due to the recession and the depreciation of the hryvnia. The value of Ukraine’s foreign public debt is also on the rise (including state guarantees); since the beginning of 2015 it has risen from US$ 37.6 billion to US$ 43.6 billion. Ukraine does not currently have the resources to pay off its debt. In this situation a debt restructuring is necessary and this is one of the top priorities for the Ukrainian government as well as for the International Monetary Fund (IMF) and its assistance programme. Without this it will be much more difficult for Ukraine to overcome the economic crisis.

Ukraine, Belarus and Moldova and the Chinese economic expansion in Eastern Europe

Author(s): Tadeusz Iwanski / Language(s): English / Publication Year: 2012

The countries of Eastern European and China have been increasingly interested in deepening bilateral contacts over the past few years. In the case of Ukraine, Belarus and Moldova this has been caused by the bad economic situation which was in part caused by the consequences of the global economic crisis of 2008 and the desire to establish closer political relations with a country whose significance on the international arena is continually growing. Each of these countries has different expectations regarding the scale and the nature of co-operation with China.Chisinau wishes only to boost trade, whereas in Minsk and Kyiv, Beijing is also presented as a strategic partner whose investments may not only help the indebted economies recover but also strengthen the position of these countries in their dealings with the EU, and especially with Russia. Beijing sees co-operation with these countries in differently, and its offer is much more modest than Belarus and Ukraine are expecting. Eastern Europe is one of the last parts of the world with which China is activating its co-operation. This is not a priority region for Beijing. China wants to derive economic benefits and to diversify the markets on which it invests its financial surplus, and it does not intend to extend its political dialogue with Ukraine, Belarus and Moldova beyond the framework which determines its economic interests. The main reason for this is the nature of relations between Russia and China. Beijing sees its partnership with Moscow as more beneficial, and will not offer these countries support in their relations with Russia since in its opinion they belong to Russia’s sphere of influence.

Ukraine: sovereign decentralisation or federalism without sovereignty?

Author(s): Tadeusz A. Olszanski / Language(s): English / Publication Year: 2014

mands for a constitutional reform that would transform the country from a unitary into a federal state in a way that would considerably privilege the eastern and southern regions. Such a change to Ukraine's administrative system would enable Moscow to put pressure on Ukraine's central government via the regions. In order to achieve its objectives, Russia has been pressuring Kyiv to establish a constitutional assembly in a form that would guarantee the endorsement of solutions dictated by Russia. In other words, Russia has been demanding, in what is practically an ultimatum, that Ukraine give up one of the fundamental sovereign rights of a state, the right to freely determine its system of government.Transforming Ukraine into a federal state is an unacceptable idea, primarily because the intention behind Russia's demands is to undermine Ukraine's sovereignty, both through the content of the proposed changes and the way in which they are to be implemented. However, keeping in place the current, centralist model of state governance is not a feasible alternative. Ukraine will have to grant its regions broad self-governance powers, including the power to hold local referendums, and to transfer a considerable portion of the prerogatives currently held by the state to the local self-governments, along with adequate financial resources. That is because decentralisation along these lines is the only way forward towards a modern democracy in Ukraine.

Ukraine’s wartime nationalism

Author(s): Tadeusz A. Olszanski / Language(s): English / Publication Year: 2015

The Euromaidan revolution and the war in Donbas that followed it have brought about deep changes in the way Ukrainian citizens think and have led to a rapid transformation of how people view the concept of national community. It began to be increasingly common for proponents of nationalism to refer to solidarity with the state instead of referring to the nation understood as an ethnic community, as they had previously done. This is due to the fact that an entire young generation has matured which takes the Ukrainian state for granted, but also because in the Russian-Ukrainian conflict most Russian-speaking citizens of Ukraine have opted for Ukraine.The war with Russia, which has now been ongoing for over a year, has led to a significant radicalisation of society’s attitudes and to attempts to seek models of military actions from the past that could serve as reference points in contemporary thinking. In Ukraine, the main, if not the only clear-cut model of this type of action, has been the story taught in schools involving fighting carried out by the Ukrainian Insurgent Army (UPA) in 1943–1952 (the narrative omits the crimes perpetrated by this formation—not only those against ethnic Poles). One consequence of this has been the currently observed wide-scale adoption of OUN-UPA symbols including by groups dominated by Russian-speaking residents of central and eastern Ukraine. This, however, is not accompanied by the adoption of the ideology of these historical organisations. Even when activists and columnists refer directly to Stepan Bandera, his actual views remain largely unknown. A new phenomenon has emerged which so far has been of marginal importance, but which has large potential to develop: neo-Nazism which refers to contemporary European neo-Nazism instead of Banderite traditions.

Ukraine–Hungary: the intensifying dispute over the Hungarian minority’s rights

Author(s): Tadeusz Iwanski,Andrzej Sadecki / Language(s): English / Publication Year: 2018

For nearly one year relations between Hungary and Ukraine have been plunged in the worst crisis since the collapse of the USSR. The main cause of the tension has been the Education Act passed by the Ukrainian parliament in September 2017 which envisages a comprehensive reform of the education system and at the same time imposes serious restrictions on the use of the languages of national minorities, including Hungarian, in school education. In response to this, Budapest severely criticised Kyiv and took measures to block the establishment of closer relations between Ukraine and NATO, insisting that the act be changed. In turn, Ukraine took steps to soften Budapest’s stance and asked the Venice Commission to evaluate the act and then declared that it would follow the recommendations provided in the evaluation. The deficit of trust which has existed for years and the fact that neither of the parties had taken real steps to reach a compromise prevented them from reaching an agreement that had seemed close in May and June this year. The conflict was escalated further when the Hungarian government appointed a ministerial commissioner for the development of Zakarpattia Oblast (in Ukraine), which met with a harsh reaction from Kyiv and was interpreted as interfering with Ukraine’s internal affairs.The dispute over the Hungarian minority’s rights in Ukraine is about historical and identity related issues that are very important to both sides, and it is highly unlikely that it will be resolved in the coming months. While these issues have always been at the core of Budapest’s foreign policy, especially with regard to the countries where the Hungarian minorities live, Kyiv neglected them until 2014. However, since the Russian annexation of Crimea and the aggression in the Donbass, Ukraine has been taking comprehensive measures aimed at decommunisation and derussification. The consequences of this include on the one hand a Ukrainisation of the public space, the media and the education system, and on the other restricting national minorities’ rights in Ukraine as regards the use of their language in the education system. For those reasons, both sides are likely to firmly stick to their stances and to be looking for current political benefits resulting from the conflict rather than taking action to reach a compromise.

Ukraine's cooperation with the IMF – unfulfilled hopes for deeper reform

Author(s): Slawomir Matuszak / Language(s): English / Publication Year: 2011

The Party of Regions took power in early 2010, after Ukraine had been plunged deep in economic crisis. Over the next year, with the external markets recovering, the country’s economic situation started to improve gradually. Ukraine’s economic stabilisation was also strengthened by its resumed cooperation with the International Monetary Fund, which provided for a loan worth $15.1 billion. The issuing of successive tranches of the loan was made dependent on the implementation of a comprehensive reform programme. The cooperation went quite smoothly at first; however, as the economic situation in Ukraine improved, the reformist zeal of the Ukrainian government started to fade, and obstacles began piling up. As a result, Ukraine was refused the third tranche, scheduled for this March, and for the moment the credit line remains frozen. Even though the IMF has numerous reservations about the Ukrainian government's economic policy, the fundamental condition for resuming cooperation is reform of the pension system, which the parliament should adopt.

Ukrainian economy on the verge of recession

Author(s): Arkadiusz Sarna / Language(s): English / Publication Year: 2012

In the third quarter of 2012, Ukraine’s economy recorded negative growth (-1.3%) for the first time since its 2009 economic crisis. Q4 GDP is projected to suffer a further decline, bringing Ukraine into formal recession. In addition to the worsening macroeconomic indicators, Ukraine is also facing a series of concomitant economic problems: a growing trade deficit, industrial decline, shrinking foreign exchange reserves, and the weakening of the hryvnia. Poor economic growth is expected to result in lower than projected budget revenues, which in turn could lead to the sequestration of the budget in December. The decline evident across the key economic indicators in the second half of 2012 brings to a close a period of relative economic stability and two years of economic growth, which had been seen as a significant personal achievement of President Viktor Yanukovych and the ruling Party of Regions.

Ukrainian economy overshadowed by war

Author(s): Tadeusz Iwanski / Language(s): English / Publication Year: 2014

Ukraine’s financial results over the past few months prove that the economic crisis which has been ongoing since mid 2012 has exacerbated. According to data from the Ukrainian Ministry of Economy, Gross Domestic Product for the first six months of 2014 shrank by 3%. In the second quarter, it fell by 4.6%[1] and may further be reduced by as much as 8–10% over the year as a whole. After the first six months of this year, the balance of payments deficit reached US$4.3 billion. After deflation last year, prices grew by 12%, and the hryvnia dropped to a historic low. Although a surplus was seen in Ukrainian foreign trade in goods and services, reaching over US$3 billion at the end of June, its trade volume is shrinking. The main reason behind this deteriorating situation is the actions taken by Russia. Moscow has been fomenting the conflict in Donbas since April, has consistently imposed embargoes on imports of more and more Ukrainian goods and cut gas supplies to Ukraine in June. This has forced the government to focus on the current management of state finances and to carry out budget sequestration twice this year. The government has also used this as an excuse not to implement necessary systemic reforms. The increasing share of military expenditure, the shrinking exports (-5% in the first six months), including in particular to Russia, which until recently was Ukraine’s key trade partner, and the rapid fall in industrial production and investments have all made the situation even worse. All that saves Ukraine from an economic collapse is the loan from the International Monetary Fund and higher taxes, which allows the government to maintain budget liquidity. However, if the conflict in Donbas lasts longer and if Russia continues its economic blackmail, including withholding gas supplies, the economic crisis may prove to be long-lasting.

Ukrainian politics: the balance of forces after three years of war

Author(s): Tadeusz A. Olszanski / Language(s): English / Publication Year: 2017

The political situation in Ukraine is determined primarily by the ongoing war, and the situation of stalemate at the front is raising the level of public impatience. President Petro Poroshenko has consolidated the overwhelming majority of power in his hands, but he is not using it to fulfil his election promises; rather he is focused on strengthening his position. The significant weakening of the People's Front, the coalition partner of the Petro Poroshenko Bloc, as well as the majority of opposition parties has contributed significantly to this state of affairs. Prime Minister Volodymyr Hroysman remains dependent on the head of state, although he has gradually been strengthening his own political position. This has been accompanied by an increase in the importance of the Presidential Administration and the apparatus of the state, whose staff follow the President’s lead. We may also note a rise in the importance of the interior minister Arsen Avakov, who is also building up his own political position while remaining in the shadows. The political determination of the organisations of veterans of the war in Donbas is also noticeable, as is that of the nationalists. Moreover, preparations for the 2019 presidential and parliamentary elections are becoming increasingly important The president’s team are primarily focused on preventing the emergence of any new significant political forces which could threaten the balance of power created after the Revolution of Dignity. It seems that there will be no dissolution of the parliament or change of government in the coming months, a factor which will deepen the present stagnation of the process of reforming the country.

Ukrainians’ EU migration prospects

Author(s): Marta Jaroszewicz / Language(s): English / Publication Year: 2014

The political crisis in Ukraine, particularly the bloodshed seen on 18-20 February and the subsequent Russian intervention in Crimea, has sparked fears of another possible wave of immigrants heading to the EU. However, the country was partially politically stabilised (at least in its central and western parts), and this has made the scenario of a mass migration of people from Ukraine rather unlikely. If there is no civil war in Ukraine, any further development of the political situation in Ukraine may have only an indirect impact on the actual migration. Should the political instability continue, the Ukrainian economy remain in recession while jobs are available for Ukrainian immigrants in the EU, then an increase in the migration of Ukrainian citizens to the EU, including Poland, would be possible. In the short term there may be two characteristic groups of immigrants: (1) young people who will attempt to leave Ukraine for good due to the lack of job opportunities; (2) circulating migrants, mainly from western Ukraine, who will be looking for temporary jobs. Only if the economic downturn trend and political turmoil in Ukraine continues for a longer time, will settlement migration increase.

Under the veneer of decentralisation Ukraine’s modernisation efforts stall due to lack of local government reform

Author(s): Tadeusz Iwanski,Piotr Zochowski / Language(s): English / Publication Year: 2013

President Viktor Yanukovych and his Party of Regions have been repeating the pledge to decentralise power in Ukraine and to give local government a greater decision-making role ever since the party appeared on the Ukrainian political scene. The implementation of this reform is crucial both for the economic recovery of Ukraine’s regions and the overall modernisation efforts of the Ukrainian state.At present relations between central government and the regions are regulated by Soviet-era legislation that fails to address the modern-day challenges facing Ukraine. The political elite in the country, including the opposition, appear to have reached consensus on the importance of the decentralisation reform. The first attempts to implement changes in this area were made in the late 1990s, followed by a comprehensive reform programme developed between 2007 and 2009 by Yulia Tymoshenko’s government.

Visaginas Nuclear Power Plant – still high-risk investment

Author(s): Tadeusz Iwanski / Language(s): English / Publication Year: 2012

The Lithuanian Seimas approved the government-sponsored proposal for the construction of a new nuclear power plant outside the Lithuanian city of Visaginas on 21 June. MPs cleared the government to sign the concession agreement (initialled 30 March 2012) with Japan’s Hitachi Ltd. Under this deal Hitachi becomes the strategic investor in the project and will provide a 1350-megawatt reactor for the plant.Despite its original plans, the Lithuanian government was unsuccessful in securing a Western investor who would be willing to take on a 51% stake in the project. According to Lithuania’s deal with Hitachi, the Japanese company will receive just 20% of the shares in the future NPP, whose total cost has been estimated at 5 billion euros. Although Hitachi’s investment is going to be significantly lower than initially expected, the company’s decision to back the project and supply it with a modern reactor can be seen as a guarantee that the implementation of the project is financially viable. The majority of the risk however will be shouldered by the Lithuanian state, which will retain a 38% stake in the plant. In addition, the government is currently trying to secure additional investors for the project from across the Baltic Sea region. Estonia has already shown interest in buying a 22% stake in the company, while Latvia might finance another 20% of the project.

Walka o samodzielność kanoniczną ukraińskiego prawosławia

Author(s): Tadeusz A. Olszanski / Language(s): Polish / Publication Year: 2018

19 kwietnia Rada Najwyższa Ukrainy na wniosek prezydenta Petra Poroszenki, a 22 kwietnia sam prezydent poparli prośbę Ukraińskiego Kościoła Prawosławnego Patriarchatu Kijowskiego (UPC-KP) i Ukraińskiego Autokefalicznego Kościoła Prawosławnego (UAPC) do patriarchy ekumenicznego (tj. patriarchy Konstantynopola, najwyższego zwierzchnika Kościołów prawosławnych) o przyznanie ukraińskiemu prawosławiu autokefalii. Wiele wskazuje na to, że decyzja o spełnieniu tej prośby już zapadła, a ogłoszenie odpowiedniego tomosu (dekretu patriarchy) nastąpi jeszcze w tym roku. Proklamowanie Ukraińskiego Autokefalicznego Partykularnego Kościoła Prawosławnego (Ukrajinśka Pomisna Awtokefalna Prawosławna Cerkwa, UPAPC) oznaczać będzie początek nowej fali konfliktów konfesyjnych na całej Ukrainie, w tym prawdopodobnie rozłam w Ukraińskim Kościele Prawosławnym uznającym zwierzchność patriarchy Moskwy (UPC). Nie ma bowiem wątpliwości, że pewna, trudna dziś do określenia część wiernych i kapłanów pozostanie lojalna wobec Moskwy, Patriarchat Moskiewski będzie wszelkimi sposobami wspierał ukraińskie struktury Rosyjskiego Kościoła Prawosławnego (RPC), władze Ukrainy będą zaś przeciwdziałać ich rozwojowi.

Walka z korupcją na Ukrainie – w oczekiwaniu na rezultaty

Author(s): Piotr Zochowski,Marta Jaroszewicz / Language(s): Polish / Publication Year: 2017

Od ponad 20 lat głównym problemem niepodległej Ukrainy pozostaje systemowa korupcja. Zawłaszczenie państwa przez grupę polityczno-biznesową pod przywództwem Wiktora Janukowycza było jedną z głównych przyczyn masowych demonstracji społecznych podczas rewolucji godności. Po zmianie władzy w 2014 roku hasła walki z korupcją i oczyszczenia elit stały się jednym z najważniejszych deklarowanych priorytetów nowego prezydenta Petra Poroszenki i dwóch kolejnych premierów Arsenija Jaceniuka i Wołodymyra Hrojsmana. Walka z korupcją pozostaje też głównym warunkiem zachodniej pomocy dla Ukrainy.

Washington’s game of ‘sanctions poker’ Russia awaits America’s decisions

Author(s): Iwona Wisniewska / Language(s): English / Publication Year: 2018

What do the Maidan protests tell us about Ukraine? Diagnosis and prospects for Ukrainian politics

Author(s): Wojciech Kononczuk,Tadeusz A. Olszanski / Language(s): English / Publication Year: 2014

The outbreak of the protests in the Maidan in Kyiv, and also periodically in other Ukrainian cities, has come as a surprise to both the government and the opposition. These rallies have now been ongoing for several weeks and their most striking feature is their focus on citizenship and their apolitical nature and, by extension, a clear attempt to dissociate the protests from Ukraine’s political opposition. Neither Batkivshchyna, UDAR nor Svoboda have managed to take over full control of the demonstrations. On the one hand, this has been linked to the fact that the protesters have little confidence in opposition politicians and, on the other hand, to disputes over a joint strategy and to rivalry between the three parties. As a result, the citizen-led movement has managed to retain its independence from any political actors. As a consequence of the radicalisation and escalation of the protests following 19 January, the political opposition has lost a significant proportion of the control it had been in possession of until then.

Will the construction of a nuclear power plant in Belarus exacerbate the country’s energy dependence on Russia?

Author(s): Kamil Klysinski,Marek Menkiszak / Language(s): English / Publication Year: 2012

During Russian PM Dmitry Medvedev’s working visit to Minsk on 18 July, Russia and Belarus signed a general contract for the construction of a nuclear power plant in Belarus. The signature brought to an end the complex negotiations which had been underway since January 2009 involving the leadership in Minsk, the Russian government and Atomstroyexport, the Russian company that will be the main contractor of the investment.However, the power plant’s future ownership structure, management arrangements and terms and conditions of profit sharing remain unclear. The Belarusian leadership hopes that with the launch of the nuclear power plant, it will be able to reduce gas imports from Russia, gas being the main resource used in producing heat and electricity in Belarus. This should in turn reduce the costs of energy generation. In addition, Minsk expects that the new investment will allow it to export electricity surpluses to the European Union, including Poland. Agreements concerning the power plant have been concluded over the last year or so and, according to these, Russia has acquired partial control of the Belarusian electricity grid, especially with regard to the transmission of energy to foreign markets. Russia is also the sole creditor and contractor for the investment, and the sole future provider of nuclear fuel. Therefore, implementation of the project will exacerbate Minsk’s already significant dependence on Moscow in energy and political terms.

Wybory do Bundestagu – być albo nie być dla liberałów

Author(s): Artur Ciechanowicz / Language(s): Polish / Publication Year: 2017

Porażka FDP w wyborach do Bundestagu w 2013 roku, w których partia nie zdołała pokonać 5-procentowego progu wyborczego, przez wielu komentatorów została potraktowana jako koniec liberałów. Potwierdzały to kolejne przegrane wybory landowe i topniejące szeregi członków ugrupowania. FDP stała się symbolem schorzeń niemieckiego życia politycznego i wad polityków: klientelizmu, koniunkturalizmu, bezideowości i chciwości. Ugrupowanie, które mogło pochwalić się 64-letnią nieprzerwaną obecnością w Bundestagu, udziałem w koalicjach rządowych na przestrzeni 45 lat, dwoma prezydentami RFN wywodzącymi się z jej szeregów i wieloletnim szefem niemieckiej dyplomacji Hansem-Dietrichem Genscherem, w ciągu zaledwie czterech lat (2009–2013), kiedy współrządziło z chadekami, stało się niewybieralne.