The EU passed unanimously a package of economic sanctions against Russia. These sanctions restrict massively the access of Russian state-controlled banks to the EU financial market, the export of high technology for oil extraction and ban arms exports. With these sanctions, the EU finally fell in with the hard-line of the US government against Russia though some governments – like the German government – had hitherto advocated a less conflictive line towards Moscow. Both top U.S. and EU officials put the blame for the Ukrainian war squarely at Moscow’s door. They want make to forget their own role in the emergence of the Ukrainian war which is part of a wider conflict on the nature of the international order. Here the question is whether the international order continues to be rather unipolar and US-dominated or will become more multipolar. Russia as one of the BRICS countries is a possible key country for the emergence of a more multipolar order. And the EU countries have been divided in their relationship with Russia.

The Western governments were happy to see the Soviet Union collapse in the early 1990s. From the very beginning, it has been one pre-occupation of US strategists that a too close relationship between core parts of the EU (particularly Germany) and the new capitalist Russia should not emerge. They feared that a strategic alliance between the EU or core countries of the EU might increase the autonomy of the EU and weaken the global US dominance. Already in the 1990s, the famous US security expert, Zbigniew Brzezinski argued that weaning Ukraine away from Russia would be a key for weakening the international ambitions of Russia. In this context, the Slovak foreign policy expert Alexander Duleba discussed already in 1998 in a booklet of the pro-US Inštitút pre verejné otázky possible scenarios which included armed conflicts for the further development of Ukraine in the geo-political contest. Though the constellation of the present war in Ukraine differs from Duleba’s scenarios, the question of war was already contemplated more than decade ago. The US policy towards Russia and Ukraine, however, has not only shaped by geo-political concerns. Economic interests are involved as well.

As part of the German détente policies of the 1960s and 1970s, the Soviet Union signed a contract with Bonn on the gas exports to Germany in 1969. Since this time, a close energy cooperation between (West) Germany and the Soviet Union and the later Russia has emerged. These economic relations have become even closer since the 1990s. U.S. and British corporations have entered the Russian market as well. However, the Putin government made it clear that foreign capital, including US and British capital, would have only a limited role in Russian oil and gas business. The case of Yukos was emblematic for bringing this message home to Washington and London.

For German, Austrian and some Southeast and Central European gas interests, it became increasingly interesting to establish direct supply roots to Russia which would circumvent the politically highly unstable Ukraine. The North Stream pipeline project (realised) and the South Stream project (presently blocked by the European Commission) emerged out of these concerns. The Anglo-American efforts were directed at diversifying the gas supplies for the EU away from Russia and to achieve Western control over the Ukrainian transit pipeline. The Nabucco pipeline project which was promoted by the European Commission was the strategic project for diversifying gas supplies. It failed because sufficient gas supplies could not be secured.

The EU was divided in its broader policy towards Russia as well. As the consequence of the Iraq war, the relations between the governments of Germany, France and Russia which had opposed the US- (and British)-led aggression against Iraq and seemed to be rather inclined towards a more multipolar international order temporarily became warmer from 2003. This led to a more active EU policy towards Russia as well. However, this honeymoon ended after the German and French opponents to the Iraq – Chancellor Gerhard Schröder and President Jacques Chirac – had left office. At the same time, the US supported the pro-Western opposition Ukraine and Georgia. In both countries, pro-Western governments came to office after strong social protests against the existing oligarchic order. The social order did not change, but the foreign policy orientation did – though only temporarily in the Ukrainian case.

In the form of the Eastern Partnership Policies, the EU has systematised its efforts to wean post-Soviet countries, particularly Ukraine, away from Russia. The signing of Association Agreements which would make the countries concerned adopt parts of the EU norms and, thus, integrate them into the direct EU sphere of influence, has been key to this policy. It was clearly directed against Russia which formulated its own competing integration project, the Eurasian Union. In the case of Ukraine (and Moldavia), it was foreseeable that this could entail massive internal conflicts. For Ukraine, the economic relations with Russia and the EU are of almost equal importance. The more advanced industrial sectors, especially located in the East of the country, are closely linked to the Russian economy. The population is split in two almost equally sized camps which support either a strong EU or a strong pro-Russian orientation.

When President Viktor Janukovyč in the face of Russian pressures and the high economic and social costs of the Association Agreement finally desisted from signing the Association Agreement with the EU in 2013, a wave of social protests started. After repression against the protests, they changed into anti-government protests. Far right wing paramilitary formations – though numerically a relatively small minority in the protest camp – assumed an increasingly strong profile and role in the protests, inter alia occupying government offices in many West and Central Ukrainian towns. Western and Russian official brokered a last minute compromise for a negotiated transition which would have restricted the powers of Janukovyč drastically. The deal aborted and Janukovyč was toppled. A pro-Western coalition of national-liberal and fascist forces assumed office. It acceded to key US, EU and IMF demands. Prime Minister Jaceniuk promotes the partial privatisation of the gas pipeline network. However, in this regards, he is facing even internal opposition in his own political camp.

Though the new government has enjoyed strong legitimacy only in half of the country, it has done almost nothing to address the concerns of the other (Southeastern) half. On the contrary, one of the first acts of parliament was to diminish the status of the Russian language which was a highly symbolic act. The bill was not signed by the president, but the damage had already been done. In line with the ethno-nationalist government project, the import of cultural products (books, films etc.) from Russia is increasingly restricted. The discourse of West Ukrainian nationalist intellectuals which ascribes a “non-European”, Soviet mentality to the East Ukrainians has not been conducive for national unity or reconciliation either.

The Russian government rapidly stepped up the pressure on Ukraine. Paramilitary forces emerged on the Crimea peninsula which was separated from Ukraine and annexed to Russia. Pro-Russian paramilitary forces which profess a mixture of a far right-wing Russian-nationalist and anti-oligarchic discourse started to became active in the Donbas region. They advocate the separation from Ukraine.  Initially, they followed the same tactic as the Ukrainian ultra-nationalist forces in West Ukraine occupying government buildings, but gradually went into armed confrontation. They have supply lines into Russia, but have a local base as well.

Supported by US military aid, the Ukrainian government has gone primarily for a military option which, however, has begun to provoke demonstrations against the massive military call-ups. The hawkish sectors have got the upper hand. It is closing possible communication channels with Eastern Ukraine. For example, the parliamentary faction of the Communist Party which could be non-military interlocutor with a certain standing in Donbas was disbanded, its banning is contemplated.

A peaceful solution would have to address both the international and the internal dimension of the conflict. For the international dimension, negotiating a neutral status for Ukraine – neither EU association or NATO membership nor Eurasian Union membership – would seem essential. However, this question is not even discussed. Internally, pre-conditions for a compromise hardly exist either. There is not a single party with a substantial base or electorate in the whole country. Rifts in the government have surfaced recently. The Pro-Russian separatists are divided, and have a paramilitary rather than a political character. Neither the Ukrainian government nor the separatists are mere puppets of external interests.

The sanctions of the EU and US against Russia will not bring Ukraine any closer to a political settlement. With the sanction against Russia, the EU has primarily positioned itself geo-politically. Outside the US and the EU, the Western sanctions tend to be perceived as hypocritical given the track record of overt and covert military interventions of the US and key West European states. They can be viewed as a warning to BRICS countries as a whole. The tensions around China are already increasing. Faced with the spectre of sanctions, the Russian government already signed a treaty on closer energy relations with his neighbour in the East. The new powers in the South are stepping up their financial cooperation. The conflict in Ukraine is about much more than just the Ukraine.

*Prof.Dr. Joachim Becker

Institute for International Economics and Development
Department of Economics
Vienna University of Economics and Business