The ENP in practice - the European Union's policy towards Russia, Ukraine, Belarus and Moldova one year after the publication of the Strategy Paper. OSW Point of View, June 2005

Clear qualitative changes have taken place in relations between the European Union and its Eastern neighbours over the past year. The European Neighbourhood Policy (ENP) has been playing a significant part in the context of these changes. In the cases of Moldova and Ukraine, which are the countries interested in enhancing co-operation with the EU, the ENP has provided a formula that allows taking steps to implement this objective. The ENP has also contributed to "outlining an alternative" to Belarus' current self-isolation. However, the ENP has first of all given a clear message to Russia by specifying the EU's interests and objectives concerning Eastern Europe. The ENP has clearly stated that the EU wants to build democracy and a free market in those countries, and has signalled that the European Union intends to discuss the issues concerning the countries directly with them, and not through Moscow's offices.

Dialogue with the Eurasian Union on Ukraine – an opportunity or a trap? OSW COMMENTARY No. 154, 2014-12-01

The Eurasian Union (or, to give it its full name, the Eurasian Economic Union, EEU) is Russia's flagship project, by use of which it aims to institutionally subordinate the post-Soviet states to itself using political ties and the projected common economic space. The Kremlin has so far managed to persuade Belarus and Kazakhstan, and tentatively also Armenia, to join this integration project, which on the surface looks like a multilateral initiative but in reality conceals a network of bilateral relations centred on Russia. However, in order for Russia to reconstruct its influence in its neighbourhood permanently and without change, it is of key importance that Ukraine is incorporated into the EEU. That still seemed feasible even in 2013, but the Maidan and the Russian-Ukrainian war have undone this possibility. However, they also opened up an alternative scenario for Russia, one in which the Western states recognise the Eurasian Union as a legitimate partner in discussions about a new order in Europe with a view to restoring peace in Ukraine. It is worth taking into account the strategic consequences of that scenario. We need to consider if the idea which Moscow has been lobbying for – and which has found some supporters in Brussels and Berlin – threatens to take us back to the Cold War system of geopolitical blocs and implies recognition of Russia's dominance over Ukraine and the other Eastern Partnership countries?

First steps towards into the unknown. The possibilities prospects of unconventional gas extraction in Ukraine. OSW Commentary No. 106, 2013-04-24

Ukraine’s deposits of unconventional gas (shale gas, tight gas trapped in non-porous sandstone formations, and coal bed methane) may form a significant part of Europe’s gas reserves. Initial exploration and test drilling will be carried out in two major deposits: Yuzivska (Kharkiv and Donetsk Oblasts) and Oleska (Lviv and Ivano-Frankivsk Oblasts), to confirm the volume of the reserves. Shell and Chevron, respectively, won the tenders for the development of these fields in mid 2012. Gas extraction on an industrial scale is expected to commence in late 2018/ early 2019 at the earliest. According to estimates presented in the draft Energy Strategy of Ukraine 2030, annual gas production levels may range between 30 billion m3 and 47 billion m3 towards the end of the next decade. According to optimistic forecasts from IHS CERA, total gas production (from both conventional and unconventional reserves) could reach as much as 73 billion m3. However, this will require multi-billion dollar investments, a significant improvement in the investment climate, and political stability. It is clear at the present initial stage of the unconventional gas extraction project that the private interests of the Ukrainian government elite have played a positive role in initiating unconventional gas extraction projects. Ukraine has had to wait nearly four decades for this opportunity to regain its status of a major gas producer. Gas from unconventional sources may lead not only to Ukraine becoming self-sufficient in terms of energy supplies, but may also result in it beginning to export gas. Furthermore, shale gas deposits in Poland and Ukraine, including on the Black Sea shelf (both traditional natural gas and gas hydrates) form a specific ‘European methane belt’, which could bring about a cardinal change in the geopolitics and geo-economics of Eastern and Central Europe over the next thirty years.

Under the veneer of decentralisation. Ukraine's modernisation efforts stall due to lack of local government reform. OSW Commentary No. 102, 2013-02-12

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. In 2012, the Constitutional Assembly under the President of Ukraine appointed a team of experts who drafted a document detailing the reform of local government and the territorial organisation of power1. The document envisages the implementation of what effectively are two major reforms: (1) an administrative-territorial reform, which would help consolidate the fragmented administrative structure, creating larger and more economically self-sufficient administrative units, and (2) local government reform, focusing on creating clearly defined powers for local authorities with a view to securing government funding for specific tasks delegated from central government. Nonetheless, despite these measures, and in spite of the rhetoric coming from President Yanukovych and other members of the Party of Regions, it seems unlikely that the reform will be implemented in the foreseeable future. A series of concrete political decisions taken by the president over the past three years indicate that Yanukovych has not abandoned his plan to build a highly centralised political system. This in turn limits the capacity to govern of local authorities and further restricts the sources of funding for Ukraine’s regions. This apparent resistance to change stems from the fact that by implementing the proposed reforms, the president and his political allies would be forced to relinquish much of their control over the political processes taking place in the country and would have to free up the distribution of budgetary resources between Kyiv and the regions. The implementation of the reform within the specified timeframe (i.e. by 2015) is also unlikely due to the upcoming presidential election and the deteriorating economic situation in Ukraine. Without a comprehensive reform of local government, however, Ukraine will be unable to undertake effective modernisation measures, which are key for the socio-economic development of the country’s regions.

The Ukraine crisis so far. [EPC SPECIAL COLLECTION]

Collection of papers recently published by the European Policy Centre on the crisis involving Ukraine, Russia and the European Union

Rebalancing the EU-Russia-Ukraine gas relationship. Bruegel Policy Contribution ISSUE 2014/15, DECEMBER 2014

The October 2014 agreement on gas supplies between Russia, Ukraine and the European Union did not resolve the Ukraine-Russia conflict over gas. The differences between parties in terms of objectives, growing mistrust and legacy issues make it unlikely that a long-term stable arrangement will be achieved without further escalation. Without EU pressure and support, Ukraine is likely to enter a new unfavourable gas arrangement with Russia, which could have repercussions beyond the energy sector. Key highlights: To reduce prices and increase the security of imports, the EU as a bloc should redefine its gas relationship with Russia and Ukraine and overcome the diverging interests of EU member states on second-order issues. Implementation of a joint strategy rests on enforcement of EU competition and gas market rules, a strengthened role for the Energy Community and the establishment of a market-based instrument for supply security. For Ukraine, the EU should serve as an anchor for comprehensive gas sector reform. Contingent on Ukraine’s reform efforts, EU financial and technical assistance, the enabling of reverse flows from the EU to Ukraine and pressure on Gazprom, should eventually enable Ukraine to obtain a sustainable gas-supply contract with Russia. This should make a sustainable and mutually beneficial Russia-Ukraine-EU gas relationship possible. However, during the transition, the EU should be prepared for possible frictions.

Preventing collapse in Ukraine: The EU should finance the grass roots directly. CEPS Commentary, 10 December 2014

With the aim of averting the total collapse of the Ukrainian economy, Daniel Gros and Steven Blockmans urge the EU to ​offer a minimum of macro-financial assistance to improve governance, fight corruption and harmonise laws with the EU acquis, while beefing up financing channelled directly to the grass roots.

The Party of Regions monopolises power in Ukraine. OSW Commentary No. 40, 2010-09-29

Since the Party of Regions took power in Ukraine, the process of strengthening the executive branch of government at the expense of the others, together with the instrumental use of the law, has been progressing steadily. By seeking to restrict criticism of the government, the ruling party is aiming at marginalisation of opposition groups and establishing informal control over the main media (largely by exerting pressure on their owners). The role of the Security Service of Ukraine (SBU) is growing, as it is used increasingly frequently to put pressure on Western-oriented NGOs. The government’s control over the judiciary is expanding. These trends had existed before the Party of Regions’ ascension to power, but they were much weaker, as the previous governments did not enjoy such a strong position or the ability to achieve their ends so efficiently. The Party of Regions is planning to take another step towards total power during the local elections scheduled for October 2010. The party is determined to establish control over the local self-governments; to this end, it has amended the legislation in a way which now undermines local civil initiatives. These changes not only illustrate the interests and political standpoint of the ruling elite; they also result from systemic reasons, and these are deeply rooted in the Soviet past. The present Ukrainian state has evolved through the evolutionary transformation of the Ukrainian Soviet Socialist Republic. As a result, the main features of the previous system have been sustained, including the weakness of the representative bodies and the instrumental use of the law. Twenty years into its independent development, Ukraine has developed a merely formal democracy, which is distant from EU standards.

Ukraine and Russia: a hindered rapprochement. OSW Commentary No. 44, 2010-12-15

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.

The EU-Ukraine Action Plan on Visa Liberalisation: an assessment of Ukraine's readiness. OSW Commentary No. 45, 2011-01-17

The Action Plan on visas adopted during the recent EU-Ukraine summit is a success for Ukraine. It is the first time that Kyiv has succeeded in obtaining a definition of the conditions and criteria whose fulfilment will enable Ukraine to apply for the lifting of EU visas for its citizens. Ukraine's strong point has been its political will; the lifting of this visa regime has been a priority for all Ukrainian governments since 2005. Since Viktor Yanukovych became president, Ukraine has adopted or prepared key legal acts that brought it nearer to European standards in the area of border and migration management. One of Kyiv's strengths is also its relatively well reformed and efficiently managed border service. Moreover, illegal transit migration via Ukraine is decreasing, and fewer Ukrainians are trying to enter or stay in the EU illegally. Also, Kyiv has efficiently implemented the EU-Ukraine readmission agreement. The hardest task for Ukraine will be to meet the EU’s expectations concerning values, the condition of Ukrainian democracy, and the rule of law. Corruption remains the main barrier to Ukraine's development and modernisation; the courts are weak and the judicial system inefficient. The main undertaking of the new migration service that is being formed at the moment will be to create a civil system of registration, monitoring and regulating the stays of foreign nationals. This may prove difficult, as the supervisory authority (the Ministry of the Interior) remains an unreformed, police-type bureaucratic institution. Ukraine is lagging behind countries such as Russia, Belarus and Moldova when it comes to the introduction of biometric documents. Another problem is the lack of an electronic information system on foreign nationals, visas and border crossings which would be accessible to all the relevant services and institutions. For these reasons, the complete abolition of visas seems to be a longterm perspective, especially considering that many EU countries, which themselves are faced with the problem of migrants’ integration, are rather sceptical about the further liberalisation of movement of people with their eastern neighbours. In the immediate future, if Ukraine meets some of the requirements set by the EU, it will be able to seek the extension of the visa facilitations that have been in operation since 2008.

Ukraine's cooperation with the IMF - unfulfilled hopes for deeper reforms. OSW Commentary No. 52, 2011-06-15

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. The difficulties with fulfilling the obligations made to the IMF reflect the wider problem with implementing reforms in Ukraine, as the Party of Regions promised after taking power. Changes which do not affect the interests of influential lobbies are quite easy to carry out. Often, however, these changes are not conducive to the economy’s liberalisation; moreover, the influential lobbies are successful in blocking reforms that could harm their businesses. Another impediment to the changes is that some reforms are likely to bring about painful social consequences, and that can affect public support for the ruling group. Even though theoretically possible, it does not seem likely that Ukraine’s cooperation with the IMF will be terminated. But even if this cooperation is continued, deeper reforms in Ukraine are likely to be postponed until after the parliamentary elections in autumn 2012.

The Revolution that never was. Five years of 'Orange' Ukraine. OSW Point of View (Policy Brief), November 2009

On the fifth anniversary of the Orange Revolution and in the final period of the presidency of Viktor Yushchenko, who then embodied the hopes for state reform, a tentative assessment of the situation in Ukraine is appropriate. Did the revolutionary social upheaval bear revolutionary fruit? Have democratic mechanisms strengthened? Has the post-Soviet oligarchic state model been overcome? Has media freedom expanded? Has there been any progress with regard to economic transformation? Has integration with the European structures materialised? Five years on, what remains of the hopes of millions of Ukrainians and of the goodwill of the international community?

Ukraine, Another point of view. OSW Point of View (Unspecified), February 2003

Ukraine is a difficult partner for the West, and recently, it has been perceived as an enfant terrible because of the Kolchuga affair. Western and Polish press describe Ukraine as an authoritarian regime plagued by an internal crisis or even threatened by destabilisation. This picture is certainly one-sided and oversimplified, and it fails to accurately present the reality of Ukraine. Apart from experiencing definitely adverse political developments, Ukraine has also been successful in some ways in terms of its internal and foreign policies and the economy. At the same time, certain processes take place among the Ukrainian elites, that might be difficult to capture in social surveys, but may become the starting point for the future modernisation and democratisation of the country. To realise that there are some favourable aspects to the changes occurring in Ukraine is not to recognise Ukraine as a country heading to democratisation and a market economy in the Western sense. Still, it is worthwhile to understand that the positive developments, even if isolated, do occur in Ukraine and that they could be strengthened by adequate policies of the Ukrainian authorities and the Western states.

Ukraine and Russia: mutual relations and the conditions that determine them; The Republic of Belarus or the Belarussian Republic? OSW Study 3/2001

Ukraine and Russia: Among all of the countries that border Ukraine, the Russian Federation is its most important partner. Ukraine's relations with Moscow are the key issue of its foreign policy to such an extent that each option of the Ukrainian foreign policy is first and foremost a choice as to the shape of its relations with Russia. This is mainly a consequence of Ukraine's geographic and geopolitical situation, the legacy of many centuries of political, economic and cultural bonds between these two countries, as well as Russia's inevitably dominant position in their mutual relations. Belarus: Belarus has not broken off its bonds with Moscow after the break-up of the Soviet Union. Throughout the whole period of the Belarussian independence we can observe the country's strong political, economic and military dependence on Russia. This dependence allows Russia to control, and even shape, the processes that take place in Belarus in all the areas mentioned.

2002 Parliamentary elections in Ukraine: Events, results and consequences; Ukraine's Parliamentary system after the elections. OSW Study 8/2003

2002 elections: On 31 March 2002, parliamentary elections were held in Ukraine. As expected, they were a major success for the centrist-rightist coalition focused around former Prime Minister Viktor Yuschenko. The communists emerged significantly weaker from the vote, and the "party of power" achieved a poor result. Yet, due to the mixed electoral law (half of the deputies were elected in single-mandate districts), the latter block, firmly supported by President Leonid Kuchma, resulted as the main force in Parliament. The results of particular parties and blocks were as follows: Viktor Yuschenko's Block received 23.57% of votes and 112 seats, the Communist Party of Ukraine - 19.98% of votes and 66 seats, the "For One Ukraine" block - 11.77% of votes and 101 seats, Yulia Tymoshenko's Block - 7.26% of votes and 22 seats, the Socialist Party of Ukraine - 6.87% of votes and 22 seats, and the Social Democratic Party of Ukraine (united) - 6.27% of votes and 24 seats. This shows how the mixed electoral regulations favour "For One Ukraine" and act against Yuschenko's block. One should note, however, that the latter gained the support of less than one quarter of voters. After the election: The dominant force in Ukraine's Verkhovna Rada, elected in March 2002, are the deputies of "One Ukraine", a fraction of the pro-presidential centre. "One Ukraine" has refused to admit any of the opposition's representatives (either from the right or left wings) into the parliament's presidium, but has accepted opposition-appointed heads of many parliamentary commissions. Viktor Yuschenko's "Our Ukraine", which has been the largest parliamentary fraction since June, attempted to proclaim itself the centre of the parliamentary majority, but its policy was awkward and inconsistent, and the main success of this club was that it didn't break up. Viktor Yuschenko's moves have been particularly incoherent and they undermined the image of Yuschenko as Ukraine's future leader, created throughout the course of the electoral campaign. In autumn, the main oligarchic groups and their representative fractions ("One Ukraine", which proved to be a useless instrument, was dissolved in June), reached a compromise with the president. It was agreed that the new prime minister should be a Donetsk clan representative (Viktor Yanukovych), and that the Dnipropetrovsk clan should appoint the president of the National Bank of Ukraine (this position went to Serhij Tihipko). The Kyiv clan obtained the President's Administration (Viktor Medvedchuk was appointed in spring) and a considerable number of parliamentary commissions. The president's interests in the government are to be protected by Mykola Azarov, former Head of the State Tax Administration. This compromise "package" was designed to secure the shares of the main oligarchic clans in the power and the president's strong position as mediator.