Summit of Failure How the EU Lost Russia over Ukraine
Part 2: Four Thousand Deaths and an Eastern Ukraine Gripped By War
Oct. 16, 2013
In Germany, though, nobody seemed to be aware of the situation. One month after German parliamentary elections, Merkel spoke on the phone with the Russian president for the first time in quite a while. Vladimir Putin congratulated her on her party's election victory and they agreed to hold a joint cabinet meeting as soon as possible -- a meeting that would never be held.
In addition, the chancellor communicated her concern to the Russian president "over the arrests of the crew of the Greenpeace boat held in Russia," as it says in a press release about the call. Ukraine wasn't mentioned in it.
Merkel did refer to the issue in the phone call, but when Putin refused to take the bait, she let it go. Merkel had no telephone contact with Yanukovych at all at the time.
Brussels, Office of the Enlargement Commissioner
Oct. 17, 2013
Ukraine was facing insolvency while, at the same time, Russia was busy heaping pressure on Kiev. Although Russian sanctions had long since indicated otherwise, Berlin and Brussels were not taking Ukrainian concerns, and the country's fear of Russia, seriously. The Ukrainians, they seemed to think, were simply interested in driving up the price for their ultimate signature.
Shortly after his visit to the IMF, Arbuzov headed for Brussels to present Enlargement Commissioner Füle with the numbers calculated by the German advisory group. He believed that the numbers spoke for themselves, but Füle didn't take them seriously. "Did you also request calculations," he asked smugly, "about what would happen to the Ukrainian economy in the case of a meteorite strike?"
Berlin, Foreign Ministry
Oct. 17, 2013
Ukraine's ambassador in Brussels, Konstantin Yeliseyev, embarked on a "special mission" through the EU to what the Ukrainians referred to among themselves as "the problematic capitals." Given the acute situation, he wanted to persuade the Europeans to abandon their demands for Tymoshenko's release.
Yeliseyev's tour took him to The Hague, Copenhagen, Rome, Madrid, Paris and London. But his final and most challenging stop was Berlin. First, Yeliseyev met with Merkel's foreign policy advisor Christoph Heusgen before heading to the Foreign Ministry for a meeting with State Secretary Emily Haber.
Haber in particular demonstrated little enthusiasm for a compromise. When the ambassador sought to explain the Ukrainian position, Haber interrupted him saying: "Your Excellency, we are familiar with all of your arguments," adding that it was not necessary to discuss them for as long as Tymoshenko remained behind bars. Yeliseyev pleaded with Haber to abandon her focus on Tymoshenko, but to no avail.
The closer the summit approached, the greater the EU pressure became on the Germans to cease focusing so much attention on the case of Yulia Tymoshenko. The Poles in particular insisted that the issue could not be allowed to torpedo the association agreement. Behind closed doors, President Bronisaw Komorowski said: "Never again do we want to have a common border with Russia." And Germany began to revisit its position as a result, but it was much too late.
Merkel has often been praised for her pragmatism, particularly when it comes to foreign policy. The chancellor's ability to reduce a political problem to its single soluble element and then to focus all her energies on that element is considered to be one of her great strengths. But her pragmatism reached its limits in this case. Focusing too intently on the trees blinds one to the forest -- and that proved to be Merkel's decisive error. As Berlin continued to focus its efforts on Tymoshenko, it failed to recognize the real danger: The Russian Federation's power play.
Moscow, Military Airport
Nov. 9, 2013
It doesn't happen often that Vladimir Putin attends a meeting at a site other than the Kremlin or his residence on the outskirts of Moscow. But on that Saturday evening in October, he unexpectedly agreed to a confidential tête-à-tête at the military airport not far from the Russian capital. His interlocutor? Viktor Yanukovych.
It was the second conversation between the two presidents within the space of just a few weeks, with the first having taken place on Oct. 27 in the Black Sea resort of Sochi.
Putin had nothing but disdain for Yanukovych, loathing the Ukrainian leader's constant wavering. In the past, he had often left Yanukovych waiting for hours like a supplicant and the Kremlin was convinced of Yanukovych's unreliability. Though the man from eastern Ukraine was much less pro-European than his predecessor, he had continued to stubbornly resist requests from Moscow.
Ever since Putin came to realize that Yanukovych was in fact considering signing the EU association agreement, he had been regularly sending Sergey Glazyev to Ukraine to lay out the possible Russian response. Glazyev, Putin's advisor on economic integration in the post-Soviet regions, had been born in Ukraine. But he dutifully issued Russian threats to eliminate benefits and spoke at length of the potentially negative consequences for Ukraine. "The association agreement is suicide for Ukraine," he said. In October, Glazyev visited Yanukovych three times, on one occasion bringing along a Russian translation of the thousand-page draft association agreement because the EU had only sent an English version of it to Kiev.
During Putin's meetings with Yanukovych in Sochi and Moscow, Putin promised subsidies and economic benefits worth around $12 billion annually, including discounted prices for oil and natural gas. Conversely, he also threatened to launch a trade war that would drive an already fragile Ukrainian economy to ruin. Experts in Brussels also believe that he may have told Yanukovych what Moscow knew about his dealings with the EU. In Russian, such information is known as "Kompromat," a word that comes out of KGB jargon and refers to compromising details known about a leading figure.
Following these meetings, Yanukovych's mood changed markedly. He became quieter and ceased holding the endless monologues for which he had become notorious. "Viktor, what's wrong," his Brussels partners would ask. But he evaded such questions, instead speaking in insinuations and innuendos. He proved unwilling to say much about the Russians.
Berlin, the Bundestag Federal Parliament
Nov. 18, 2013
Ten days prior to her trip to Vilnius, Merkel delivered a government statement focused on the approaching summit. "The countries must decide themselves on their future direction," Merkel said, adding that she had "raised this issue many times" with Vladimir Putin. But reality looked different, with Kiev having long since ceased to be able to make decisions independently of Moscow. Merkel, though, continued to focus on the symbolism of Tymoshenko case and on "democracy, the rule of law and civil liberties."
Washington DC, IMF Headquarters
Nov. 19, 2013
The IMF finally got around to composing a reply to Arbuzov, Ukraine's first deputy prime minister, in response to the Ukrainian proposal that Arbuzov had delivered a month earlier.
It was written by Reza Moghadam, a native of western Iran who had been with the IMF for 21 years. The director of IMF's European Department, Moghadam had plenty of experience with countries that believed they could engage in marketplace-style bartering with the IMF.
"Dear Mr. Arbuzov," Moghadam wrote with barely disguised condescension, "thank you for sharing with us the Ukrainian authorities' latest proposals for policies that could be supported by a possible Stand-By Arrangement with the IMF." The fund, he wrote dismissively, was pleased that the Ukrainian government had recognized the need for a change in course. But Moghadam required just a single sentence to dismantle Kiev's counterproposal. "In our view, overall the proposals still fall short of the decisive and comprehensive policy turnaround that is needed to reduce Ukraine's macroeconomic imbalances," he wrote.
Kiev, Presidential Palace
Nov. 19, 2013
At Barroso's behest, Füle traveled to Kiev once again to meet with Yanukovych -- and the Ukrainian president got straight to the point. In talks with Putin, Yanukovych told Füle, the Russian president explained just how deeply the Russian and Ukrainian economies are interconnected. "I was really surprised to learn about it," Yanukovych said.
Füle couldn't believe what he was being told. "But Mr. President, you have been governor, you have been prime minister, you have been president for a number of years now. Certainly you are the last person who needs to be told about the level of cooperation, interconnection and interdependence of the Ukrainian and Russian economies. Needless to say, the association agreement does not have any negative impact on that," Füle said.
"But there are the costs that our experts have calculated," Yanukovych replied. "What experts?" Füle demanded to know. The Ukrainian president described to his bewildered guest the size of the losses allegedly threatening Ukraine should it sign the agreement with the EU.
Later, the number $160 billion found its way into the press, more than 50 times greater than the $3 billion calculated by the German advisory group. The total came from a study conducted by the Institute for Economics and Forecasting at the National Academy of Sciences of Ukraine and it was a number that Yanukovych would refer to from then on.
"Stefan, if we sign, will you help us?" Yanukovych asked. Füle was speechless. "Sorry, we aren't the IMF. Where do these numbers come from?" he finally demanded. "I am hearing them for the first time." They are secret numbers, Yanukovych replied. "Can you imagine what would happen if our people were to learn of these numbers, were they to find out what convergence with the EU would cost our country?"
Brussels, Residence of the Ukrainian Ambassador to the EU
Nov. 19, 2013, 10:15 p.m.
Konstantin Yeliseyev withdrew to his residence to watch Ukraine play France in the second leg of their qualifying battle for the World Cup in Brazil. Ukraine had won the first leg 2:0 in Kiev and now it was Paris' turn to host. It was the 75th minute, just after France had scored to go up 3:0, when Yeliseyev's mobile phone rang. An enraged Füle was on the line, having just left his meeting with Yanukovych. "Listen," he said to Yeliseyev, "I now have the feeling that you aren't going to sign the association agreement in Vilnius."
Paris, Stade de France, VIP Seats
Nov. 19, 2013, 10:45 p.m.
The game had come to end with a French victory, meaning Ukraine would not be heading to Brazil. Pinchuk, the Ukrainian oligarch, was standing in the VIP section of the stadium not far from French President François Hollande when his telephone rang. It was Aleksander Kwasniewski, the former president of Poland. Kwasniewski had also just come from a meeting with Yanukovych in Kiev's presidential palace and he too was furious. "He tricked us!" Kwasniewski shouted into the phone. "Yanukovych isn't going to sign. He is a swindler, a notorious liar!"
Kiev, Deputy Prime Minister's Residence
Nov. 20, 2013
Deputy Prime Minister Arbuzov and his advisors were examining the letter from the IMF, unaware for the moment that negotiations were headed toward failure. Inside the government in Kiev, Arbuzov had spent months promoting Europe against the pro-Russian faction surrounding Prime Minister Mykola Azarov and now he looked like a fool. Every sentence he read sounded like a personal indignity. The IMF European Department director hadn't even addressed Ukraine's deputy prime minister with his correct title. Arbuzov was fully aware that his opponents would jump all over him at the next cabinet meeting.
Kiev, On the Way To the Airport
Nov. 21, 2013
Yanukovych was on the way to the government terminal of Kiev's Boryspil International Airport ahead of a state visit to Vienna when he finally found the time to deal with legal ordinance Nr. 905-r. The ordinance contained instructions to his government to cease working towards the association agreement with the EU for "reasons of Ukrainian national security." Andriy Klyuyev, secretary of Ukraine's national security council, was sitting next to him in the government Mercedes.
Yanukovych undertook a few minor changes to the ordinance focused on his wish to establish a trilateral commission made up of representatives from Ukraine, Russia and the EU to determine the economic damages an EU association agreement might cause. At the airport, he handed the document to Klyuyev, ordering him to hurry back to the cabinet to change the day's agenda. It would spell the end of the negotiations aimed at signing an EU association agreement in Vilnius. It would be the final rebuff of the EU.
Vienna, Presidential Suite in Hotel Sacher
Nov. 21, 2013, 7:30 p.m.
Yanukovych was sitting at a Rococo table waiting for the glasses to be filled. "Mr. President," Yanukovych said, "I am grateful that you took the time. I didn't want to tell you about what happened today in passing."
The president he was speaking to was Heinz Fischer, Austria's head of state. Fischer was still reeling from an incident that had taken place a few hours earlier, when the two were sitting across from one another at lunch in the Hofburg, the president's official residence and one-time home of Austro-Hungarian royalty. They had just been served coffee with their dessert when each was simultaneously handed a slip of paper by their aides. Fischer's slip read: "Ukraine stops preparations for agreement with the EU." It was a news alert from the Austrian news agency APA.
Fischer was genuinely flabbergasted; the news invalidated everything they had been discussing up to that point. He leaned over to Yanukovych and said: "Now I really don't know what is going on anymore. Has this happened with your knowledge?"
"It was an unavoidable decision," Yanukovych said later that evening in the Sacher Hotel. The two of them were now alone with an interpreter in the best suite that the Austrian president's office had been able to book that afternoon on such short notice. It was a last, desperate effort to establish a sense of proximity that had long since vanished.
"Please understand me. I simply can't sign it now," Yanukovych said. "I had to urgently turn towards Moscow, but I want to keep the doors to Europe open. Please don't see this as a rejection of Europe."
The two presidents spoke until just before midnight, with Yanukovych doing most of the talking in the over four-hour-long meeting. An official notice on the meeting compiled later by Fischer's office mentioned the verbose explanations offered by Yanukovych: "His remarks were repeatedly complemented or interrupted by very long and elaborate comments on the historical and political developments of the last 20 years," the note read.
Vilnius, European Union Representation
Nov. 28, 2013, Midday
For a brief moment, Serhiy Arbuzov thought there might still be hope. Yanukovych's negotiator had headed to Lithuania's EU representation to launch one last attempt to reach agreement with Füle and his aides. "Today, we are going to make a bold chess move," one of Füle's people said, refusing to elaborate. Were the Europeans going to offer Ukraine financial assistance after all?
Vilnius, Kempinski Hotel
Nov. 28, 2013, 6:30 p.m. to 8:30 p.m.
They were all waiting for Yanukovych. It was the last chance they had to meet with the Ukrainian president to try and convince him to sign the agreement despite all that had happened. Though it was essentially a hopeless attempt, Barroso and European Council President Van Rompuy had resolved to try the impossible. Van Rompuy had brought two copies of the association agreement with him to Vilnius, ready to be signed.
After a few minutes, Yanukovych showed up with his interpreter, the Ukrainian ambassador to the EU and a handful of aides. That was unusual; in the past, Yanukovych had always conducted the most important talks on his own. The greeting was brief and the roles were reversed. This time around it was the EU that wanted something: Yanukovych's signature.
Barroso was visibly nervous. Ukraine's economy, he said, would profit considerably in the long term from closer ties with the EU. "Poland and Ukraine had roughly the same gross domestic product when the Berlin Wall fell. Now, Poland's is roughly three times as large," he said. And then came the "bold chess move" that had previously been hinted at. Barroso said that Brussels would be willing to abandon its demand that Tymoshenko be released.
Yanukovych was dumbfounded. Didn't Brussels understand that other issues had long since become more important? The talks became heated and Van Rompuy, not exactly known for his quick temper, lost his cool. "You are acting short-sightedly," he growled at Yanukovych. "Ukraine has been negotiating for seven years because it thought that it was advantageous. Why should that no longer be the case?"
Outside, the reception for the heads of state and government had long since gotten underway and EU negotiators understood that Yanukovych could no longer be budged. After two hours, Barroso said: "We have to go." He and Van Rompuy briefly shook Yanukovych's hand and shut the door behind them.
When the German delegation, under Merkel's leadership, met with Yanukovych the next morning for one final meeting, everything had already been decided. They exchanged their well-known positions one last time, but the meeting was nothing more than a farce. In one of the most important questions facing European foreign policy, Germany had failed.
But Putin, too, had miscalculated. That same night, thousands of demonstrators collected on the Maidan (Independence Square) in Kiev. Three months later, Yanukovych would be forced to flee the country and Putin would annex the Crimean Peninsula. Thus far, the conflict has claimed the lives of 4,000 people and eastern Ukraine remains gripped by war.
In his speech in Berlin last December marking the beginning of his term as foreign minister, Frank-Walter Steinmeier said: "We should ask ourselves ... whether we have overlooked the fact that it is too much for this country to have to choose between Europe and Russia." Füle is likewise convinced that the EU confronted Ukraine with an impossible choice. "We were actually telling Ukraine : 'You know guys, sorry for your geographic location, but you cannot go east and you cannot go west,'" he says.
More than anything, though, the Europeans underestimated Moscow and its determination to prevent a clear bond between Ukraine and the West. They either failed to take Russian concerns and Ukrainian warnings seriously or they ignored them altogether because they didn't fit into their own worldview. Berlin pursued a principles-driven foreign policy that made it a virtual taboo to speak with Russia about Ukraine. "Our ambitious and consensual policy of the eastern partnership has not been followed with ambitious and consensual policy on Russia," Füle says. "We were unable to find and agree on an appropriate engagement policy towards Russia."
Russia and Europe talked past each other and misunderstood one another. It was a clash of two different foreign policy cultures: A Western approach that focused on treaties and the precise wording of the paragraphs therein; and the Eastern approach in which status and symbols are more important.
Four months after the Vilnius summit, the political portion of the association agreement between Brussels and Kiev was finally signed with the economic section following three months after that. But the price Ukraine paid for the delay has been enormous. And this time, Russia has a voice in the matter. There are 2,370 questions that must be resolved with Moscow before the agreement can come into force. It will almost certainly take years -- and it is the last joint issue about which Moscow and the EU are still speaking.
By Christiane Hoffmann, Marc Hujer, Ralf Neukirch, Matthias Schepp, Gregor Peter Schmitz and Christoph Schult
- Part 1: How the EU Lost Russia over Ukraine
- Part 2: Four Thousand Deaths and an Eastern Ukraine Gripped By War