SPIEGEL ONLINE

SPIEGEL ONLINE

11/24/2014 07:00 PM

Summit of Failure

How the EU Lost Russia over Ukraine

By SPIEGEL Staff

One year ago, negotations over a Ukraine association agreement with the European Union collapsed. The result has been a standoff with Russia and war in the Donbass. It was an historical failure, and one that German Chancellor Angela Merkel contributed to.

Only six meters separated German Chancellor Angela Merkel and Ukrainian President Viktor Yanukovych as they sat across from each other in the festively adorned knight's hall of the former Palace of the Grand Dukes of Lithuania. In truth, though, they were worlds apart.

Yanukovych had just spoken. In meandering sentences, he tried to explain why the European Union's Eastern Partnership Summit in Vilnius was more useful than it might have appeared at that moment, why it made sense to continue negotiating and how he would remain engaged in efforts towards a common future, just as he had previously been. "We need several billion euros in aid very quickly," Yanukovych said.

Then the chancellor wanted to have her say. Merkel peered into the circle of the 28 leaders of EU member states who had gathered in Vilnius that evening. What followed was a sentence dripping with disapproval and cool sarcasm aimed directly at the Ukrainian president. "I feel like I'm at a wedding where the groom has suddenly issued new, last minute stipulations."

The EU and Ukraine had spent years negotiating an association agreement. They had signed letters of intent, obtained agreement from cabinets and parliaments, completed countless diplomatic visits and exchanged objections. But in the end, on the evening of Nov. 28, 2013 in the old palace in Vilnius, it became clear that it had all been a wasted effort. It was an historical earthquake.

Everyone came to realize that efforts to deepen Ukraine's ties with the EU had failed. But no one at the time was fully aware of the consequences the failure would have: that it would lead to one of the world's biggest crises since the end of the Cold War; that it would result in the redrawing of European borders; and that it would bring the Continent to the brink of war. It was the moment Europe lost Russia.

For Ukraine, the failure in Vilnius resulted in disaster. Since its independence in 1991, Ukraine has strived to orient itself towards the EU while at the same time taking pains to ensure that those actions don't damage its relations with Moscow. The choice between West and East, which both Brussels and Moscow have forced Kiev to make, has had devastating consequences for the fragile country.

But the impact of that fateful evening in Vilnius goes far beyond Ukraine's borders. Some 25 years after the fall of the Berlin Wall and almost 70 years after the end of World War II, Europe is once again divided. The estrangement between the Russians and the Europeans is growing with Moscow and the West more inimical toward each other today than during the final phase of the Cold War. It's a reality that many in Europe have long sought to ignore.

The story of the run-up to Vilnius is one filled with errors in judgment, misunderstandings, failures and blind spots. It is a chronicle of foreign policy failure foretold -- on all sides. Russia underestimated the will of Ukrainians to steer their country toward the EU and was overly confident in its use of its political power over Kiev as a leverage.

For its part, the EU had negotiated a nearly 1,000-page treaty, but officials in Brussels hadn't paid close enough attention to the realities of those power politics. Even in Berlin, officials for too long didn't take Russian concerns -- about the encroachment of NATO and the EU into Eastern Europe -- seriously enough. The idea that Moscow might be prepared to use force to prevent a further expansion of the Western sphere of influence didn't seem to register with anyone.

With the special role it plays and the special responsibility it has for Europe, the meltdown also represented a failure for Germany. Foreign policy has long been considered one of Chancellor Angela Merkel's greatest strengths, but even she ignored the warning signs. Merkel has proven herself over the years to be a deft mediator who can defuse tensions or work out concrete solutions. But crisis management alone is not enough for good foreign policy. Missing in this crisis was a wider view and the ability to recognize a conflict taking shape on the horizon. Instead, officials in Berlin seemed to believe that because nobody wanted conflict, it wouldn't materialize.

Merkel did say at the summit that, "The EU and Germany have to talk to Russia. The Cold War is over." But the insight came too late.

Kiev, The Presidential Palace
Feb. 25, 2010

Viktor Yanukovych was sworn in as president of Ukraine on Feb. 25, 2010 by the Verkhovna Rada, the country's national parliament. The first guests he would receive as president were chief European Union diplomat Catherine Ashton and European Commissioner for Enlargement and European Neighborhood Policy Stefan Füle.

Was it a sign?

During his inaugural address, Yanukovych had rejected the clear Western orientation of his predecessor Viktor Yushchenko. Instead, he said Ukraine should become a "bridge" between the East and West. He envisioned Ukraine's future as a "European bloc-free state."

But not long later, he found himself sitting together with Ashton and Füle inside Mariyinsky Palace in Kiev, the official presidential residence. The two had brought a piece of paper with them, which they used to present what they called the "matrix," Yanukovych's choices. It was their own, very bureaucratic way, of describing Ukraine's path to a European future. They handed him the matrix as if it were some kind of gift.

"We have never done this before for anybody," Füle said. Both European leaders considered the paper to be a pledge of confidence.

The "matrix" listed in detail what it would mean for Yanukovych if he engaged himself with the EU. To the left were the conditions he had to fulfill, including things like EU standards or the demands of the International Monetary Fund. On the right, the money was listed that Ukraine would receive if it went down this path toward the West.

Yanukovych was primarily interested in the right-hand column. When he needed money, he had always been in the habit of simply taking it -- from everyone: from his own people; from the Russian Federation; and, of course, also from the EU. Previously, during a stint as prime minister, he had mostly used his power to secure lucrative posts for members of his own clan. Indeed, Yanukovych had enjoyed a dubious reputation dating back to the clan wars in his home region, the Donbass coal basin. Even if he claimed the contrary, he never cared much about Western values. But would Yanukovych really do anything for money?

The president thanked his guests for the "matrix," the "pledge of confidence" that he hadn't actually earned. He had experienced the Europeans as naive do-gooders who were constantly going on about values and human rights but who had no idea about money. He promised both guests that the first trip he would take as Ukrainian president would be to Brussels. They understood it to be a sign, but instead it was but the first of many misunderstandings to come.

Kiev
Jan. 10, 2011

Enlargement Commissioner Füle traveled to Ukraine again that January to warn Yanukovych against making any serious mistakes. Füle was genuinely alarmed.

On Dec. 20, 2010, the Ukrainian Prosecutor General's Office had filed charges against Yulia Tymoshenko accusing her of misuse of state funds. It appeared as though Yanukovych was seeking to get a former political opponent out of the way.

"Don't do it," Füle implored.

Füle was then and remains now a great believer in Europe, in the grand promise of freedom. He believes in Western values, in transparency, in the rule of law and in the EU's soft power. It was inconceivable to Füle that someone who had the opportunity to become a part of Europe could possibly refuse.

"Mr. President," Füle warned. "You're walking on thin ice." The president and the commissioner were meeting alone. Füle, who is Czech, studied in the 1980s at the Moscow State Institute of International Relations, an institution for the Soviet elite and he speaks fluent Russian, obviating the need for an interpreter. He reminded Yanukovych of his promise to reform the Ukrainian justice system. The EU even had a term, "selective justice," for the arbitrariness that prevailed in the Ukrainian legal system. Füle also reminded Yanukovych that, as expansion commissioner, it was also his job to convince EU member states of why Ukraine should belong to Europe.

Was it absolutely necessary for the European public to see just how far removed Ukraine still remained from the Western idea of rule of law? Tymoshenko is one of, if not the only, Ukrainian who is recognizable to people living in the West. She was the icon of the Orange Revolution and, despite her shortcomings as prime minister, had lost little of the glamour the revolution had bestowed upon her. Now Tymoshenko, with her trademark crown braid, threatened to become a martyr.

"You have to be 100 percent sure that this will not become a politically motivated justice," Füle said at the time. Yanukovych smiled. "I promise you that our judiciary is independent," he said.

Kiev, Presidential Palace
Dec. 12, 2011

Events then proceeded as Füle feared they would. In May, the Prosecutor General's Office indicted Tymoshenko a second time. At this point, she had already been in pre-trial detention for three months. It started to look as though she would get convicted. Füle asked if he could visit her in jail.

Yanukovych went over to his desk, which had a Soviet-era desktop switchboard. He pushed a button and the Ukrainian General Prosecutor quickly answered. "I have here the commissioner," Yanukovych said. "He wants to see the Lady in prison."

Kharkiv, Women's Prison
Feb. 14, 2012

It was bitterly cold on the morning the gate to the Kachanivska women's prison was opened for a bus carrying German doctors. A group of protesters stood in front of the gate shouting, "Yulia, Yulia." The group, led by neurologist Karl Max Einhäupl, the head of Berlin's Charité university hospital, then crowded into Tymoshenko's cell, a room with a small barred window beneath the ceiling. Her lawyer was also present, along with two guards. There were two doctors from Germany, three from Canada and one from Ukraine. Tymoshenko was lying on the bed. Her hair was freshly done as was her make-up. She turned to face her visitors, but the pain was so great that she could hardly move.

The EU had transformed Tymoshenko into a symbol of whether Ukraine was indeed compatible with Europe. If she were released, Kiev would be given the seal of approval for its judiciary. If she remained imprisoned, Ukraine would continue to be stigmatized as a country with an arbitrary legal system.

The doctors diagnosed a protracted slipped disc and stated that it wasn't possible to treat Tymoshenko inside the prison. The diagnosis had been a medical one, but it also served as a political verdict. "We traveled there as doctors and not politicians," Einhäupl would later say, "but that's only half the truth."

Brussels, L'Eccailler du Palais Royal Restaurant
May 30, 2012, 7 p.m.

On May 30 of that year, Füle invited two acquaintances for dinner at L'Ecailler du Palais Royal, one of the better restaurants on Brussels' noble Place du Grand Sablon. The guests included former Polish president Aleksander Kwasniewski, who had just been named as the official negotiating Tymoshenko's release on behalf of the EU, as well as Ukrainian oligarch Victor Pinchuk. They sat upstairs on the second floor so they could enjoy a bit more peace and quiet. Füle ordered a nice bottle of wine for the evening so that he could toast Ukraine's future in Europe.

"To Europe," Füle said.

Two months ago, the European Union and Ukraine officially approved the Ukraine-EU Association Agreement. Brussels had begun paving the way for the "Eastern Partnership" four years ago. The partnership envisions tight political and economic ties between the EU and the six former Soviet republics in Eastern Europe and the Caucasus. The agreements had actually been envisioned as consolation prizes for countries that were unlikely to be granted EU membership at any time in the foreseeable future.

Like so many things in the EU, the Eastern Partnership is also a compromise. The Eastern Europeans, particularly the Poles, would prefer to give Ukraine full EU membership. At the very least, they want some kind of buffer placed between their countries and Moscow. But Southern and Western Europeans are not interested in an additional enlargement round. The result is a complicated situation for EU bureaucrats. Sometimes they get so caught up in policy that they fail to see the forest for the trees.

When considering the association agreement with Ukraine, EU officials clearly didn't pay enough attention to what it might mean for Russia. And that night, although Pinchuk didn't want to spoil the positive atmosphere, he also had the feeling that the commissioner was underestimating the danger that Russia might not sit back passively as Brussels sought to bring Ukraine into its sphere of influence. He warned the commissioner.

But Füle had assumed Russia wouldn't have any objections to the treaty. "Russia had never had a problem with the EU," said sources in Brussels familiar with the negotiations. After all, hadn't Putin offered his backing for closer ties back in 2004? During a visit to Spain at the time, the Russian president said, "If Ukraine wants to join the EU and if the EU accepts Ukraine as a member, Russia, I think, would welcome this."

But a lot of time had passed since then and relations had also deteriorated. It is no coincidence that the turning point was an event in Ukraine, the Orange Revolution at the end of 2004, that ensured the election of pro-European President Viktor Yushchenko. Since then, Brussels and Moscow have been both been vying to deepen ties with countries located in the region between Russia and the EU. The term used for this in the West is "competition of integration." But in Moscow, it is seen as a battle over spheres of influence.

"You will have to find a solution that is also acceptable to Putin," Pinchuk warned the commissioner. "Things could get difficult with the Russians." But Füle believed he knew the Russians better. "It's always difficult with the Russians," he said.

Berlin, the Chancellery
Spring 2012

That spring, German Chancellor Merkel was concerned about Tymoshenko, not Russia. Merkel made a phone call to the Ukrainian president in Yalta in Crimea. It was a short time before the European Cup football championships, a tournament hosted that year by both Poland and Ukraine. In April, German President Joachim Gauck had already declined his invitation to participate in a meeting of Central European heads of state in Crimea because of Tymoshenko's incarceration and now Merkel was calling in an effort to persuade Yanukovych to release her. At the beginning of the call, the Ukrainian president tried to charm Merkel. "You speak such good Russian, let's speak without a translator," he suggested. But Merkel blocked him. She spoke with the Ukrainian president as if he were a child. "I want to help," she said, "but you have to free Yulia Tymoshenko."

Brussels, European Council headquarters
Feb. 25, 2013

At the EU-Ukraine Summit on Feb. 25, 2013, Yanukovych announced his intention to work more closely with Putin's customs union. The Eurasian Economic Union was Moscow's response to Brussels' growing influence, with the aim being that of creating a single market comprised of post-Soviet states, with Ukraine at its heart.

For Putin, the Eurasion Union is the core of a foreign policy plan to defend Moscow's traditional zone of influence and with which he wants to win back lost terrain. As is always the case when it comes to Russian foreign policy, it is also a question of status. Brussels did in fact offer Moscow some of the elements of an association agreement, but Russia, a former world power, didn't want to be treated like a second-class citizen in Brussels in the same way as other countries like Moldova or Armenia. Moscow insisted on its status as a major power and demanded equal footing.

The Kremlin then proposed to Brussels that negotiations be conducted between the EU and the Eurasion Union -- directly between the two blocs of power. But European Commission President José Manuel Barroso refused to meet with the leaders of the Eurasion Union, a bloc he considered to be an EU competitor.

"One country cannot at the same time be a member of a customs union and be in a deep common free-trade area with the European Union," the commission president said on February 25. He said that Kiev had to decide which path it wanted to take. The message was clear: Kiev had to choose either Brussels or Moscow.

Kiev, Premier Palace Hotel
July 27, 2013

His name wasn't anywhere on the official program and no one appeared to know that he was coming. The Russian Embassy in Kiev hadn't even been informed that Russian President Vladimir Putin would be making an appearance at a conference of his Ukrainian supporters at the Premier Palace Hotel.

"We will respect whatever choice the Ukrainian government and people make...," he said. "But there are facts that speak for themselves." The statements are far from friendly. Whereas they may have sounded like a promise to those listening in the hall, Putin's comments were both a slap in the face and a threat to the Ukrainian government.

Prior to his speech, Putin had spoken for nearly an hour with Yanukovych in the presidential palace, leaving the Ukrainian president vexed. The talk would fundamentally change Russia's position towards Kiev. Previously, officials in Moscow hadn't believed that the association agreement with Brussels could actually come to pass. The general consensus in the Russian capital had been that the EU would insist on Tymoshenko's release and that Yanukovych would never push through all the uncomfortable reforms that Brussels had demanded.

But now, Putin realized that Yanukoych actually was considering signing the agreement.

Moscow, the Interfax News Agency
July 29, 2013, 9:24 a.m.

Two days later, the Kremlin-aligned news agency Interfax issued a news alert warning Russian consumers against consuming Ukrainian candies and chocolates. The article quoted Gennadiy Onishchenko, Russia's chief sanitary inspector at the time, who had just imposed a sales ban on candy by Variete, Montblanc pralines and Ukrainian milk chocolate because of alleged quality and safety problems. The sweets are made in factories that belonged to Petro Poroshenko (the oligarch and current Ukrainian president) and a television station he owned had been promoting Ukraine's pro-European policies. Shortly thereafter, Moscow imposed other measures in an escalation between Moscow and Kiev dubbed by the international media as the "chocolate war". Although the term may sound sweet, the realities were anything but nice.

By then, at the very latest, officials in Berlin should have realized that Putin was going to take off the kid gloves in the battle over Ukraine.

Berlin, the Office of the German Advisory Group
Sept. 20, 2013

Berlin economists had been doing the calculations for two weeks and now they finally had the decisive figure that Yanukovych's government had been waiting for. Ricardo Giucci, the head of the German Advisory Group that monitors the reform process in Ukraine, already had several impatient emails from Ukrainian Deputy Prime Minister Serhiy Arbuzov's office when he finally hit the send button. His outgoing message included an 18-page report with the title "Impact assessment of a possible change in Russia's trade regime vis-a-vis Ukraine."

The question the report addressed is what it would cost Ukraine if Moscow were to cut its facilitation of trade with Kiev. The document included tables, bar charts and explanations about the customs union. In the end, though, only one thing interested politicians in Ukraine. On page two, under the heading "summary," the report states that "Ukrainian exports to Russia would decrease by 17 percent or $3 billion per year." It provided a solid figure, from Germany, telling the Ukrainian government what it would have a sacrifice for the sake of closer relations with the EU. Should not Kiev be compensated for such a sacrifice?

Washington, IMF Headquarters
Oct. 14, 2013

David Lipton sat down in front of Arbuzov's delegation. He had carried the title of deputy managing director at the IMF since 2011 and served as Christine Lagarde's right-hand man. The Ukrainians who had traveled to Washington found him to be friendly, at least compared to the IMF economists sitting next to Lipton with their frozen smiles exhibiting nothing but contempt for the Ukrainians.

It was the second trip Arbuzov had made to Washington within a period of only two weeks. By then, it had become clear in eyes of the Ukrainians that there could only be an agreement with the EU if Ukraine were to be granted a multi-billion-dollar loan from the IMF.

On Oct. 3, during their first visit, they had sought American support to secure better conditions for a possible IMF loan. The IMF had named conditions during the spring that Kiev considered to be unacceptable. They included a provision that the subsidized price for natural gas be raised by 40 percent and for the Ukraine's currency, the hryvnia, to be devaluated by 25 percent. For Yanukovych, who would have to face re-election in 2015, those steps would have been political suicide. But the Ukrainians also had the impression the IMF was ready to negotiate, not least because Victoria Nuland, the US assistant secretary of state for European affairs, had given her assurances that Washington backed an IMF loan for Ukraine.

Now the Ukrainians had come to present their counterproposal to Lipton, a plan that contained far less than what the IMF had demanded. In terms of negotiations over the EU agreement, the situation was becoming tenuous.

Four Thousand Deaths and an Eastern Ukraine Gripped By War

Berlin, Chancellery
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

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