Viktor Yanukovych, the president of the Ukraine, has vetoed a last-minute effort to sign a trade agreement between his country and the European Union, Reuters reports. Ongoing talks between the two groups culminated in a summit in Vilnius yesterday, where hopes had re-sprung that some sort of agreement might be reached.
With some Ukrainian officials in support of a deal with the European Union, and EU representatives able to make some concessions to make a pact more attractive to the eastern European country, the prospects of an agreement being brokered looked up for the first time in days. However, expectations fell short when Yanukovych vetoed the deal.
Yanukovych has come across as one of the plan’s most stringent opponents. He has called the $800 million in financing provided by the plan as a trifling sum, claiming that far more in aid money should be made available to his country. He has also refused to comply with requests to rectify corruption and judicial prejudices in his nation. Yulia Tymoshenko, a political rival of Yanukovych, remains in prison for her alleged crimes, where she began a hunger strike earlier this week to protest the lack of an agreement.
According to analysts, the deal could have proven to be exactly what the Ukraine’s economy needs to get going in the wake of the European downturn. The agreement was expected to add 6 percent to the country’s economy, and to save its businesses 500 million euros a year in tariff duties.
The downside from signing the agreement would have been that it could have signaled a rift between the Ukraine and its former overseer, Russia. Vladimir Putin, the Russian president, has allegedly threatened to cut off supplies of natural gas to the Ukraine if it signed a deal with the EU. Already, the Ukraine is worried about the high prices that it pays for energy, hoping to gain a price reduction by allying with Russia instead of with the west.
The economic warfare, to put it bluntly, is not expected to let off anytime soon as tensions have mounted in the Ukrainian capital, Kiev. With opposition leaders denouncing Yanukovych’s veto and thousands gathering in the streets in protest, the Ukrainian leader has been busing in troves of supporters to demonstrate for his cause instead. While violence so far has been limited, there is clearly the potential for the situation to explode, with the attitudes of many in the country contributing to the short fuse.
The Ukraine’s move is good news for Russia’s planned counterpart to the European Union, the Eurasian Union. Expected to be formally launched in 2015, the union has been presaged by a customs union between Russia, Belarus, and Kazakhstan formed several years ago. With the Ukraine appearing to have sided with Russia over the EU — at least as long as Yanukovych remains in power — the country could be the latest addition to the union of former Soviet countries.
Putin’s plans for a Eurasian Union have not come without their fair share of criticism. Some have likened the idea to a re-envisioning of the Soviet Union, calling it nothing more than a manifestation of neo-imperialism. Others have questioned plans for policy changes, highlighting gaps in how currencies, visas, and trade balances will be dealt with. Despite these concerns, Yanukovych’s veto brings the vision of a Eurasian Union one step closer to reality.
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