"America Is Too Broke to Rescue Ukraine"
America Is Too Broke to Rescue Ukraine
by Peter Beinart at the Atlantic
http://www.theatlantic.com/international/archive/2014/03/america-is-too-broke-to-rescue-ukraine/284463/
"SNIP......................
The current Ukrainian crisis has its roots in Vladimir Putins desire to build a Eurasian Unionan economic zone comprising as many former Soviet republics as possiblethat re-establishes Russian regional dominance. Putin badly wants Ukraine to join the bloc. But that desire has collided with the European Unions bid to get Ukraine to sign a free-trade agreement linking it to the West. (EU rules, perhaps unwisely, made doing both impossible).
Last March, then-Ukrainian President Viktor Yanukovych pledged to work toward an EU agreement. Then, in mid-November, he abruptly stopped doing so, sparking the pro-European protests that eventually toppled him. For Yanukovych, the EU dealalthough popular with the Ukrainian publiccarried serious risks. For starters, it would have infuriated Putin. Secondly, it would have required him to release his jailed political foe, Yulia Tymoshenko. Thirdly, bringing Ukraine into compliance with EU regulations would have proved costly. As part of the negotiation, Yanukovych asked for 20 billion in aid. But the EU, struggling with its own severe economic woes, offered less than one-thirtieth that amount: a mere 610 million. The United States, which now speaks gravely about defending Ukraine from Russian aggression, at the time gave Kiev barely any foreign assistance at all.
Then, in mid-December, Russia made its own offer. It pledged to buy $15 billion worth of Ukrainian debt and to discount the price of Russian gas sold to Ukraine by one-third, which amounted to another $7 billion in savings. This money, Putin added, would not entail any increase, decrease, or freezing of any social standards, pensions, subsidies, or salariesa swipe at the IMF-imposed austerity measures that would likely have accompanied an EU deal.
While this gap between Russias massive offer and the Wests meager one helped keep Yanukovych in Moscows orbit, it didnt keep him in power. In late February, he lost control of Kiev to a surging protest movement and fled the countrygiving America and Europe yet another chance to devise economic incentives that could point Ukraine in a pro-Western direction.
.....................SNIP"