Adrian Karatnycky: Governments Should Act to Ease Fiscal Crisis, Russia’s Hostility
The US and EU governments should take early steps to help stabilize Ukraine as a disparate coalition struggles to restore government and order following the violent chaos of President Viktor Yanukovych’s ouster, says the Atlantic Council’s Adrian Karatnycky. The interim government taking office this week inherits a nearly bankrupt state, Karatnycky noted in an interview, and a country more bitterly divided than in decades between its ethnic Russian and Ukrainian populations. Ukraine and the region also face the danger of an ill-calculated Russian attempt to intervene in Ukraine’s crisis, notably in the strategic, pro-Russian Crimean Peninsula.
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Karatnycky discussed policy decisions facing the US and its allies in three key areas:
SAVING UKRAINE FROM A DEFAULT
Washington and its allies should prepare an emergency package of aid and credits to prevent Ukraine from defaulting on its debts or printing currency to pay its local bills. “The first thing we know is that there’s nothing in the state treasury,” Karatnycky said. Longer-term help will have to be conditioned on painful economic reforms and austerity, but one piece of good news is that at least some anti-Yanukovych leaders starting to take power – such as former Economy Minister Arseniy Yatsenyuk – have declared publicly that Ukrainians must prepare for those sacrifices. Ukraine’s population of 46 million people may be readier psychologically for those sacrifices after television channels have broadcast images of Yanukovych’s garishly opulent country estate outside Kyiv. “The public is probably going to understand that the guy has robbed them blind,” he said.
DISCOURAGING RUSSIAN INTERVENTION
Ukraine’s Russian-Ukrainian ethnic divide still could cause turmoil and violence. A hopeful sign is the call for calm and cooperation by Rinat Akhmetov, the country’s richest oligarch, who wields enormous influence in the eastern city of Donetsk, an ethnic Russian stronghold. The real danger is in Crimea, where Russia’s military wields significant influence. That’s a concern because Russia has used military force to create pro-Russian, secessionist enclaves within neighboring states. The Russian-backed zones of Transnistria in Moldova, and of Abkhazia and South Ossetia in Georgia, have become political levers for Moscow to demand compliance with its wishes on foreign-policy issues. On Ukraine, the US and EU should encourage other world powers to recognize the new government, thus making clear to Russia that it will be isolated if it tries to contest its legitimacy.
A POSSIBLE UKRAINE-RUSSIA BARGAIN
Russia’s desire to keep Ukraine within its sphere of influence has been part of this crisis from the start. Ukraine’s new leadership now vows to resume the country’s effort to build closer ties with the European Union – a policy that Yanukovych abandoned last year, igniting the three-month protest campaign that toppled him. As Ukraine does so, it might achieve more stable relations with Russia by formally declaring its intent to maintain a militarily neutral stance between Europe and Russia, meaning it would not join the NATO alliance. That step, and a pledge not to abrogate the treaty that lets Russia keep its Black Sea naval fleet at Ukraine’s port of Sevastopol, could reassure Russia enough to extract in return Moscow’s promise not to retaliate against Ukraine economically for establishing an association with the EU.