Russia Reset Diverting Attention from Ukraine

Arguing along similar lines as Katinka Barysch’s piece yesterday, analysts quoted in Judy Dempsey’s New York Times article today call for a single strong policy toward Ukraine, which seems to be moving back into Russia’s sphere of influence:

“The great shame is that there is no actual German or European Union policy towards Ukraine,” said Jonas Grätz, security analyst at the Norwegian Institute for Defense Studies, Oslo. “Everything seems to be focused on the reset button with Russia,” a reference to the United States, and now the E.U., improving relations with Russia. But by making Russia its priority among the countries east of its borders, the E.U. risks losing a still democratic and stable Ukraine, say analysts…

…Despite using Mr. Yanukovich’s election as an opportunity to entrench itself in Ukraine, Russia has made limited inroads into Ukraine’s economy. Mr. Grätz argues that Ukraine’s oligarchs, who dominate most sectors of the economy, are prepared to challenge this aspect of Russia’s influence. They would lose out financially if Russian businesses took over the country’s energy resources and gas transit pipelines, which the Kremlin has long coveted.

This is where the E.U. could exercise some leverage. It is willing to offer Ukraine a free trade agreement provided the government embarks on major structural reforms. Such an accord would benefit some of the oligarchs; it would give them access to more markets and make their businesses more competitive.