Ukraine in Crisis

Author: Robert McMahon, Editor
Updated: May 5, 2014

Konstantin Chernichkin/Courtesy Reuters

Ukraine's most prolonged and deadly crisis since its post-Soviet independence began as a protest against the government dropping plans to forge closer trade ties with the European Union, and has since spurred a global standoff between Russia and Western powers. The crisis stems from more than twenty years of weak governance, a lopsided economy dominated by oligarchs, heavy reliance on Russia, and sharp differences between Ukraine's linguistically, religiously, and ethnically distinct eastern and western halves. After the ouster of President Viktor Yanukovich in February 2014, Russia annexed the Crimean peninsula and the port city of Sevastopol, and deployed tens of thousands of forces near the border of eastern Ukraine, where tensions have escalated between pro-Russian separatists and the new government in Kiev. Russia's moves mark a serious challenge to established principles of world order such as sovereignty and nonintervention, and raises concerns by asserting the primacy of nationality over citizenship.

Why is Ukraine in crisis?

The country of forty-five million people has struggled with its identity since it gained independence with the dissolution of the Soviet Union in 1991. Ukraine has failed to resolve its internal divisions and build strong political institutions, hampering its ability to implement economic reforms, overcome corruption, and lessen the sway of powerful oligarchs. In the decade following independence, successive presidents allowed oligarchs to gain increasing control over the economy while repression against political opponents intensified. By 2010, Ukraine's fifty richest people controlled nearly half of the country's gross domestic product (GDP), writes Andrew Wilson in the CFR book Pathways to Freedom.

Successive presidents allowed oligarchs to gain increasing control over the economy while repression against political opponents intensified.

A reformist tide briefly crested in 2004 when the Orange Revolution, set off by a rigged presidential election, brought Viktor Yushchenko to the presidency. Yet infighting among elites hampered reforms, and severe economic troubles resurged with the global economic crisis of 2008. The revolution also masked the divide between European-oriented western and central Ukraine and Russian-oriented southern and eastern Ukraine.

Campaigning on a platform of closer ties with Russia, Yanukovich won the 2010 presidential election. By many accounts, he then reverted to the pattern of corruption and cronyism. His family may have embezzled as much as $8 billion to $10 billion a year over three years, according to Anders Aslund of the Peterson Institute for International Economics. He also turned against his opponent in the 2010 presidential race, Yulia Tymoshenko, one of the high-profile reformist leaders of the Orange Revolution, imprisoning her on charges of abuse of power.

Yanukovich continued talks with the EU on a trade association agreement, which he signaled he would sign in late 2013. (Tymoshenko's release was one of the conditions set by the EU for the trade association agreement.) But under pressure from Russia, he dropped those plans, citing concerns about damage to Ukrainian industry by European competition. The decision provoked demonstrations in Kiev on what became known as the Euromaidan by protestors seeking to align their future with Europe's and speaking out against corruption.

The Yanukovich government's crackdown after three months of protests, in some cases spurring reprisals by radicalized demonstrators, caused the bloodiest conflict in the country's post-Soviet period, with scores killed. Yanukovich's subsequent ouster sowed new divisions between the eastern and western halves of the country, though a new group of transitional leaders promised to form a national unity government and hold elections on May 25, 2014.

But the situation worsened in eastern and southern Ukraine in the month prior to elections. Pro-Russian separatists clashed increasingly with government forces and citizens loyal to the central government. Meanwhile, separatists had seized government buildings in at least ten towns in eastern Ukraine by early May 2014, and violence spread to Odessa. The Black Sea city experienced the most bloodshed since the latest round of communal clashes began when more than thirty people, most of them pro-Russian separatists, were killed in a May 2 fire.

Russian officials have repeatedly cited concerns about threats to Russian speakers in eastern Ukraine, and there are fears Russia could decide to assert control in the event of a contest for power there. Moscow has moved about forty thousand troops in the region bordering eastern Ukraine, while Ukraine has deployed about eleven thousand troops in the area on its side of the border.

A Ukrainian soldier stands guard near an armoured personnel carrier at a checkpoint near the town of Sloviansk in eastern Ukraine May 2, 2014. (Photo: Baz Ratner/Courtesy Reuters)

What are Russia's concerns?

Russia has strong fraternal ties with Ukraine dating back to the ninth century and the founding of KievanRus, the first eastern Slavic state, whose capital was Kiev. Ukraine was part of Russia for centuries, and the two continued to be closely aligned through the Soviet period, when Ukraine and Russia were separate republics. "The West must understand that, to Russia, Ukraine can never be just a foreign country," wrote former U.S. secretary of state Henry Kissinger in a Washington Post op ed.

Ukraine is also an economic partner that Russia would like to incorporate into its proposed Eurasian Union, a customs union due to be formed in January 2015 whose likely members include Kazakhstan, Belarus, and Armenia. Ukraine's membership would increase the union's population "by a solid 27 percent," writes Simon Saradzhyan, a research fellow at Harvard Kennedy School's Belfer Center.

Ukraine plays an important role in Russia's energy trade; its pipelines provide transit to 80 percent of the natural gas Russia sends to European markets, and Ukraine itself is a major market for Russian gas. Militarily, Ukraine is also important to Russia as a buffer state, and it is home to Russia's Black Sea fleet, based in the Crimean port city of Sevastopol under a bilateral agreement between the two states.

Russian president Vladimir Putin has portrayed his country's role in Ukraine as safeguarding ethnic Russians worried by lawlessness spreading east from the capital.

Russia considers EU efforts to expand eastward to Ukraine, even through a relatively limited association agreement, as an alarming step because it opens the doors toward strengthening an array of Western institutional ties at the expense of Russian ones. The EU's Eastern Partnership Program, established in 2009, is aimed at forging tighter bonds with six former Eastern bloc countries. Russia sees it as a stepping stone to organizations such as NATO, whose eastward expansion is regarded by Russia's security establishment as a threat. Ukraine belongs to NATO's Partnership for Peace program, but is seen as having little prospect of joining the alliance in the foreseeable future. Similar concerns about Georgia contributed to Moscow's deployment of forces at the Georgian border in 2008, which led to a brief war and Russian occupation of the breakaway regions South Ossetia and Abkhazia.

Russian president Vladimir Putin has portrayed his country's role in Ukraine as safeguarding ethnic Russians worried by lawlessness spreading east from the capital, charges that leaders in Kiev dismiss as provocations. In the case of Crimea, Putin has stressed Moscow is not imposing its will, but rather, supporting the free choice of the local population, drawing parallels with the support Western states gave to Kosovo's 2008 declaration of independence from Serbia. Shortly before moving to annex Crimea on March 18, Putin told the Russian parliament that Russia would protect the rights of Russians abroad.

What is the role of the European Union?

The EU's Eastern Partnership Program was established in 2009 to expand political and economic ties between the EU and Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine, while stopping short of offering membership to partner countries. The association agreement negotiated by EU officials and the Yanukovich government involved a comprehensive free-trade deal. Just ahead of the scheduled signing in November 2013, Yanukovich backed out under pressure from Moscow, citing costs that were too heavy for the Ukrainian economy to bear.

A number of analysts fault EU officials for neglecting the broader geopolitical implications of the deal for Russia, and declining to map out strategic aims for Europe. "The European Union must recognize that its bureaucratic dilatoriness and subordination of the strategic element to domestic politics in negotiating Ukraine's relationship to Europe contributed to turning a negotiation into a crisis," wrote Kissinger in his Washington Post op-ed.

What is the status of Crimea?

Prior to the crisis, Crimea was an autonomous republic of Ukraine of two million people with its own parliament and laws that permitted the use of the Russian language in everyday life and empowered local representatives to levy taxes. After the ouster of Yanukovich in February 2014, Crimea's parliament called for a referendum, in which the peninsula's 1.5 million voters opted overwhelmingly for union with Russia. Following that vote, Russian legislators passed a resolution nullifying Ukrainian laws in Crimea and putting in force Russian legislation. Parliament set a deadline of January 1, 2015 for the integration of Crimea's economic, financial, credit, and legal systems into the Russian Federation, reported Itar-Tass. It said matters related to military service in Crimea and Sevastopol will be settled by then as well.

Occupied for centuries by Muslim Tatars affiliated with the Ottoman Empire, Crimea was conquered in 1783 by Russia's Catherine the Great. Soviet leader Joseph Stalin deported the Tatar population of about two hundred thousand to Central Asia during World War II, and the bulk of them did not return until 1989. Today Tatars constitute about 12 percent of Crimea's population.

The peninsula only became part of Ukraine in 1954, when Soviet leader Nikita Krushchev transferred it from the Russian Soviet Socialist Republic to the Ukrainian Soviet Socialist Republic in what was seen as a largely symbolic administrative move within the Soviet Union. The majority-Russian residents of Crimea continued to have strong ties with Russia. Following the dissolution of the Soviet Union in 1991, the two new countries reached an agreement to permit the Russian Black Sea fleet to remain based at the Crimean port of Sevastopol.

Yanukovich and then Russian president Dmitry Medvedev signed an agreement in 2010 that extended the lease on the port until 2042 in exchange for a 30 percent drop in the price of natural gas sold to Ukraine. Russia has eleven thousand forces stationed in Crimea, which were reportedly joined by five thousand Russian troops since the ouster of Yanukovich, although Russians officials have denied this. Thousands of Ukrainian forces occupy bases on the peninsula currently blocked by what they say are Russian forces.

Overall, Russians make up an estimated 59 percent of the population of Crimea; Ukrainians make up about 23 percent.

Do Russian moves in Ukraine violate international law?

U.S. officials say Russia's actions are in breach of international law, including the nonintervention provisions in the UN Charter; the 1997 Treaty on Friendship and Cooperation between Russia and Ukraine, which requires Russia to respect Ukraine's territorial integrity; and the 1994 Budapest Memorandum on Security Assurances. That document states: "The Russian Federation, the United Kingdom of Great Britain and Northern Ireland, and the United States of America reaffirm their commitment to Ukraine, in accordance with the principles of the Final Act of the Conference on Security and Cooperation in Europe, to respect the independence and sovereignty and the existing borders of Ukraine."

For its part, Russia has rejected charges that it is violating international law, and has called for Ukraine to return to the terms of the February 21, 2014 agreement between opposition leaders and Yanukovich that permitted him to stay in office as the head of a national unity government while elections were planned.

What are U.S. and European policy options in Ukraine?

U.S. officials have repeatedly expressed their desire to see Ukraine become a stable democracy with firm economic and political connections to the European Union. In response to the developments in Crimea, EU and U.S. policymakers have begun a series of steps that include:

  • Economic aid: The EU has announced $15 billion over the next several years, conditioned on Ukraine reaching an agreement with the International Monetary Fund and enacting tough reforms like ending gas subsidies. Washington has promised $1 billion in U.S. loan guarantees and technical assistance. The IMF in the spring approved a loan package for Ukraine for $17 billion over two years.
  • Sanctions: The United States, the EU, Japan, and Canada have imposed sanctions on more than seventy Russian and Ukrainian officials and businesses said to be linked to the seizure of Crimea and the escalation in tensions. The measures include travel bans and the freezing of assets. A new round of U.S. sanctions announced April 28 targeted seven individuals, including Rosneft Chairman Igor Schechin, a close aide to Putin, and froze the assets of seventeen companies linked to Putin. EU sanctions announced on April 29 named fifteen more individuals hit with asset freezes and travel bans, including Gen. Valery Gerasimov, chief of Russia's armed forces. But the EU did not act against any companies or business leaders. Uncertainty about a further extension of sanctions has contributed to a slowing in growth and investment in Russia in the first quarter of this year, says CFR's Robert Kahn.
  • Energy aid: Some experts and U.S. lawmakers have called for accelerating the approval of U.S. natural gas proposals, which would take advantage of booming U.S. production to help lessen the reliance of European partners and Ukraine on Russian natural gas. U.S. law currently excludes the sale of natural gas to countries that are not free-trade partners, but the Energy Department can approve sales that are deemed in the public interest. But some analysts caution that even with the lifting of export restrictions, it could take years and cost billions of dollars to set up the infrastructure to liquefy and ship meaningful supplies of gas to European allies. The first U.S. liquefied natural gas terminal is expected to come online in mid-2015.
  • Military aid: The United States has taken a number of initial steps to reassure U.S. allies in the region, including sending F-16 fighters to Poland to begin joint military exercises. The United States has also contributed to bolstering NATO's air presence over the Baltic states and announced that about six hundred soldiers from the U.S. Army's 173rd Airborne Brigade would be deploying in the Baltic states of Latvia, Lithuania, and Estonia, as well as Poland to train with local forces. NATO secretary-general Anders Fogh Rasmussen called the crisis the greatest threat to European security since the end of the Cold War, and reasserted alliance ties with Ukraine through the Partnership Through Peace Program. He said stepped-up partnership cooperation would include building up the capacity of the Ukrainian military through more joint training and exercises.

Additional Resources

Steven Pifer and Hannah Thoburn of the Brookings Institution examine nuanced public opinion in areas of eastern Ukraine where separatist tensions have escalated.

Jim Nichol of the Congressional Research Service offers a detailed survey of economic, political, and security issues in Russia and their possible relevance to the Ukraine crisis.

Former U.S. secretary of state Henry Kissinger puts Ukraine's importance in historical context and describes the path of diplomacy all sides should pursue in Ukraine.

The New York Times illustrates Ukraine's crisis with eleven maps.

The Organization for Security and Cooperation in Europe lacks a binding enforcement mechanism, and Russia does not subscribe to its core mission, which is why the OSCE it is not a major player in the Ukraine crisis, writes Carnegie's Jan Techau.

Radio Free Europe/Radio Liberty explains the Budapest Memorandum's relevance to Crimea.

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