Ukraine in Crisis

Author: Robert McMahon, Editor
Updated: August 25, 2014

Konstantin Chernichkin/Courtesy Reuters
Introduction

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 escalating tensions 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 regions.

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 conflict erupted between pro-Russian separatists and the new government in Kiev. Russia's moves, including reported military support for separatist forces, mark a serious challenge to established principles of world order such as sovereignty and nonintervention.

Why is Ukraine in crisis?

The country of forty-five million people has struggled with its identity since 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. 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, 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 won by Yanukovich, 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 imprisoned his reformist opponent in the 2010 presidential race, Yulia Tymoshenko, 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 in November, citing concerns about European competition. The decision provoked demonstrations in Kiev on what became known as the Euromaidan by protesters 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, and fighting between pro-Russian separatists and government forces broke out in April 2014. Separatists in the regions of Luhansk and Donetsk established self-declared "people's republics."

Elections on May 25 brought pro-Western businessman Petro Poroshenko into power, and he moved to try to reassert central government control over restive eastern cities. By August, the fighting had killed more than 2,000 people and caused hundreds of thousands to flee their homes, according to UN officials. Officials in Kiev and NATO states accused Russia of arming the separatists and said rebels in eastern Ukraine using Russia-supplied ground-to-air missiles were responsible for the downing of a civilian airliner in July 2014, in which 298 people were killed. Russia denied the charges but has continuously deployed thousands of troops near the Ukrainian border.

Ukrainian soldiersUkrainian soldiers take part in a rehearsal for the Independence Day military parade, in the center of Kiev August 20. (Gleb Garanich/Courtesy Reuters)

What are Russia's concerns?

Russia has strong fraternal ties with Ukraine dating back to the ninth century and the founding of Kievan Rus, 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 a major economic partner that Russia would like to incorporate into its proposed Eurasian Union, a customs bloc due to be formed in January 2015 whose likely members include Kazakhstan, Belarus, and Armenia.

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 was 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 that opens the door to others Western institutions. The EU's Eastern Partnership Program is aimed at forging tighter bonds with six former Eastern bloc countries, but 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.

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 ill-fated association agreement negotiated by EU officials and the Yanukovich government involved a comprehensive free-trade deal. 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.

After Poroshenko's election, he pressed forward plans to sign the association agreement and Ukraine did so along with Moldova and Georgia on June 27, 2014. Poroshenko said after signing the agreement: "Ukraine is underlining its sovereign choice in favor of membership of the EU."

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. 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.

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. 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.

Overall, Russians make up an estimated 59 percent of the population of Crimea, Ukrainians make up about 23 percent, and Muslim Tatars about 12 percent.

Do Russian moves in Ukraine violate international law?

U.S. officials say Russia's actions in Crimea and eastern Ukraine 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. Signed by the U.S., UK, and Russia, that document provided security guarantees to Ukraine in exchange for relinquishing its nuclear arsenal.

For its part, Russia has rejected charges that it is violating international law.

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

In response to the developments in Crimea and eastern Ukraine, EU and U.S. policymakers have taken a series of steps that include:

  • Economic aid: The IMF in the spring approved a loan package for Ukraine for $17 billion over two years. The EU has delivered hundreds of millions of dollars of an announced $15 billion support package for Ukraine, with payments conditioned on Ukraine enacting tough reforms like ending gas subsidies. Washington has promised more than $1 billion in U.S. loan guarantees and technical assistance. In late August 2014, German chancellor Angela Merkel pledged nearly $700 million in aid to help Ukraine rebuild war-damaged areas in the east and aid refugees.
  • Sanctions: The United States, the EU, Japan, and Canada have imposed sanctions on scores of 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. The United States and European Union announced more severe measures in late July that blocked some Russian banks from U.S. and European capital markets, and generally target Russian finance, energy, and defense industries. Russia was hit by a slowdown in growth and investment in the first quarter of 2014, and the scope of the new sanctions suggest a substantial, longer-term cost to the Russian economy, says CFR's Robert Kahn. Russia retaliated by banning imports of food stuffs from the United States and many European states in July 2014.
  • 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 necessary infrastructure.
  • Military aid: The United States has bolstered NATO's air presence over the Baltic states and deployed about six hundred soldiers in Latvia, Lithuania, and Estonia, as well as Poland to train with local forces as part of Operation Atlantic Resolve. 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 For Peace Program. The 2014 NATO summit in Wales is expected to be dominated by the alliance's response to the crisis in Ukraine.

Additional Resources

An expert panel at CFR examines how the crisis in Ukraine could threaten the post-Cold War order in Europe.

Unless the corrupt systems that gave rise to Ukraine's crisis are destroyed they will further weaken "what already looks worryingly like a failed state," writes Oliver Bullough in a report for the Legatum Institute.

Mathew Kupfer and Thomas de Waal examine the use and misuse of the term "genocide" by Russians and Ukrainians in their present conflict and its historial resonance, in a paper for the Carnegie Endowment.

This Frontline documentary examines the resurgence of hatreds spurring both sides in the conflict.

More on this topic from CFR

View more from Political Movements and Protests, Ukraine