The Corner

The Deal in Kiev

As Alec notes, a deal has been struck in Ukraine, and the (very) early signs are that it might hold for now. In an interesting twist Ukraine’s parliament has also voted to release jailed opposition leader Yulia Timoshenko, a more ambiguous  figure than her current status as prisoner of the Yanukovych regime might suggest. Assuming that she is released and decides to remain in the country what will her return mean for the opposition coalition, and its prospects in the election to come?

Meanwhile, the fundamental economic problems dogging Ukraine are not going away. If the Russian bail-out now evaporates (who knows?), the country will be faced with a cash crunch very soon. This morning (before the deal was announced in Kiev) ITAR-TASS was reporting that the next tranche ($2bn) of the aid package had again been suspended.  What happens now?

Looking further out, the Ukrainian economy continues to be in dire shape. The original Russian proposal would have allowed it to limp along for a while, albeit at the cost of the country’s future prosperity and, for all practical purposes, independence. The alternative, a massive restructuring (funded by who exactly?), offers the hope (but no guarantee)  of a far brighter future, but the certainty of very tough times indeed in the short-term  (think back to something akin to the Russian experience in the 90s), tough times that would probably felt hardest in the country’s (largely) Russian-speaking rust belt.  That’s not a recipe for political calm, particularly if Moscow continues to stir the pot.

And Moscow will.

It may or not be significant that  Vladimir Lukin, the Russian witness to today’s proceedings in Kiev, didn’t sign the document (and commented that he did not “quite understand” what Russia’s role here was), but we can be sure that Putin’s Eurasian project has not gone away. There’s too much at stake for that.

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