Ukraine seeks common ground with new US leadership

Ukraine seeks common ground with new US leadership
"Hope springs eternal," Vice President Joe Biden said about whether Donald Trump would continue to give Ukraine the same priority.
By Sergei Kuznetsov in Kyiv January 22, 2017

"Hope springs eternal," outgoing US Vice President Joseph Biden shot back at a journalist on January 16 when asked if incoming president Donald Trump would give Ukraine the same priority as it enjoyed under Barack Obama's team.

With few firm indicators yet of how Ukraine will stack in the agenda of the new White House line-up, these three words could be the best illustration of the mood among the political elite in Kyiv. Ukrainian authorities are afraid that Trump's victory in November's presidential election could lead to the weakening of US political, diplomatic and financial support to the war-torn country as it remains embroiled in conflict with Russia.

A main source of concern is that the Trump administration will accelerate the lifting of sanctions against Russia that were imposed after it annexed the Crimea in 2014 and actively fuelled the separatist rebellion in Ukraine's eastern Donbas region. On the eve of his inauguration, Trump even raised the prospect of ending the sanctions against Moscow in return for a nuclear arms reduction deal.

"The world must know that we do not go abroad in search of enemies, that we are always happy when old enemies become friends, and when old friends become allies," a Trump administration official said on January 20.

Stick and carrot policy

After the victory of pro-Western protests in Kyiv almost three years ago, the Obama administration provided vital support to the troubled economy of Ukraine. The outgoing administration was also instrumental in securing Ukraine's $17.5bn extended funding facility with the International Monetary Fund (IMF).

"The IMF is a co-sponsor of a significant part of our reforms and our success," Ukrainian President Petro Poroshenko told IMF Managing Director Christine Lagarde on January 19. "I am proud that in such a difficult time of economic and financial stabilisation we have a remarkable cooperation with the entire IMF team and achieve promising results."

Bilateral financial assistance, which was tied to the IMF tranches, was also significant. In September 2016, Ukraine issued a set of five-year $1bn Eurobonds under US guarantee  in its third placement of US-guaranteed bonds since 2014.

Kyiv will continue to be heavily dependent on Western donor aid in the coming years, and the US’s stance towards the issue will remain crucial.

Meanwhile, Washington was not only front and centre in providing political and financial muscle to Kyiv, but also in the task of pressurising Ukraine’s elites into enacting painful but necessary reforms, from the creation of independent anti-corruption bodies to energy reform.

"Dozens of hours of our phone conversations and numerous personal meetings - it was a very difficult but very effective process of finding the right decisions that greatly accelerated the progress of reform on which life and death, sometimes the state’s fate and the fate of millions of its citizens, depended," Poroshenko underlined.

However, if the US now lost interest in Ukraine’s transformation, this could lead to the stalling of reforms and increased infighting among the country's main political forces and populist parties. Such a scenario could not only undermine Ukraine’s relative political stability, but also threaten the fragile economic recovery demonstrated in 2016.

Sanctions

Poroshenko said sanctions against Russia must stay in force until full restoration of Ukraine's territorial integrity "within its internationally recognised borders, including Crimea".

The statement followed President Obama's move to try to extend US sanctions on Russia over its annexation of Crimea and aggression in Ukraine until 2018, although in practice this is unlikely to succeed as US power is transferred. But political experts attribute the attempt to his administration's desire to make it harder for Trump to roll back the sanctions after Obama leaves office on January 20.

Meanwhile, Biden emphasised that the US together with its partners from the European Union and G7 member states believe sanctions against Russia must remain until Moscow fully implements its commitments within the Minsk peace agreements reached in 2015 to end the Donbas conflict.

The leadership in Kyiv hopes the Ukraine issue will "remain among the top priorities" of US political elites, Poroshenko told journalists after his meeting with Biden. "We respect the democratic choice of the American people and are willing to have a fruitful and efficient cooperation with the new US administration."

On Trump's radar

At the same time, commentators in Kyiv point out that Biden's visit to Kyiv on the eve of Trump’s inauguration may send the wrong signals to the new administration. 

"The new ... administration may interpret Biden's visit as an unfriendly gesture," the liberal Evropeiska Pravda online outlet wrote. "It could be easily construed as a continued demonstration of Kyiv's sympathy for the Democrats."

Whatever the case, Poroshenko intends to visit the US soon after Trump's inauguration, he said in an interview with Bloomberg during the World Economic Forum in Davos. According to the president, he was among the first global leaders whom Trump called upon his election.

"Trump has unique opportunities to use all his influence to support Ukraine in its struggle for freedom and democracy," Poroshenko's media office quoted him as saying.

 

 

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss