Thursday, May 7, 2015

Europe Gives $260 Billion For Anti-EU Greece But Balks At $65 Billion For Pro-Europe Ukraine

By Paul Roderick Gregory
Greece’s election of an anti-Europe government showed it wants out. Ukraine’s EuroMaidan revolution shows it was willing to risk its existence to become a part of Europe. Europe has showered recalcitrant Greece with hundreds of billions of bailout funds while begrudgingly giving Ukraine tens of billions just to keep it alive, even though Ukraine is fighting Europe’s war against Russian expansionism.

Ukrainian officials encountered empty seats at its failed April 28 donor conference in Kiev. Most potential contributors from Europe, Oceana and North America stayed away. At the request of EU officials, the conference was rebranded as the Ukraine Support Group and turned into monotonous sermons on the need to reform.


Despite urging for generous financial assistance by the likes of George Soros, the U.S. Senate (including even the obstreperous outgoing speaker) and leading academic experts, European donors worry that Ukraine will neither succeed in quashing corruption nor reforming its economy. The reluctant donors insist on “a precise plan” in order to prevent funds from disappearing into a “bottomless pit.” They worry that Ukraine might need $65 billion, a sum Reuters calls “one of the world’s biggest aid programs in recent times.”

The pressure from donors on Ukraine to reform is healthy. Ukraine ranked below Russia on Transparency International’s 2014 corruption index and occupies the ignoble position of 142 out of 175. It should score much better now that true reforms are underway. If donors pressure Ukraine into lasting pro-European reforms, Ukraine can join the Western community with its head held high, and no one in Brussels needs hold their nose. Both Europe and Ukraine will be winners.

If, however, Western donors wait to see a “clean” Ukraine before committing funds, there will soon be no Ukraine to help, with grave consequences for the West. Vladimir Putin will have  won and Ukraine will disappear into his web. There will be no Ukrainian military to restrain Putin’s aggression, likely next aimed at the Baltic States and possibly Belarus. Putin will be free to intimidate NATO with his nuclear saber-rattling and achieve his long-term goals of the dissolution of NATO and the destruction of the Atlantic alliance, as Europe and Obama timidly look on. It seems that spending some serious cash to prevent such things makes sense.

The European Union’s two highest officials, Donald Tusk and Jean-Claude Juncker, visited Kiev on April 27 for the first summit with Ukrainian officials since the signing of Ukraine’s EU Association Agreement last June. They were not there to discuss military assistance but to inform Ukraine’s President Petro Poroshenko to delay the planned-for-the-next-day’s donors’ conference until the end of the year.
For its part, Ukraine had its reform plans ready for presentation at the jettisoned April 28 donor conference. Let us hope that they paid close attention to Ukraine’s considerable achievements. Ukraine can boast of a democratically elected president and parliament, and a young reform-minded government, in which Western experts hold key ministerial positions. Ukraine has launched an attack on the “oligarchization” of Ukraine and is regaining control of the national gas company (Naftogaz), all the while fighting a military, propaganda and economic war against Russia with a collapsing economy and deteriorating public finances. Ukraine has an activist reform-minded press and a powerful group of scholars and policy-makers pressing for reform from outside, such as VoxUkraine.

Just as the Obama administration refuses to supply Ukraine with lethal defensive weapons, some Europeans oppose financial aid on the grounds that Ukraine is not worth it, and the money will be wasted on a futile venture. They argue that Russia wants Ukraine more than Europe and that Ukraine has little significance in the grand scheme of things.

 





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