You're reading: German expert Susan Stewart: ‘There are concrete investors who feel that their property has been basically stolen’

Editor’s Note: Olena Tregub, a freelance contributor to the Kyiv Post, conducted a series of interviews with German experts on Ukraine. The following is one of them.

Susan Stewart is a researcher with the Russian Federation/CIS division of the German Institute for International and Security Affairs at Berlin focusing on European Union-Russia relations, Ukrainian foreign and domestic policy, the European Neighborhood Policy, civil society in Eastern Europe and the role of external actors in transition processes.

Kyiv Post: How would you assess the results of President Viktor Yanukovych’s first year of presidency in comparison to those of the previous Orange Revolution leadership of ex-President Viktor Yushchenko and ex-Prime Minister Yulia Tymoshenko?

Susan Stewart: First, Yanukovych presents himself as consolidating political forces in order to push through reforms. The situation is less chaotic, it is more unified. There has been a definite regression in democratic development. It is clear that there are major problems with the independence of the judiciary. This problem has been there before, but has been exacerbated under Yanukovych. The government has been degraded to a “Yes-Man” expected to push through policies that Yanukovych wants, as has parliament. There have been problems with laws that have antidemocratic elements, like the law on elections. What is continuing is the primacy of special, private interests over the national interest. When reforms are initiated via new laws there might be some truly reformist elements, but they are watered down or partially overwritten because there are special interests at work. The so-called reforms are benefitting the special interest groups, the oligarchs, their supporters, those people close to Yanukovych…. It does not look like the reforms going to be effective. In the long run, the current leaders are running the country into the ground with the current approach.

KP: Should the EU use the association agreement, Deep and Comprehensive Free Trade Agreement and visa-free regime negotiations as a leverage and conditionality factor to promote political and other reforms in Ukraine, or should these agreements be signed as soon as possible?

SS: I think that if Ukraine actually delivered on reforms than the EU might be willing to overlook certain deficits in democratic development, in particular if the EU finds these reforms absolutely crucial, like in the field of energy. It is not yet clear what the conclusions from the Arab Spring are. One possible conclusion is that we should prioritize democratic development because that is something which will bring results for the EU with regard to the stability of the neighborhood in the longer term. But even if this conclusion is drawn, it is unclear which practical implications it will have.

Germany may very well be against approving the visa-free regime, but it will be mainly due to concerns about migration and fears that there will be an influx of Ukrainians into the EU and into Germany. I do not think that a decision to approve the visa-free regime will be blocked as a result of a belief that granting it will decrease EU leverage over Ukraine. And I do not think that the visa-free regime is a good tool for exercising that kind of leverage. Because visa liberalization is important in terms of opening up and allowing more people of “all sorts” to come to the EU and experience life there.

Concerning DCFTA and association agreement, this approach has been too ambitious for Ukraine and the Eastern neighborhood countries. The EU should not be trying to be so comprehensive. There are so many areas and priorities… The EU tries to do a little everywhere, and ends up not achieving much anywhere. The resources are spread too widely, and are not put into the monitoring of the actual implementation. And that is where there has been a major problem in Ukraine. The EU should prioritize much more strongly, including such fields as energy, democratic development, especially the independence of the judiciary, and the investment climate.

KP: Could and should the current pro-Russian German position be replaced by a pro-Ukrainian position? To which degree may domestic political changes in Germany play a role for its future Eastern policy positions?

SS: There is a very strong interest in Russia here. The core of the Russian-German relationship is economic, and there are strong economic interests that have influence on the policy and that are not likely to going away soon. There are also the historical ties with Russia. In the Social-Democratic Party, there are quite a number of people who have a kind of ideological bent towards supporting Russia which you also saw when Frank-Walter Steinmeier was minister of foreign affairs. This expresses a sense that there is a linkage with Russia, historically and because Mikhail Gorbachev made possible the re-unification of Germany and allowed it to be a NATO member, as a whole. Also, there are people in the energy sector who had long careers in this sphere and have had positive experiences with Russia or with Soviet energy deliveries. There is also a certain amount of disillusionment with Russia concerning issues in human rights and democracy. But there is still a sense that there is no way to do without or get around Russia.

KP: Do you have any specific advice for the Ukrainian government to change Ukraine’s image in Germany for the better, and improve Ukraine’s attractiveness for German investors?

SS: The image is not good, at the moment. Especially the grain quotas have really hurt the image. There are concrete investors who feel that their property has been basically stolen. At the beginning, there was a wait-and-see approach to Yanukovych, and the hope that he would make Ukraine a more attractive place for investment. But now, there is a lot of skepticism on whether the reforms will be implemented in such a way that the investment climate will become more attractive. Also the independence of the judiciary is important for investors so that they have a feeling that they can get a fair hearing in the courts should there be disputes.

KP: Did the decision of Yanukovych to prosecute the former President Leonid Kuchma for the 2000 murder of journalist Georgiy Gongadze add credibility to the current government and improve its image in the West? What are your expectations about how this case should be resolved?

First, Kuchma is prosecuted not for murder, but for abuse of office. Second, I have not talked to anybody who felt that this is evidence of non-selective justice in Ukraine.

KP: Do you think Ukraine will ever enter the EU, and, if so, under which conditions and when approximately?

SS: Ukraine’s full integration into the EU is not much of an issue here, because, if it were ever to happen, it would be in the distant future. First of all come the Western Balkans. Then, there is the whole issue of Turkey which needs to be resolved one way or the other. Theoretically one could proceed, after the integration of the Western Balkans, towards looking to the East, i.e. at Moldova and Ukraine, without addressing the Turkey issue. If the EU decides to admit Turkey, that would certainly postpone Ukraine’s and anybody else’s admission. If there is no political will in the EU to admit Turkey and the process is closed, then if Ukraine entered, it would obviously be before Turkey. But I do not see any time in the foreseeable future Ukraine’s accession into the EU as anything remotely feasible – both because of the situation in Ukraine and because of all the EU issues.

KP: Do you think Tymoshenko’s arrest will affect the signing of Association agreement between Ukraine and the EU?

SS: This arrest has added fuel to the ongoing debate about whether or not the EU should enter into an association agreement with a country which is obviously flaunting its commitments to human rights, democracy and the rule of law. Even if the agreement is initialed as planned in December 2011, achieving a signing, and especially ratification by all 27 EU member states, will be difficult and will depend on political developments in Ukraine and the actions of the current Ukrainian leadership.

Olena Tregub is a freelance journalist who regularly contributes to the Kyiv Post.