For years, the Ukrainian government has pursued a disastrous economic policy, rendering a serious financial crisis possible or even likely. The outlook for Ukraine’s economy looks even worse now that Ukraine’s leaders have put the brakes on a planned agreement to deepen cooperation with the European Union. The last-minute decision by Ukraine’s president, Viktor Yanukovych, to cancel the signing of an Association Agreement with Brussels is being widely attributed — not least by Yanukovych and EU officials themselves — to pressure from Russia, which has been threatening Ukraine with draconian sanctions if the country does sign the EU agreement. This drama deserves wide attention.
Like most former Soviet states, Ukraine is subject to predatory rule. Its masters have two predominant objectives: to maintain power and enrich themselves. In February 2010, Viktor Yanukovych won free and reasonably fair presidential elections with a narrow margin over then-Prime Minister Yulia Tymoshenko. He represented the Russian-speaking electorate in eastern and southern Ukraine, while Tymoshenko found most of her support in the Ukrainian-speaking west and center of the country. This balance between West and East has kept Ukraine more open and pluralist than Russia.