Ukraine’s Stalemate

Five years have passed since Russia’s lightning intervention to seize and then annex Crimea. Although the initial operation by the famed “little green men” was swift and bloodless, the ensuing war in Donbas has been bloody and protracted. It has already lasted longer than World War I, and there are few signs of an end in sight. Meanwhile, the outlook for a sustainable economic recovery in Ukraine is equally bleak.

There has been no shortage of political statements about how painful reforms are starting to bear fruit, about successes in combating corruption, about new and inventive plans to bring peace to Donbas, and about how economic sanctions against Russia are finally beginning to bite. But the half-life of such media soundbites has been short, leaving an ever-deepening sense of “Ukraine fatigue.”

The plain fact is that the conflict in and around Ukraine is stalemated. Given the damage it has already produced, this is deeply disturbing. While stalemate is preferable to escalation, it is also easily normalized. And as wars of attrition persist, their long-term costs mount.

Treating symptoms

One reason why the peace process in Ukraine has become gridlocked is that outside efforts to find solutions have narrowly focused on alleviating symptoms rather than curing the fundamental disease.

Treatment of Ukraine’s symptoms has been rather successful. A lifeline from the International Monetary Fund staved off a sovereign default. Funding from various European Union programs has helped sustain civil society organizations. Military assistance has provided weaponry and training for an improved defense force. Monitoring by the Organization for Security and Co-operation in Europe (OSCE) has stabilized the front lines in the east and reduced the daily casualty list.

Behind the facade, however, the EU member states have still not arrived at anything resembling a strategy for Ukraine, nor agreed on how to deal with the Kremlin. The diplomatic efforts invested in the “Normandy Format,” and in the associated “Minsk Process,” have in consequence failed to bring any return.

Of the Minsk II agreement’s 13 points, six remain “not implemented” and six “partially implemented.” Only the introduction of trilateral working groups has been carried out – with limited results.

Normative diplomacy

This record of futility can be ascribed to a new style of international diplomacy, which has jettisoned the old-style realpolitik in favor of an increasing reliance on moralizing statements that are purely normative and unenforceable.

When the EU set out to counter Russian claims to hegemony in its “near abroad,” by formulating a European Neighborhood Policy, it set the stage for a conflict it was not ready to face.

Russia felt it had vital strategic interests in Ukraine. These ranged from naval and air bases in Crimea to extensive trade and industrial cooperation, along with political concerns about the spillover effects of another “color revolution” in Ukraine. By challenging those interests, the EU placed itself at a crossroads, where tough choices had to be made.

One choice would have been to acknowledge and deal with the conflict of interest. Old hands of realpolitik like Henry Kissinger and Zbigniew Brzezinski advocated versions of “Finlandization” for Ukraine, which would have included ruling out its future membership in NATO.

Those in charge of the EU’s diplomatic agenda rejected such proposals. They claimed every country has a right to choose its own alliances and that Russia had no right to interfere. This is the context in which the stalemate in Ukraine should be understood – as a conflict of interests that was mistakenly redefined as a conflict of values.

Ignoring fatigue

The Western approach had two guiding principles. The first was to view the Russian aggression as a moral issue, implying there could be no compromise. The Kremlin would have to back off with nothing to show. The second was to proclaim there could be no military solution, implying that Russia need not fear outside support for Ukraine’s armed forces. It was the combination of these two principles that set the stage for the failure of Normandy and Minsk.

Those who issue brave moral declarations risk becoming prisoners of their own rhetoric. Without hard power to enforce their moral strictures, such politicians are quickly forced into empty rationalizations of their lack of progress. Every bit of good news is hailed as a sign that corners have been turned and that breakthroughs are approaching. The inevitable result is a growing sense of disillusionment.

“Ukraine fatigue” first appeared after Viktor Yanukovych won the 2010 presidential election, crushing the hopes attached to President Viktor Yushchenko and the “Orange Revolution.” Optimism was rekindled with the “Euromaidan” revolt that toppled Mr. Yushchenko in 2014, but as it slowly became obvious that his successor, Petro Poroshenko, would not end the dominance of corrupt, oligarchical elites in the country’s domestic politics, fatigue again set in.

EU officials routinely claim that their support is unflinching. During a visit to Kiev in March 2018, Federica Mogherini claimed that the extension of sanctions on Russia and financial aid for Kiev proved that the EU felt “no fatigue” toward Ukraine: “The European Union is Ukraine’s partner and strongest supporter in striving to build a stable, prosperous democracy and economy.”

These words were spoken shortly after the EU had begun shutting down a border checkpoint scheme with Ukraine, deepening already severe doubts about Kiev’s ability to deliver reforms in return for billions in European aid.

Undesirable truth

The core of the EU’s dilemma is moral hazard. Having made success in Ukraine a key foreign policy objective, it cannot allow or admit failure. Part of the price for maintaining this pretense of success is giving both Russia and Ukraine leeway to play their own games of deception.

Keeping the Kremlin committed to the Minsk process has required playing along with its brazen denials of being involved in the war in Donbas. Despite advanced satellite intelligence, even ludicrous Kremlin claims of not being responsible for the downing of Malaysian Airways Flight MH-17 have been met with only veiled criticism.

Keeping the Ukrainian side committed to even half-hearted reforms has required turning a blind eye to corruption, to the alleged disappearance of IMF funds and to the discovery, in the Panama Papers, that even President Poroshenko himself had offshore accounts. Given the well-documented involvement of important Western banks in various money laundering schemes, one can only conclude that the truth is readily available but not desirable to Western policymakers.

Breakthrough chances

Looking ahead, the main question is what it would take to break the gridlock. At a minimum, any comprehensive resolution in Ukraine would involve completing the economic reform agenda (thus terminating the need for corruption-inducing IMF support), returning Donbas and the eastern border to the control of the legitimate authorities in Kiev, and restoring working relations between Russia and the West.

According to the optimists, this goal is still reachable as the faltering, gradual reforms finally achieve critical mass. It is tempting to believe this argument. After all, Ukraine’s economy has stabilized. Some essential reforms to combat corruption have been implemented. The country has a vibrant civil society and a parliament that exercises genuine control over the government.

It goes without saying that if Ukraine really could be transformed into a successful market economy, it would be a major blow to the Kremlin. The main objective of Russia’s strategy is to destabilize the government and deter foreign investment, thus proving that Ukraine is not viable on its own.

What makes this optimistic scenario unlikely is that the vital element in Ukraine’s state machinery – the judiciary – remains unreformed. Even when corruption cases are prosecuted, there have been few convictions, while the new programs to reclaim stolen assets have recovered little. The Ukrainian people will have little faith in their political system as long as corrupt elites manage to hang on to their ill-gotten gains. In 2018, a Gallup poll found that only 9 percent of Ukrainians trusted their government – the lowest level in the world for the second year in a row.

Military option

Under the opposite, worst-case scenario, Russia would decide to up the ante by escalating the military conflict. The November 2018 confrontation near the Kerch Strait, when Russian forces fired upon and then seized three Ukrainian Navy vessels, was taken by many as confirmation that this option was in the cards. Military analysts have suggested the most likely course would be a push to capture Mariupol and create a land bridge to Crimea. But like the first, optimistic scenario, this pessimistic forecast is rather unlikely.

One reason is that Ukraine is much stronger militarily than in 2014. The delivery of Javelin anti-tank missiles from the United States has helped deter the use of Russian armor. U.S. and Canadian anti-artillery systems and sniper kits have also helped shore up the Ukrainian infantry manning the front lines. Yet the main transformation has been a fundamental rebuilding of Ukraine’s Army and National Guard, along with a surge in domestic weapons production. Western training of Ukrainian troops and officers has also been helpful.

None of this would suffice to stop a determined push by superior forces, but it clearly raises the bar. A serious offensive would require Russia to commit the bulk of its heavy forces and air assets in the Western, Southern and Central Military Districts, stripping away the last shreds of plausible deniabilityand perhaps even goading NATO into getting involved. Given these costs, stalemate would seem to be a preferable alternative.

Escalating costs

As stalemate becomes normalized, however, the costs add up. For Ukraine, five years of low-intensity conflict has caused vast material destruction – including a halving of the country’s nominal gross domestic product between 2013 and 2016. Human casualties have also been severe. According to the latest numbers from the United Nations, the death toll has reached 13,000 people, with a further 30,000 injured and perhaps as many as 2 million displaced.

Internationally, the Ukraine crisis destroyed all trust between Russia and the U.S., demolished the post-Cold War security architecture in Europe, and broke off four decades of progress in arms control. All these developments have contributed to the growing risk of a military confrontation between Russia and NATO.

The consequences for Russia, too, have been substantial. Western sanctions have had a serious financial impact, magnified by the cost of lost business and investment. To that must be added the direct expense of supporting the war in Donbas and pouring resources into Crimea, both to subsidize the flagging economy (suffering from its amputation from Ukraine) and to build missing infrastructure – especially electric power plants and two 18-kilometer road and rail bridges across the Kerch Strait.

Resentment overflows

Yet even as these overwhelming costs accumulate, there is little sign that either side is ready to budge.

The Kremlin shows no regret, and the chances that it will reverse its annexation of Crimea are zero. The official attitude is one of defiance, as shown by claims that Western sanctions have helped improve efficiency, diversify the economy, and lay the groundwork for new strategic partnerships. Each March, the anniversary of the peninsula’s annexation has been symbolically marked by “Crimea Spring” celebrations.

The political elites in Ukraine remain equally committed to defending their own turf, fighting an effective rearguard action against new legislation to combat corruption and attempts to enforce existing decrees.

The EU leadership finds itself under growing internal pressure to lift sanctions against Russia. Italy’s Matteo Salvini has even floated the idea of recognizing Crimea as Russian territory. Yet this issue, too, remains stalemated. Lifting the sanctions without a Russian retreat would allow the Kremlin to win twice, an untenable result for the new brand of moralizing politics.

That brings us back to stalemate, which looks set to continue as long as Ukraine gets the minimum needed to stay afloat but not enough to make a real difference. The IMF noted in a 2017 report that corruption in the country remains “exceptionally high.” Yet with debt repayments of up to $20 billion coming due in 2018-2020, canceling support now would risk triggering a sovereign default. The same argument applies to EU aid. Scaling back outside support for Ukrainian civil society would simply encourage an increased wave of migration to Poland and ultimately Western Europe.

The core problem is that the costs of stalemate are too high to sustain indefinitely. Russia may try, perhaps, but the EU will increasingly chafe at the drain on its finances and patience. In Ukraine, the mirror image of Western “fatigue” is growing political resentment – seen most vividly in President Poroshenko’s crushing defeat at the polls on April 21 by the actor-comedian Volodymyr Zelensky.

For most ordinary Ukrainians, EU support for their government has become an increasingly empty gesture. As the stalemate is prolonged, the consequence will be to erode the only true success of Ukraine’s reforms, the emergence of a vibrant civil society. Once this final hope is extinguished, there will be no reason to believe in reform or the possibility of accountable government.

Stefan Hedlund is Professor and Research Director at the Centre for Russian and Eurasian Studies at Uppsala University.


The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.

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