Archive for March 14th, 2014

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Unhappily content – Ukrainian solutions

March 14, 2014

A few days ago, when briefly pondering upon Viktor Yanukovych’s second press conference from Rostov-on-Don and his comments regarding his return to Kyiv, I wrote “The second is some form of negotiated return – which is almost impossible to conceive and would certainly not be a swift negotiation, and/or legal challenges through the Ukrainian courts that retain judges loyal to those around Viktor Yanukovych, both removing any notion of “soon”.”

Whilst a negotiated return remains almost beyond comprehension – President Putin acknowledging Viktor Yanukovych had no political future in his own press conference of 4th March – the legal challenges I mentioned are now forthcoming regarding the legitimacy of the current interim leadership.  By extension any court decision will therefore legitimise – or not – any actions taken by the interim government thus far and in the future.

How legitimate would the signing of the political part of the EU-Ukrainian Association Agreement/DCFTA be should the domestic Ukrainian court rule the current interim Ukrainian government illegitimate despite the international recognition by those with whom it will sign?

It would be very problematic not to recognise any decision of the Supreme Administrative Court with regard the legitimacy of the current leadership, whilst relying on the judgement of the Constitutional Court to dismiss the Crimean referendum as unconstitutional adding weight to decisions made in various foreign capitals already.

Naturally any court decisions are likely to be appealed prolonging matters further anyway – regardless of the judgements.

A somewhat potentially messy outcome over who recognises whom, their subsequent decisions, and from which internal institutions and domestic constituencies – no?

Thus far few plans to accommodate an unhappily content outcome for all have been made public – but this one from Alexander Chaly seems to be one where everybody will be unhappy and yet content.  In short a diplomatic outcome where all positions are sacrificed at the alter of interests and needs.

International law and treaties retained regarding sovereignty, internationally negotiated  solutions to internal Ukrainian strife by the Polish, French and German FMs adhered to (less provisions relating to Viktor Yanukovych), Crimea gets its referendum regarding far greater autonomy whilst remaining Ukrainian.  Russia receives guarantees regarding the Black Sea Fleet and Russian language status, the EU and Ukraine sign the Association Agreement with the DCFTA can kicked down the road for discussion by the EU, Russia and Ukraine – either jointly or bilaterally.  Ukraine formally becomes a neutral state recognised as such by international institutions and sovereign nations globally in an attempt to remove it from all geopolitical chessboards.

Whether something resembling this plan comes to pass or not remains to be seen – it is ambitious.

Yesterday Mr Putin had a closed door meeting with the Russian oligarchy – presumably to gauge just how badly damaged they would be by sanctions, or to tell them to prepare for what is about to come by way of sanctions should the Crimean situation remain unchanged/annexation occur/accession to the Russian Federation occurring.

ruble

He may well be wise to be more concerned with the above chart – the Ruble getting a hammering and thus currency exchange rates will annoy the Russian public beyond blind support of “strong leadership” and “rightful reclamation of Crimea” eventually – or perhaps he fears the oligarchy may desert him before the public?  How greatly external sanctions if and when applied will multiply market anxiety and further worsen that chart remains to be seen.

Whatever the case, there is a clear Kremlin tactic to keep the situation destabalised until Mr Putin decides to take Crimea and any economic pain that comes with it – or seek some form of diplomatic agreement as outlined by Mr Chaly.

The price for maintaining destabilising tactics in Ukraine is that it also destabilises the Russian market outlook too, and whilst clearly that economic pain is being accepted by The Kremlin, is not an indefinitely  sustainable tactic.

Will the decision to take Crimea be made to put an end to market suspense, or is the plan to keep the situation unstable until May to disrupt the planned Ukrainian presidential elections?  Perhaps it will be both.

It is not a question of how much pain The Kremlin is prepared to take – it is certainly prepared to take self-inflicted wounds in pursuit of its own interests – the questions are how long it is prepared to take that pain and how much of its agenda will be realised during that time?

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