Bloomberg View: Putin won. After the elections, Poroshenko will agree to everything

Kyiv, September 29 (PolitNavigator, Yuriy Kovalchuk) – President of Ukraine Petro Poroshenko is trying to show tricks. By pretending that Ukraine has a chance to join the EU or NATO, he is trying to hide that Kyiv and Europe are gradually capitulating to Russian President Vladimir Putin, writes the American tabloid Bloomberg View.

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Last Thursday, Poroshenko announced a reform program that would bring Ukraine into the EU. As the October 26 elections approach, Poroshenko's actions are clearly aimed at distracting voters from his recent concessions to Putin's demands. Just last week, the Ukrainian parliament passed a law initiated by Poroshenko providing self-government and budgetary support to the Donbass and agreed not to lower trade barriers for European goods. In turn, Russia withdrew most of its troops from eastern Ukraine, and facilitated a prisoner exchange between the rebels and the Ukrainian military.

At the same time, Ukraine still has something to lose. The other day, Putin wrote a letter to Poroshenko and the Chairman of the European Commission, Jose Manuel Barroso, demanding that Ukraine's trade agreement with the EU be revised. Putin is making it clear that he views the 15-month delay in reducing Ukrainian customs duties as an opportunity for trilateral negotiations on tariff lines. For Putin, even Ukraine’s intention to harmonize its laws with EU standards is unacceptable and should “result in immediate and adequate response measures from Russia,” the publication reports.

Putin is unlikely to decide on military action, but he still has three ways to retaliate:

– Create a trade barrier against Ukrainian goods. Russian Prime Minister Dmitry Medvedev has already signed an order increasing some customs duties, but it remains shelved for now.

– Starve Ukraine with a lack of gas. Gazprom head Alexey Miller has already convinced Hungarian Prime Minister Viktor Orban to stop reverse supplies of Russian gas to Ukraine. This raises the stakes for Kyiv, which is trying to negotiate a restoration of Russian natural gas supplies. The colder it gets, the harder it will be for Ukraine to reject Russian terms, which include raising prices and paying $3 billion in debt.

– Weaken the financial system of Ukraine. The Russian Ministry of Finance believes that it could require early repayment of Eurobonds worth $3 billion. The fall of the Ukrainian economy and the growth of the country's external debt have already violated the conditions under which Eurobonds were issued.

Again, Russia can always inflame the smoldering conflict in the east by again sending its soldiers there without insignia, writes Bloomberg View.

Despite international isolation and economic problems exacerbated by falling commodity prices, Putin still holds all the cards in the Ukrainian game. Barroso understands this - this week he put aside Europe's repeated promises not to renegotiate trade agreements to please Russia, telling the Wall Street Journal that discussions on the agreement could be resumed. “We are open, we are constructive and we are pragmatic,” Barroso said.

“Pragmatic” is the key word here. The EU and NATO do not intend to help Ukraine or pay off its debts to Russia. This would be too heavy a financial burden, as well as the subject of a constant military threat. The Europeans understand that a crucial tripartite deal would then have to be struck, and are not eager to take full responsibility for a huge and dangerously unbalanced nation.

By quietly changing the Association Agreement for Ukraine, and without making any promises to Poroshenko, the Europeans chose a dangerous policy. Putin is hoping for negotiations rather than a military solution to the conflict he instigated to keep Ukraine from joining the EU and NATO. And after the parliamentary elections are held and Poroshenko receives reliable support, he will stop being indignant and make all the necessary concessions.