How the EU misjudged Ukraine and Russia – and how it's adjusting

The EU's $15 billion aid package says as much about what Europe is doing to correct its dealings with Russia as about its commitment to Ukraine.

The $15 billion aid package to Ukraine that the European Union unveiled today is potentially a huge boost to the country's ailing economy. But it could be just as important for what it says about Europe's reassessment of its dealings with both Ukraine and Russia.

The aid package and a toughening position on Russia – EU heads of government are meeting in Brussels tomorrow to consider placing sanctions on Russia unless it de-escalates the military situation in Crimea – are, in key ways, corrective measures. EU foreign policy leading up to the crisis in Ukraine was marked by ambivalence and naivete, say experts.

The crisis in Ukraine began in November, after then-President Victor Yanukovych rejected a trade and association agreement with the EU, under financial threat from Russia. Thousands of Ukrainians took to the streets in protest in November, which became increasingly violent. Ultimately, the protests led to the ouster of Mr. Yanukovych, which in turn triggered a Russian military intervention in Crimea and furious East-West diplomacy.

The EU widely miscalculated Yanukovych’s intentions at the time, says Jan Techau, the director of Carnegie Europe in Brussels. He was more interested in holding onto power than carrying out long-term reform the EU demanded of the post-Soviet nation. But the agreement also failed because it didn’t offer the kinds of immediate aid that Ukraine needed.

Much of the aid package announced today will have strings attached to it. The immediate money, along with the $1 billion package announced by the US yesterday, is intended to keep Ukraine from collapse. But it also represents a “carrot” missing from the original trade and association deal, says Joerg Forbrig, an Eastern Europe expert at the German Marshall Fund of the US in Berlin.

“Part of the reason why the old government under Yanukovych rejected [the EU deal] was that it did not come with short-term benefits. It only promised long-term benefits,” he says. “This is the much needed improvement of the EU offer to Ukraine.”

Misjudging the Russian reaction

The EU, leading up to crisis, also failed to calculate how seriously Russia viewed closer trade ties between the EU and Ukraine as a geopolitical threat, says Daniel Keohane, head of strategic affairs in the Brussels office of the Spanish think tank FRIDE. “There was a lack of strategic thinking,” he says.

Since then, Europe, particularly Germany, has realized just how serious Russia is in its zero-sum thinking – even regarding issues as simple as trade – and have learned lessons from those miscalculations, says Mr. Techau. “There was a lot of illusion and naivete about Putin’s real motivation and about the world view he has,” Techau says. “There we had quick and harsh learning curve.”

There are still challenges to a joint position on Russia in Europe. Countries like Poland, which still feel threatened by Russia, want a much tougher stance, while Germany and Britain have traditionally been more reticent, as both depend on Russia for different reasons: energy needs in Germany, and the wealth that Russians generate in Britain, particularly London.

But Mr. Forbrig says this crisis could push member states beyond those traditional divisions. Unanimity over sanctions could come tomorrow at the EU leaders' meeting in Brussels, a scenario that was unimaginable prior to the crisis.

"Let's start to initiate the path of dialogue, but at the same time tomorrow there is an EU summit and sanctions could be voted tomorrow if there is no de-escalation,” French Foreign Minister Laurent Fabius said on BFM TV Wednesday.

Wholly embracing Ukraine

Ambivalence about what Ukraine means to Europe has been a stumbling block to EU relations with Ukraine since it gained independence, and those divergences are stubborn.

“The EU is good at giving money and signing checks. But when it comes to issues related to direct foreign policy, to the political dimension, there are still countries that are for and against Ukraine’s future in the EU. That is not going to change,” says Amanda Paul, an analyst at the European Policy Center in Brussels, speaking before the crisis flared over the weekend.

But as it tries to defuse tensions, it has put forward a united front, reflected in words today by European Commission President José Manuel Barroso when unveiling Europe’s aid package. "There is a deep interest in Europe that we have stability in Ukraine, which is also important for global stability," he said. "It's very important that there's a strong response from the international community."

“Unanimity is the harshest instruments that [the EU] has in the tool box,” says Techau. “It is hugely important also as a signal to Putin, that [it is] not the case that you can divide us in the middle and play us against each other.”

This unanimity might not alter the course of Russian military action in Crimea, but when combined with aid, it is a way for the EU to exert influence over the political process in Kiev, says Techau. Although the EU's failure to offer immediate aid – a failure in short-term thinking – helped ignite the crisis, long-term strategizing is where the bloc thrives. 

“The Europeans want to turn this into a situation where their long-term tools can work again,” Techau says. “This is the beginning of this process.”

The EU can wield clout in this crisis, even more than the US or Russia, says Forbrig. “The EU has an economic potential to support Ukraine that is way superior to Russia,” he says. And with both Ukraine and Russia on its doorstep, it has more leverage than the US, especially in its energy relations with Russia.

“Americans don’t have the same trade relationship with Russia,” he says. “The Europeans should use that leverage.”