Opinion: Ukraine: Who pays the bill?

While Enlargement Commissioner Štefan Füle offers the Ukrainians ‘strong’ financial backing, EU taxpayers are starting to wonder how much this will translate into actual currency. Ukraine's sovereign debt before the Maidan protests was more than €30 billion and the recent bill from Gazprom amounted to $18.5bn, so how strong will the EU taxpayer have to be to withstand this new blow to his pocket? The upcoming rotation of the EU's commissioners might give certain freedoms to the departing bureaucrats, but leave citizens with heavy burdens.

The decade of Barroso's presidency is leaving the EU limping in a process of economic recovery, with growing unemployment rates and, as a 'finale of seem’, armed conflict in the neighbourhood. Ukraine swiftly caught the flames of unrest, and is divided over its future between so-called pro-Europeans and pro-Russians. It was not so long ago that the EU received the Nobel Peace Prize, but the intense courtship of Ukraine engaging in the Association Agreement with the EU ended in violence and mass killings.

However, the major element of Barroso’s legacy will be the price of the Ukrainian bill for the European taxpayer - how much will the enlargement policy cost? And finally, what are the advantages  if any for EU citizens to associate with a de-facto bankrupt state?

Some would object, and rightly so, that in spite of the squalor of the Ukrainian state and population, there are rich people there as well – seven oligarchs are members of the new government, but there are no philanthropists among them so far. Nobody has stepped forward to participate in payments for gas, although the press reports that many of the Ukrainian nouveax-riche have made their fortunes on gas transits from Russia.

No less obscure concerning the costs of EU enlargement policy is Baroness Ashton (pictured, centre), the EU's top diplomat, who is heading the newly formed External Action Service (EAS), which is intended to promote European interests worldwide. Ashton’s promises to foot the Ukranian bill via the international institutions is in contradiction with the latest declarations by Commissioner Füle on ‘strong’ EU support. This financial obscurity of the terms and costs of Ukrainian integration and sovereign debt resolution, highly unpleasant for European taxpayers, is complemented by the other problem of the unpaid bills for Russian gas. The open letter by President Putin, highlighting the critical situation with payments and the ‘unsanctioned extraction’ of gas directed to European clients, did not produce any other effects but an additional blacklist of Russian officials banned from visiting Europe, a highly asymmetrical answer to a payment reminder.

Siberian gas has been a welcome commodity in Europe from the time of Brezhnev - European and Russian economies have grown interdependent during half a century. After Ukraine independence, the payments for gas transit became ‘easy money’ for certain groups of oligarchs, which fed corruption.

The current rejection of Russian company to deliver gas ‘for free’ is a cold shower for the pro-European forces in Ukraine and even more for the European clients – as in previous gas wars – thee were not Ukrainian themselves who suffered from the closure of the tap, but the ‘Gazprom’ losing income and the Europeans especially the countries dependent of Russian gas – like Bulgaria.

The last gas dispute in 2009 left the Bulgarians hostage to harsh winter weather and unsettled Ukrainian payments for Russian, however, just a week ago, they stopped South Stream pipeline construction in a protest against the annexation of Crimea. However, it could be the South Stream project that resolves the problems of gas transit to Europe, and fights Ukrainian corruption within the ruling elite, dependent on the fees for gas transits. Stretching from the Russian coast via the Black Sea to Bulgaria, it would diversify the energy routes to Europe and provide an incentive for the development of the diversified Ukrainian energy sector – wind, solar and bio – which could modernize the country’s economic landscape.

While the highly educated Ukrainian population certainly has a potential for economic development, to enhance it one should pay the current energy bills first. Will EU taxpayers be confronted with the Ukrainian bill? The sprawl of European values over the continent might end in excessive costs for enlargement. The perils of Eurocrats' hubris in wanting to win a victory over Russia engaging with the Ukraine will not harm the departing team: neither Commissioner Füle nor Baroness Ashton will confront the consequences of their policies.

The overestimations and miscalculations will hit the newcomers – Barroso’s legacy might be too heavy to bear for European citizens, preferring to depart from the EU's ambitious global conquest to fix the problems of their daily lives. Placing the interests of Ukrainians above the EU's own citizens will pave the way for the disengagement of the EU – Eurocrats can force the hand of taxpayers to bend to their whims, but in the long-run it will be the taxpayers who will have the last word.

In overstretching European resources and imposing their own ambitions onto EU citizens, the future inhabitants of the EU institutions risk finding themselves in great difficulty as taxpayers reject funding the European project.

Anna van Densky

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