Yalta European Strategy Turns into ‘Old Boys’ Club of Ex-‘Elite’

By Taras Kuzio,

Kyiv Post

I have never been invited to Victor Pinchuk’s annual “old boys” get-together in Yalta and if I was invited I would not go. No, I am not envious of those who get a free holiday in Yalta and are able to use rooms where the big statesmen sat in 1945 to decide the future of Europe.

Pinchuk is, by far, the most intelligent of Ukraine’s oligarchs (can one still call them thus?) and began his self-rehabilitation near the end of the administration of his father-in-law, Ukrainian President Leonid Kuchma. He invited U.S. VIP’s to Ukraine, such as Henry Kissinger and former President George H.W. Bush. He also began to put funding into Ukrainian projects in Washington D.C., one of which (at the Petersen Institute of International Economics) led to Anders Aslund’s book on how Ukraine became a market economy and democracy.

During the late Kuchma era, Pinchuk’s reputation was damaged in a couple of ways. He was tarnished by his financing, through the Labour Ukraine Party, of the notorious documentary “PR” for the 2002 elections. It sought to show that the Mykola Melnychenko tapes – which allegedly captured extensive Kuchma-era corruption on tape – and the whole ensuing scandal were an American conspiracy. Secondly, Pinchuk’s unsavoury side was exposed by his involvement in the controversial purchase of steel mill Kryvorizhstal in July 2004. To his credit, Pinchuk admitted his involvement was a mistake and the alleged sham was rectified by a televised auction in 2005 in which the high bidder paid $4.8 billion – eight times the price paid by Pinchuk and another Ukrainian billionaire, Rinat Akhmetov.

Yalta European Strategy (YES) summits have an air of an oligarch "old boys club" as it reminisces about the “good old times” under Kuchma. The former president and his ilk can go and, in effect, be rehabilitated as his son-in-law is organizing the event.

Do these summits promote Ukraine’s membership into the European Union? Perhaps. If so, then Pinchuk deserves credit. Other Ukrainian oligarchs, such as Ihor Kolomoisky and Kostyantin Zhevago, do not fund such non-governmental organizations and summits. But the concept of the Yalta European Strategy is elitist, not grassroots. While lobbying among the elites of Europe is important, so too are promoting pro-European views among the general public. In addition to focusing on elites, Pinchuk’s strategy has two drawbacks.

Firstly, it is disingenuous by seeking to make Ukraine different than other post-communist countries that joined NATO ahead of joining the EU. Pinchuk is opposed to NATO membership and presumably sees Ukraine as striving to only join the EU. In other words, Ukraine would follow the path of Sweden, Finland, Ireland or Austria. There are though other examples. Norway and Turkey are members of only NATO, and not the EU. Switzerland, Iceland, Norway, Switzerland, and Liechtenstein are members of the European Free Trade Association, but not the EU.

Secondly, one major reason why the Yalta European Strategy focuses on the EU is because it is believed that Russia is only hostile to NATO enlargement into Ukraine. Hence, Moscow has bluntly stated its objections to NATO encroachment into its “privileged zone of interests,” including membership for Ukraine and Georgia.

Where Pinchuk’s gathering fails is over the question of Russia’s likely responses in the event that Ukraine is offered EU membership. Russia would be negatively disposed to Ukraine’s EU membership if it became a realistic option. How would Pinchuk’s strategy adapt to Russia’s opposition and the prospects of the Russian-Ukrainian border becoming a new Schengen line for visas?

Politicians and businessmen from the so-called “centrist” camp who supported Kuchma prior to 2004 have a mental block when it comes to dealing with Russia. They are convinced that they know best how to deal with Russia compared to national democrats. This was part of Kuchma’s 1994 campaign slogan over his opponent, Leonid Kravchuk, and Victor Yanukovych’s 2010 election campaign slogan over his Orange Revolution opponents. Their romantic illusion about Russia’s good intentions translates into 80 percent of Ukrainians holding positive views of Russia. Meanwhile, an anti-Ukrainian media and ideological campaign is under way in Russia that has convinced two-thirds of the nation to view Ukraine negatively. As a Ukrainian think tank expert wrote in the leading Ukrainian Internet news portal Ukrainska Pravda after analyzing these divergent polls: “We like them. They don’t like us”.

Pinchuk deserves credit for being the first oligarch to attempt to undertake a private initiative in the sphere of Ukraine’s European integration through the Yalta European Strategy. But over the course of the last five years, the summit has stagnated and lost its purpose. It is now an “old boys club” of “former” members of the "elites". It also sidesteps Ukraine’s longstanding relationship with NATO and Russia’s likely objections to Ukraine’s EU membership.

 Dr. Taras Kuzio is a senior fellow in the chair of Ukrainian Studies at the University of Toronto and editor of the bi-monthly Ukraine Analyst. He can be reached at tkuzio@rogers.com