Chaos in Ukraine Is Making Putin Stronger

Maidan Square in Kiev, Ukraine

(Bloomberg – – Aliaksandr Kudrytski, Volodymyr Verbyany – February 17, 2016)

Two years after Ukrainians shed blood on the streets of Kiev to crush a Kremlin-backed kleptocracy, the country of more than 40 million people is back on the brink of failed-state status.

The government’s long descent into chaos reached a new nadir this week, when amid reform delays and a cacophony of corruption claims President Petro Poroshenko sought Prime Minister Arseniy Yatsenyuk’s removal in parliament, only to be rejected by a majority that included two dozen members of his own bloc.

More defections followed as Yuliya Tymoshenko, the darling of the Orange Revolution a dozen years ago, pulled her party out of the ruling coalition. A fourth ally, Samopomich, will discuss its future in the government on Thursday. Both groups accused Poroshenko and Yatsenyuk of staging the no-confidence vote spectacle to preserve the status quo and deflect blame for corruption, which polls show the public holds them responsible for.

“Ukraine had a cynical government coup, organized by the president, the prime minister, the kleptocratic part of the ruling coalition and the bloc of oligarchs,” Samopomich said on its Facebook page. “The process was ruled by deceit, tyranny, dependence on money and total ignorance of people’s needs.”

The infighting is jeopardizing the flow of aid from a $17.5 billion bailout and hampering the economy’s recovery from an 18-month recession, which was fueled by Russian President Vladimir Putin’s annexation of Crimea and support for a separatist war that’s claimed more than 9,000 lives.

Oleh Liashko, a populist leader who once publicly showered Ukraine’s central bank governor with fake dollars, said Thursday his Radical Party is ready to join the ruling coalition. “Here’s my hand, I’m reaching it out to those who want to help the country overcome the crisis,” he told lawmakers in Kiev, a day after he called for portable toilets to be installed in the parliament chamber and the doors barricaded so that deputies could work without interruption.

The former communist state has lurched from crisis to crisis since shedding Russia’s yoke with the collapse of the Soviet Union 25 years ago. Its failure to tame a “feudal” oligarchy and end endemic graft after the 2014 ouster of Viktor Yanukovych, a Putin ally, is finally exhausting the patience of sponsors in Washington and Brussels, said Joerg Forbrig, senior program director at the German Marshall Fund of the U.S. in Berlin.

If Ukraine fails to seize what may be its last chance to enact meaningful reforms, the West will abandon the country, sparking a new crisis and more protests by a betrayed public, according to Forbrig.

“Ukraine will effectively implode,” Forbrig said. “Russia, which has long worked through oligarchic structures, will be able to manipulate the country at will. The Kremlin will triumphantly portray this failure and celebrate its own autocracy as superior.”

Advantage Putin

The divisions in Kiev may hand Putin an advantage in the Minsk peace process aimed at resolving the conflict in the east. Poroshenko has so far failed to muster the two-thirds majority in parliament needed to pass constitutional amendments called for in the Minsk accords, which would give more powers to pro-Russian separatists.

“The Russian leadership’s idea is very simple — to freeze the situation,” said Igor Bunin, director of the Moscow-based Center for Political Technologies. Greater autonomy for rebel areas will help Putin prevent Ukraine from joining the EU and NATO, he said.

Still, Putin is keeping up the pressure on Poroshenko in other ways.

Russia on Wednesday filed a lawsuit against Ukraine in the High Court in London seeking repayment of $3 billion of bonds Yatsenyuk’s government defaulted on.

The legal action followed “numerous unsuccessful attempts” to establish dialogue with Ukraine, Finance Minister Anton Siluanov said. “I expect that the process in the English court will be open and transparent.”

No Revolution

Yatsenyuk’s struggles have no direct bearing on the conflict in the east because the rebels are controlled by Moscow and Putin won’t permit a major offensive while he’s seeking to get EU and U.S. sanctions lifted, according to Volodymyr Fesenko, head of the Penta Political Analysis Center in Kiev.

The premier is one of the most unpopular politicians in Ukraine because of the lack of reforms, but the level of dissatisfaction “isn’t enough for a revolution,” Fesenko said. “People are more preoccupied with survival.”

That sentiment was echoed on the streets around Maidan, or Independence Square, the epicenter of the protests that drove the country’s Kremlin-backed president from power two years ago.

Svitlana Rodionova, 51, and her husband Oleksandr, 54, tourists from Sumy near the border with Russia, said nobody has the energy for another revolution, everyone is too busy just trying to make ends meet.

“There are still quite a lot of people staring toward Russia,” Oleksandr said as he paused on Heavenly Hundred Heroes Avenue, where most of the killings during the 2014 uprising took place. “But it’s clear there’s nothing there worth looking at. We need to move toward Europe.”

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