EUreporter: Forecasts Medvedchuk, made in 2013, come true fully

EUreporter: Прогнозы Медведчука, сделанные им еще в 2013-м, сбываются в полной мере

Henry George, EUreporter; translation 112.ua

Ukraine now is a country at a crossroads. A country in Eastern Europe trying to figure out what went wrong in 2014. Then the revolution determined the Western vector of Ukraine’s development. The country signed the Association Agreement with the European Union and has declared that it will move towards accession to the European community in the future. However, the presidential elections demonstrated that Ukrainian society is not satisfied of what is happening and needs to change. Serious problems in the economy, the war in the Donbass, political instability is not required by the Euromaidan. In 2013, Ukraine had an alternative – to join the Customs Union, which promised more economic benefits for the country. However, this option has been discarded, and many now believe that nothing.

The European or Customs Union?

About the dilemma of EU – TS in Ukraine began in early 2013. Ukrainian authorities have set their sights on integration with the European Union, but at the same time wanted to fully cooperate with the Customs Union, without fighting. Moscow, in turn, counted for full membership in the customs Union. But Kiev warned that the simultaneous economic integration of Ukraine with the several associations are quite complex and for a large economy can become, in principle, impossible.

Ukraine had to choose. Sparked a serious discussion of where to lead the country, not to miscalculate.

Opponents of the vehicle has advanced the main argument is that Ukraine may lose its sovereignty. Although more sensible policy, such as Viktor Medvedchuk, then head of the public organization “the Ukrainian choice”, and now the Chairman of political Council of party “Oppositional platform For life,” pointed to the fact that the Customs Union is an economic agreement between independent countries. It would be an exaggeration to say that now, abandoning the Russian vector of Ukraine maintained its sovereignty. Otherwise, the current presidential candidates did not go on trials in France and Germany – in the hope that they will approve. It is simply impossible to imagine in a similar role trump and Clinton or the Makron and his rival Le Pen. But Russia rejected Ukraine is a given.

Opponents of the vehicle also appealed to the fact that in case of joining the Customs Union ordinary Ukrainians become less available European goods, instead of which will be actively promoted Belarusian and Russian. Also talked about the decline of the quality of goods.

But subsequently the socio-economic situation in the country has developed so that the Ukrainians in General was not up to the quality of the goods they acquire. Two-thirds of the earnings of the average citizen is spent on food and communal. So minuscule that remains, not to pay for quality imports.

However, the alternative course was a lot of pluses. First and foremost, for Ukraine’s economy.

First, the restoration of cooperation, that is, the production chains of the Soviet era, would be an increase in the number of industries, particularly in mechanical, aircraft and shipbuilding. And this, in turn, would provide jobs and stable earnings Ukrainians employed in these areas.

Secondly, a significant reduction in the price of oil and gas would have removed the financial burden, which is now choking the Ukraine. In 2013, Viktor Medvedchuk noted that in the case of Ukraine’s accession to the CU annual savings for gas only amounted to $ 10 billion. “This is the money that will remain in the budget annually and can be used for social development. These preferences comparable to the loan of 15 billion, which the government is trying to obtain from the IMF – along with unacceptable to us interest and obligations”, – said Medvedchuk.

Finally, with the accession to the customs Union Ukraine would get access to the markets of the Customs Union, under which all restrictions on exports were lifted.

Supporters of the CU pointed out that even if bound by Treaty, Ukraine would be able to increase exports to the European Union without the Agreement of the Association. But since main markets of the Ukraine in the East, not the West, it benefits from duty-free trade with Eastern countries is much higher than would be the AA with the EU.

Despite all the arguments, the authorities of Ukraine elected in 2013, the Western vector of development. But focusing on political and economic Union is economic, Ukraine in fact won nothing, but lost a lot.

Against the power of society

The deteriorating “health” of the country, which is observed the last few years, due not only to declining living standards. Initially, the choice of the majority has been trampled and ignored. As noted by Viktor Medvedchuk, in 2013, “46.2% of the number of Ukrainians voted to become a full member of the customs Union with Russia, Kazakhstan and Belarus. Or about 57.1% of the number of undecided citizens.”

“The responses of the citizens once again convincingly confirmed that the majority of Ukrainians are well aware of what is behind the slogan “the West will help us”. Will help to become a world debtor and bankrupt? Will help to destroy many of our industries, to become their raw materials? Become a source of cheap labor and markets for its far not the best product? Or we try to ignore that, for example, markets are crammed with imported apples and potatoes, stuffed with nitrates, while our farmers are forced to throw away thousands of tons of their products?” – asked the politician.

In this situation Medvedchuk is very difficult to argue anything. 21 Mar 2014 were signed political part of the Association Agreement of Ukraine with the EU. The period since the first rapprochement between Ukraine and the EU is sufficient in order to see some results. As accountable government, Ukraine has increased exports to the EU to 42.6% of the total. For comparison, the rate of exports to CIS countries amounted to 14.8%. 42% is a record for Ukraine, but in terms of money Ukraine has abruptly put into exports.

Unfortunately, it’s happening what I warned Medvedchuk: Ukraine was and remains a raw materials appendage of Europe. The country exports mostly not finished products, and raw materials. Simplification or complete abolition of customs regimes does not guarantee the expansion of export of Ukrainian goods and services. Ukrainian producers were objectively uncompetitive, which is understandable, given the structure of the national economy, technological backwardness and poor infrastructure.

The Europeans are willing to buy Ukrainian grain, oilseed, corn, honey and processed tomatoes, which Ukraine will export in the duty-free tariff quotas. But because of quotas, it can not implement the entire amount of their products, so again right after Viktor Medvedchuk: Ukrainian farmer is left alone with too large volumes of farmed products. To sell it is impossible, and to remove from the field unprofitable. Even fuel for cars (not to mention their depreciation) is worth more than the effort to collect fruit and vegetables.

Needless to say about the fate of such technological giants as Antonov, Yuzhmash, etc.? They are in decline, surviving on the crumbs that support them from total destruction. This is the reverse of the European Association – the West will not support Ukrainian technologies to the detriment of their companies.

It is noteworthy that in Europe is also dissatisfied with Ukraine, considering that the country has fulfilled its obligations to the EU only 42%. MEP Rebecca harms called the previous expectation from the Ukraine “too optimistic”. In other words, the current course of Ukraine is disappointed with both its own citizens and those whom Ukraine has chosen in partners.

The biggest failure

The greatest luck and the greatest demonstration of separation from Russia, the current Ukrainian government considers the so-called gas independence. Which is in fact the most ambitious fiction and failure. Formally, it is believed that, as of 26 November 2015, Ukraine stopped importing Russian gas and, as they say, “jumped off the Russian gas needle”. In fact, Russian gas has not disappeared from Ukrainian pipes, the only difference is that he gets there by reverse. No energy independence, so Ukraine is not reached. Forced buying “European” fuel, Ukrainians pay for it heavy price.

As it is now commented Viktor Medvedchuk, “when it is conducted fair investigation scheme “Dusseldorf plus”, the resonance will not be less than the investigation of plunders in “Ukroboronprom”. People are trying to tell the myth that gas is supplied from abroad, but actually on the border of Ukraine he is not going away,” said the politician. And he adds: income from the scheme “Dusseldorf plus” estimated amounts 400-420 million dollars a year. And this profit gets not even a state, and individual businessmen.

Ukraine needs to move away from externally imposed gas strategy and to return to the practice of direct purchases of gas from Russian “Gazprom”, getting rid of intermediaries, said Medvedchuk. But to realize such a goal much easier by being in close contact with partner – in particular, staying with him in the same economic space.

Accurate predictions of Medvedchuk

Several years ago the Ukrainian government was full of naive notions about the benefits that will fall on the country from the European cornucopia. In fact, the disintegration of Russia and its partners in the Customs Union has led to multibillion-dollar losses. Bilateral trade turnover with Russia decreased by $ 26.5 billion: from 38.2 billion in 2013 to us $ 11.7 billion in 2018. Whereas direct export losses of Ukraine in trade with Russia over the 5 years amounted to 49.4 billion dollars. After the five-year “path to Europe” the sociological data indicate that citizens of Ukraine are increasingly coming to realize the fallacy selected in the 2014 Pro-European course and the reduction of relations with the CIS countries. 75% of respondents in April 2018 of respondents stated that Ukraine is moving in the wrong direction. Most dissatisfied with in the southern and Eastern regions. Gradually increasing the query and the changes, say sociologists. Today, almost 70% of respondents believe that the country needs a radical change, and 16% of respondents would like to return everything as it was until 2014. The highest percentage of supporters of change among young people to 40 years, as well as among more affluent and more educated respondents.

The bleak predictions of the Victor Medvedchuk, made in 2013, fulfilled to the fullest. A separate line is possible also to mention the rampant labor migration, which warned the politician. Now on the European labour markets, Ukraine supplied more than 4 million “guest workers”, and this figure continues to grow. In the framework of cooperation with the Customs Union such leaching personnel could have been prevented.

However, says Viktor Medvedchuk, “those who claim to “European values”, must have the courage to admit that European democracy is that the majority opinion is the law. As well as the fact that people are entitled to Express their position, especially when it comes to solving the strategic problems facing the country. Democracy is when a minority imposes its will on the majority.”

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