It appears Ukranian President Viktor Yanukovich may have had a change of heart. He has reportedly told the European Union’s foreign policy chief he “intends to sign” a trade deal with the E.U. that he rejected just last month. The news comes after the U.S. says it was “disgusted” by government crackdowns on protesters in Kiev and that it is considering sanctions against the former Soviet republic. Ukraine is heading for default in early 2014 without financial assistance, and an agreement with the West could bring in fresh investment with E.U. nations. But Yanukovich also faces pressure from Russia, which controls the flow of cheap natural gas into the republic. Guest host Susan Page and her guests discuss the unrest in Ukraine.

Guests

  • Roman Popadiuk served as the first U. S. Ambassador to Ukraine under George H.W. Bush from 1992 to 1993
  • Steve Pifer senior fellow, Brookings Institution. He served as U. S. Ambassador to Ukraine from 1998 to 2000 in the Clinton administration.
  • David Herszenhorn correspondent, The New York Times reporting from Kiev, Ukraine.
  • Anders Aslund senior fellow, Peterson Institute for International Economics. He examines the economies of Russia, Ukraine, and Eastern Europe.
  • Andrei Sitov Washington bureau chief, Itar-Tass news agency of Russia

Transcript

  • 10:06:53

    MS. SUSAN PAGEThanks for joining us. I'm Susan Page of USA Today sitting in for Diane Rehm. The European Union forum policy chief says that the president of Ukraine intends to sign a trade deal with the E.U. That news comes after the U.S. State Department said it was evaluating possible sanctions against the former Soviet Republic.

  • 10:07:13

    MS. SUSAN PAGEJoining me in the studio to talk about the latest unrest in Ukraine: Anders Aslund with the Peterson Institute for International Economics, Andrei Sitov of the Itar-Tass news agency of Russia, and Steve Pifer, a former U.S. ambassador to Ukraine for President Clinton, now with the Brookings Institution. And, joining us by phone, Roman Popadiuk, he was the first U.S. ambassador to Ukraine for President George H.W. Bush. Welcome to you all.

  • 10:07:42

    MR. ANDERS ASLUNDThank you.

  • 10:07:42

    MR. ANDREI SITOVThank you.

  • 10:07:42

    MR. STEVE PIFERHappy to be here.

  • 10:07:43

    PAGEWe invite our listeners to join our conversation in this hour. You can call our toll free number, 1-800-433-8850. Send us an email at drshow@wamu.org, or find us on Facebook and Twitter. First, joining us by phone from Ukraine is David Herszenhorn. He's a reporter with The New York Times who is covering the protest in Kiev. Thanks so much for being with us, David.

  • 10:08:06

    MR. DAVID HERSZENHORNIt's great to be with you.

  • 10:08:08

    PAGESo tell us, what is the situation in Kiev right now?

  • 10:08:11

    HERSZENHORNThere are thousands of people still on the streets. The protests continue. Of course, two nights ago, what we saw was a major mobilization by the police coming in with an extraordinary amount of force, pushing demonstrators into a much more enclosed space. They brought in bulldozers and heavy equipment, tore down a lot of the barricades that the protesters had put up, took away many of the tents and other structures they had set up in the square.

  • 10:08:35

    HERSZENHORNIt was a siege that lasted about nine hours, and then, abruptly at 10:30 yesterday morning, they pulled out completely. The result is just, you know, retaking the square. They built up those barriers even bigger and stronger than before. It's quite an effort, shoveling snow from all over the city, stuffing it into sacks and building these snow walls that are being watered down and iced over along with all kinds of metal and other debris that they found, really ensconcing themselves for a continuing fight.

  • 10:09:02

    PAGESo this incursion by the riot police did not succeed, it doesn't look like, in what it was intended to do. What do you think it was supposed to do? What was the message of sending in those riot police?

  • 10:09:13

    HERSZENHORNWell, whether it succeeded, of course, depends on the goal. And if the goal was to show an extraordinary amount of force to send a message from President Yanukovych and the government that these protesters are there by the good graces of the government, which has enough power and force to come in and clear them potentially if necessary, it may have succeeded.

  • 10:09:30

    HERSZENHORNIt certainly -- television images that can be shown especially in Russia where there's quite a lot of alarm about this sort of mayhem on the streets, that there is some effort to contain and control it, in that sense, it created those images. On the other hand, it's not clear that, had the police pushed harder, had they reached for their clubs, which were certainly hanging at their sides, that this wouldn't have turned into a very violent and bloody situation and then escalated even further.

  • 10:09:53

    PAGEDid it intimidate the protesters?

  • 10:09:56

    HERSZENHORNAgain, they were scared. They were pushed back. But they are determined. And they stayed there through the night. Hard to explain to you what the freezing cold and the conditions they're under surrounded by thousands of police in helmets and yet stood there in front of the stage -- there's a pop star, Ruslana, who's been leading them in exercises to keep warm. They were there through dawn. Daylight comes out. The troops have retreated. And so they're actually energized, aggravated, animated. This protest shows no signs of letting up.

  • 10:10:26

    PAGEThe foreign policy chief for the European Union met with the president of the Ukraine yesterday. And in Brussels this morning, she said that he had told her that he intends to signs this agreement with the E.U. His refusal to sign it sparked this round of protests. Do you believe that that's true? Is this a change of heart on his part?

  • 10:10:47

    HERSZENHORNWell, Susan, with all due respect to our colleagues in Brussels, the reports there were very inaccurate. She said the very same thing here yesterday at a briefing in Kiev and I personally challenger her, to ask her does she believe him, because this is the same thing that Viktor Yanukovych has been saying since the summit in Vilnius. Many of us were there where he was supposed to sign these accords. And what he's been saying all along is, not now, but we're not saying never, later, maybe in March, maybe if the right conditions are met, if Ukraine's interests are taken into account.

  • 10:11:15

    HERSZENHORNThis is what he's been saying. And so Lady Ashton said yesterday that, once again, she'd met with him, and, once again, he'd assured her that he has every intention of signing. And folks like me are saying to her, well, do you believe him? And she won't go so far as to say that she believes him. What she says is, well, this is the message that he wants me to carry back to Brussels.

  • 10:11:31

    HERSZENHORNShe's carrying it back to Brussels, but some folks mistook this to be news, when, in fact, there has been really no change in what President Yanukovych is saying. We've got a meeting next week with President Putin of Russia again. Ukraine is in a very serious financial crisis. They're looking for aid in various quarters, including in Moscow, including in Brussels, including in Washington at the IMF.

  • 10:11:51

    HERSZENHORNAnd we just (word?) know exactly when, (unintelligible) rumors that an agreement is in the works with Russia. But in terms of what Catherine Ashton in Brussels today -- here in Kiev yesterday -- that really is no different than what's been said all along, which is that there is no plan to sign the agreements with Europe now, but that doesn't close off the door to signing them later.

  • 10:12:14

    PAGESo not a change of heart. So if that's not the way out, what is -- do you think there is an end game at play here? Can you see how this eventually resolves itself? Or is that really unclear at this point?

  • 10:12:27

    HERSZENHORNWell, you've got a lot smarter folks in the studio with you there. I'm very interested to hear what they're going to tell you about what are the different ways forward. These are policy experts who really have a better grasp than I do. I can tell you more about the situation on the ground.

  • 10:12:38

    HERSZENHORNCertainly, we are seeing some negotiating happening behind the scenes, folks who think some resolution in this would be a change at the highest level of government that protest opposition leaders (unintelligible). This might mean that (unintelligible) prime minister but bringing in someone who is sort of acceptable to President Yanukovych to the major business interests, the so-called oligarchs here, someone who could lead the country forward.

  • 10:13:04

    HERSZENHORNBut, again, there are a lot of power politics at play. It's not clear what Russia is prepared to do. In the event that there is a change of heart and Ukraine moves forward with these agreements with the E.U., the Kremlin has been very clear that it would bring heavy trade sanctions on Ukraine if it moves (unintelligible) these ties to Europe. And so there is not a very clear road not forward. But, again, I'm really interested to hear what your guests have to say.

  • 10:13:30

    PAGEAnd, David, one last question that goes to what you may be seeing on the ground. When I was preparing for the show yesterday, I went on Twitter -- of course, the communication of choice for these crises now -- and I saw tweets by the U.S. ambassador of photos that showed the American assistant secretary of state passing out bread to protesters. Were you there for that scene? 'Cause it seemed quite remarkable to me.

  • 10:13:53

    HERSZENHORNI was not there for that immediate scene, but certainly we've seen (unintelligible) and Secretary of State Victoria Nuland in the square. She was handing out bread, but also Catherine Ashton herself, as well as the German foreign minister. And, again, you've got some former diplomats in the studio with you. It's a real open question.

  • 10:14:11

    HERSZENHORNHow diplomatic a maneuver is that, to not just stand up and defend the rights of these demonstrators to express their views, but to be out there literally at the barricades expressing support? At the same, Victoria Nuland was giving our bread to police officers. The demonstrators were clear to her that, in fact, they feel bad for some of these officers who have to stand in the cold just like they do.

  • 10:14:36

    PAGEDavid Herszenhorn, a reporter with The New York Times covering the protest in Kiev, thanks so much for being with us.

  • 10:14:42

    HERSZENHORNSure thing.

  • 10:14:43

    PAGENow, we heard David pay homage to our guests in the studio, so let me turn to you and ask you what you think of what is going on there. Anders Aslund, what do you make of the situation there? Is there -- are we at a fork in the road? Is it clear what's going to happen next? What are we watching for?

  • 10:15:02

    ASLUNDI think the real issue here -- it's not the financial crisis. It's not Russia or the E.U. The real issue is democracy over dictatorship in the Ukraine, where Europe represents democracy and the rule of law. And Russia represents the lawless rule of Viktor Yanukovych.

  • 10:15:22

    PAGEYou know, Roman Popadiuk, you were there in Kiev for the beginning of the independent Ukraine. What do you think these protests reflect? What is happening there? Roman?

  • 10:15:33

    MR. ROMAN POPADIUKHello?

  • 10:15:34

    PAGEYes. Roman, hi. I'm sorry. We didn't have you there for just a moment. So let me ask you, what do you think is happening there in Ukraine?

  • 10:15:42

    POPADIUKI think these protests reflect something very fundamental in terms of the democratic tendencies of the Ukrainian people. I think one thing that you could look at from a historical perspective is there's been a disconnect between the Ukrainian political leadership and the people. And the first few years, first decade or so of independence, it was easy for the government to operate because you basically had, for lack of a better terminology, a docile populace, one that was used to authoritarian rule and to kowtowing to the government.

  • 10:16:14

    POPADIUKAnd so the political leadership had sway over this kind of populous. You saw this break in 2004 with the Orange Revolution where the people rose up against a fraudulent election and there was a rerun in which President Yushchenko won and carried the banner of the Orange Revolution into a new administration. This, for the first time, gave the Ukrainian people a sense that they do have some kind of political power. And what you're seeing right now is the actual exercise of that political power in a democratic fashion of protest into the government and asking for changes.

  • 10:16:45

    POPADIUKNow, what does this underscore? It underscores two key elements that have characterized Ukraine in the past few years. Number one is the tendency of the people to want a better life. There was always expectation that when Ukraine became independent, it was the one republic that had the greatest chance of succeeding economically, that the prosperity would be great because its industrial base, the talent of its people, et cetera.

  • 10:17:12

    POPADIUKOn the other hand, it also reflects the frustration that the people have had with the government, where the government had a political leadership that was always self-aggrandizing in terms of political power and economic power. And when President Yanukovych turned his back on the E.U., it just ignited these two frustrations.

  • 10:17:32

    POPADIUKThe E.U. agreement was seen by many Ukrainian people of the new generation -- and this is key -- that is something that the new generation was looking at. This new generation of Ukrainian people -- the young people saw the E.U. as their ticket to economic success, and also the creation of a system of justice and rules and procedures that the E.U. would help endorse in their own country.

  • 10:17:59

    POPADIUKYanukovych's turning back on this E.U. agreement just brought these frustrations to the culmination. And that's why you have all the people in the streets right now. It's a new generation of people in the streets, the young people. You're seeing the students out there. Not to say there weren't young people in 2004, but you have a whole new generation that is growing up under Ukrainian umbrella of Ukrainian nationhood. And they want to develop their own country in a free and democratic manner, and this is what you see today in the streets.

  • 10:18:29

    PAGENow we're going to take a short break. And when we come back, we're going to go to Andrei Sitov and ask him what the Russian perspective is on what's happening in Ukraine. We're going to take your calls and questions. You can call us, 1-800-433-8850. Shoot us an email. Find us on Facebook or Twitter. Stay with us.

  • 10:18:54

    PAGEWelcome back. I'm Susan Page of USA Today sitting in for Diane Rehm. We're talking about the unrest in Ukraine and what's next. Joining us by phone from his office in Washington, D.C. is Roman Popadiuk. He served as the first U.S. ambassador to Ukraine under President George H.W. Bush. In the studio with us, Steve Pifer. He's a senior fellow at the Brookings Institution.

  • 10:19:12

    PAGEHe served as a U.S. ambassador to Ukraine in the Clinton Administration. Also Anders Aslund, he's a senior fellow at the Peterson Institute for International Economics. And Andrei Sitov, Washington bureau chief for Tass news agency of Russia. So, Andrei, let me turn to you.

  • 10:19:30

    PAGEWhat is the view from Moscow of what is happening in Ukraine?

  • 10:19:35

    SITOVSusan, it's a pleasure to be with you this morning. I definitely cannot speak for Russia. I'm just a journalist -- the Russian journalist who's been based in D.C. for the past 18 years. So the perspective I want to share is more probably of a Russian view from Washington. And when I look at it this way, the first thing that I -- I'm seeing it in much less dramatic terms than what you've been hearing. I think it's a democracy in action. And, like with any democratic action, the outcome is unclear.

  • 10:20:13

    SITOVWhen recently we've had a confrontation between the White House and the Congress here in Washington, D.C., we were all told by U.S. officials that democracy is messy, that this is how it works. And I think this is exactly the same thing. Democracy is messy. People have different opinions. People in a democracy have a right to express their opinions. And the Ukrainians are doing exactly that.

  • 10:20:44

    SITOVBut what I'm saying also, and what I'm thinking about, is that the Yanukovych government was democratically elected. Nobody ever disputed that. It's a democratic government that is in power by the will of the people. And I'm pretty sure that it has the will of the people, probably the majority, in my opinion. I don't know. But in my opinion, it still has probably the majority of the people behind it. It's what the Republicans in this town used to call the silent majority. Thank you.

  • 10:21:19

    PAGESo, Steve Pifer, is that how it looks to you? We're making too much of this? It's democracy in action?

  • 10:21:24

    PIFERWell, I think it's democracy in action, but it is an important point for Ukraine. And what you're seeing is this manifestation of support for joining Europe which, for many Ukrainians, offers not only better living standards but the idea of rule of law, sort of a bureaucratic normalcy where they don't have to worry about arbitrary government decisions.

  • 10:21:41

    PIFERAnd it's been bolstered because the Yanukovych Administration made a very bad miscalculation on Nov. 30 when they sent in the riot police to break up the demonstration and, in the course of several hours, bloodied more people than were bloodied during three weeks of the Orange Revolution. And you see this large pushback now from the Ukrainian population against that use of force.

  • 10:22:01

    PAGEDo you think that the government there continues to have the support of a majority of Ukrainians?

  • 10:22:06

    PIFERNot on this question. I mean, I think the most polls have shown for the last couple of months, that over 50 percent of the Ukrainians support drawing closer to the European Union, support the association agreement, and you see hundreds of thousands of people out there arguing or demonstrating for the European Union. There's nobody out there demonstrating for turning towards the Russian-led customs union.

  • 10:22:25

    PAGEAnders.

  • 10:22:26

    ASLUNDYeah, I see quite different from what Andrei said here. I look upon this as a fight between democracy and dictatorship where President Yanukovych -- it's true that he was democratically elected, but there hasn't been much that has been democratic after that. The October 2010 parliamentary elections were completely rigged. Even so, the opposition managed to get 50 percent in the proportion part of the election while Yanukovych party only got 30 percent. The latest good opinion poll showed that he would get 17 percent.

  • 10:23:05

    PAGESeventeen, 1-7?

  • 10:23:06

    ASLUNDOne-seven in presidential election held a month ago while Vitali Klitschko, the now strongest opposition leader, would get about 20 percent more in a runoff with Victor Yanukovych. So what he has been doing is to concentrate all power into the hands of himself and his family and also old wealth. So therefore he has now turned virtually all the old big business men against him.

  • 10:23:38

    PAGEAndrei.

  • 10:23:38

    SITOVAgain, from my vantage point of a Russian journalist in Washington, D.C., I would remind you about the opinion polls in America saying that the popularity of American presidents is often down there in the 30s or the 40s. And nobody every disputes the right of the president to fulfill his executive power to the best that the -- to the fullest that the constitution provides. And the popularity of the U.S. Congress is normally in single digits as we also know.

  • 10:24:18

    SITOVOne other point I want to make, which goes to the heart of the matter, a note to the Russian. I was asked about the Russian position, and I will probably have a chance to expand on it a little later. But one point I want to make right now is that it's very dubious where they're actually signing that agreement with the E.U. would actually improve the life of the Ukrainians. And I think the Ukrainians -- I know a lot of Ukrainians. They're my friends. I love the country and the nation and my friends there.

  • 10:24:52

    SITOVAnd they drive very hard bargains even individually, not only as a nation. And they look at it, and they understand that maybe there is a promise there, yes. Nobody denies that. And they are entitled to a promise and to a hope. But immediately, their lives would probably be very much harder because Ukraine is simply economically not prepared to be as open as it is even now, much less so to be more open than now. And that is basically the biggest bone of contention with the plans from the Russians. Thank you.

  • 10:25:29

    PAGEWell, Anders, it is the economic crisis that has fueled this protest. Would an ordinary Ukrainian person be -- citizen be better off if this deal was signed with the E.U.?

  • 10:25:40

    ASLUNDAbsolutely. This would very much change the economic preconditions for Ukraine. It would open up the vast European market that is 10 times larger than the Russian market to Ukrainian exporters in quite a new way. Assessments say that Ukrainian GDP would increase by 12 percent if the agreement was signed, but decline by 4 percent if Ukraine joined the customs union. But it's also that it would reform the Ukrainian state. And that's what President Yanukovych does not want because he does not want the rule of law which would lead to his freedom of action.

  • 10:26:24

    PAGESteve.

  • 10:26:24

    PIFERYeah -- no, I would just add to that and say I think Anders is exactly right. The association agreement might cause some near-term dislocation in the short term. But in the long term, the advantages for the Ukrainian economy are huge. But moreover, you know, the association agreement, it's a huge -- it's hundreds of pages. And it's not just about economics. It's about bringing Ukraine closer to European norms across the board.

  • 10:26:45

    PIFERAnd I've heard European officials say that if Ukraine implemented the association agreement -- and that's a big important question. Mr. Yanukovych may want to sign it, but I don't think he has a full understanding what implementation acquires. But if Ukraine did implement it, it would be more ready to join the European Union than countries such as Romania, Bulgaria were back seven years ago.

  • 10:27:05

    PAGERoman, just to go back to a question that David Herszenhorn raised during our previous conversation, what do you think about the diplomacy of the U.S. ambassador and the assistant secretary of state going to the square, distributing bread both to the protestors and to the police? Did that -- does that seem to you to be a smart thing for them to have done?

  • 10:27:25

    POPADIUKWell, I think it was a very smart thing for them to do. You have to realize that we, as a nation, support rule of law. We support human rights, and we support the right of people to freedom of speech and democratic processes. And they weren't doing anything more than being -- acting in that vein. You have to realize that as one of our earlier people had mentioned that there had been movement by the security forces against the demonstrators.

  • 10:27:56

    POPADIUKAnd this kind of act on the part of our ambassadors as well as our assistant secretary of state to go visit with them in the case the support against the type of violence that might've been taking place against these demonstrators -- and so I think it was a good sign to the Yanukovych government, as well as to the people of Ukraine, that we support their aspirations, but we support those aspirations to be carried out in a peaceful manner and through a process of dialogue.

  • 10:28:20

    PAGEAndrei, you're shaking your head. Did you think it was provocative?

  • 10:28:22

    SITOVI'm shaking my hands because it does seem to me to be very provocative. I think that, frankly, it looks to me as if the Western instigators of these events -- and those are not even mostly Americans. Those are probably mostly the Swedes and the Poles who do not seem to be able to overcome the old Poltava Battle with their rations over Ukraine.

  • 10:28:55

    SITOVI wanted to ask Anders, as an economist, what is the level of taxation in Sweden at this point? And would the Swedes be willing to increase that by at least, I don't know, 1 percentage point to provide for the Ukrainians? Because the Ukrainians, again, they want a better life for themselves, which is understandable. And they are looking for support, as was mentioned by David in his very, I think, cogent and reasonable explanation of what is happening on the ground.

  • 10:29:28

    SITOVThey are turning anywhere. So if that's not such an expensive deal for the E.U. or Sweden or whoever, why don't you put your money where your mouth is and then give them the billions of dollars that they ask? So, in that sense, it is an economic situation. But I also agree that it's not just economics. But, for me, what is transcendent in this situation, what is above economics is geography and blood. Blood is thicker than water, and we are blood brothers with the Ukrainians. And we will always be that way.

  • 10:30:12

    ASLUNDWell, it's true that Sweden and Poland have started this Eastern partnership. And, of course, geography matters that Sweden and Poland are close to these countries. Sweden is a major bilateral donor to Ukraine today. And then I'd say it's the biggest part -- it's possibly the biggest today. Sweden gives 1 percent of GDP in foreign aid each year. So the Swedes are more than happy to provide the Ukraine with more assistance. And the tax burden in Ukraine is just, like, below the tax burden in Sweden. So Sweden would be happy to provide more money to Ukraine.

  • 10:30:55

    SITOVI'm glad to hear that.

  • 10:30:57

    PIFERAndrei, let me come back to your comment about Western instigators of what's going on in Ukraine now because I think that reflects a fundamental lack of Russian understanding about what's happened in Ukraine, just as it did back in 2004 during the Orange Revolution. You know, they're not mysterious outside forces driving this.

  • 10:31:13

    PIFERThis is a manifestation of the Ukrainian people who wanted to draw closer to Europe, saw that plan frustrated, and came out. I mean, the West is not capable of motivating this kind of demonstration. And when Russians say that, I worry because it means that Russians really lack an understanding of what's going on in Ukraine.

  • 10:31:31

    PAGEI'm Susan Page, and you're listening to "The Diane Rehm Show." We're taking your calls. 1-800-433-8850 is our toll-free line. Let's go to the phones and let a listener join our conversation. We'll go to Daria calling us from East Lansing, Mich. Daria, you're on the phone.

  • 10:31:48

    DARIAThank you. Good morning. I would like to hear some discussion from the Russian representative about the importance Ukraine has to Russia economically. It has always been very important for Russia to dominate Ukraine. And even Lenin said, for the Bolsheviks to lose Ukraine would be like losing the Soviet Union would be losing its head. So, you know, it's not like just America and Canada. But I don't know how Russia could really survive without Ukraine with its land and its industry.

  • 10:32:19

    PAGEAll right. Daria, thank you so much for your call.

  • 10:32:22

    SITOVVery briefly, the Russians seemed to survive without Ukraine after the breakup of the Soviet Union. It seems to be the opposite. The Ukrainians need the Russian energy resources to survive. But I agree. We need each other. I do agree, except that I do not remember the quote from Lenin. I more remember more the quote from Brzezinski, another American pundit who always maintained that if we take Ukraine away from Russia, then we "resolve the Russian problem."

  • 10:33:00

    SITOVAnd in that sense, Steven, that is an answer to your question. I understand that. I mean, specifically, to say that something like this could be instigated from my brother is wrong. I agree with that. And Russia does not have that power either, contrary to what we've been discussing about the Russian influence on Ukraine. The Ukrainians will take their own decisions.

  • 10:33:25

    SITOVBut in terms of a civilizational choice, in terms of what Anders has been describing for us as the, like, fight between the good and the evil, I do not agree with that at all. Americans know that all governments are part good and part evil. And this is also a part of the democracy -- a part of a solution and part of a problem. And this is also a part of a democracy that every nation has to resolve for itself.

  • 10:33:58

    PAGEAnders.

  • 10:33:59

    ASLUNDYeah. Let me answer to the question from Daria. Ukraine receives only 5 percent of Russia's exports while Russia receives one-quarter of Ukraine's exports. So the short of it, approximately as Andrei said, for Russia, Ukraine is important for geopolitical reasons. For Ukraine, Russia is important for economic reasons.

  • 10:34:23

    PAGEAnd what about for the United States, Roman? What's at stake for the United States in this struggle?

  • 10:34:30

    POPADIUKWell, for the United States, what's at stake is the creation of a stable democratic society, a nation that would be able to be part of the broader global economy in terms of trade, in terms of stabilizing the region as well. But, Susan, if you permit, I'd like to give my comments regarding Daria's question in a broader context to what your previous two speakers just mentioned.

  • 10:34:54

    POPADIUKThe current situation, Ukraine has two impacts -- or potential impacts on Russia. Given the way the Russian-Ukrainian relationship has been over the centuries, one of the things that can result very well is through a formal breakup, let's say, of that relationship is that Russia's tendency toward being an imperial and nationalist power in the region would be broken.

  • 10:35:21

    POPADIUKIn other words, the psychological bond for Russia to control Ukraine or establish Ukraine in its orbit will be broken if Ukraine can move toward Western Europe and become a more viable state in its own right. That in itself will help the Russians to a great extent because Russia can then concentrate its own political economic forces on its internal development to a great extent.

  • 10:35:43

    POPADIUKAnd I think in the current context right now, some things that Putin may be concerned about is not only the geopolitical split of Ukraine away from the Russian orbit, but equally important is the example that the Ukrainian uprising -- democratic uprising can give to the people in Russia. As you know, there's a nation democratic movement in Russia against Putin's rule against the authoritarian structures that exists in that country. And a successful Ukrainian uprising and move toward the West can be very appealing to those forces in Russia.

  • 10:36:24

    PAGENow we're going to take another short break. And when we come back, we'll continue our conversation. We'll keep taking your calls. Stay with us.

  • 10:37:18

    PAGEWe have a caller who I believe is Ukrainian. Hanna, you're joining us from Pittsburgh, Pa. Is that correct?

  • 10:37:25

    HANNAYes.

  • 10:37:26

    PAGEPlease tell me your question or comment.

  • 10:37:29

    HANNAMy question is about Crimea. So, as you probably know, the president of Ukraine are trying to bring more troops specifically from this region. And two nights ago -- when this was on my (word?) -- the first regiment to pull out of the area actually was that regiment from Crimea. Now they're bringing troops -- regular troops.

  • 10:38:00

    HANNAI wonder if this region would be so involved in the conflict, what could it mean for Crimea who are now supporting Ukraine and their (unintelligible) principle to Ukrainian on their protests? So, long time ago, people were afraid that situation could be radicalized because it was always a fear of Islamists, terrorists coming to Crimea, et cetera, et cetera. Or does anyone have anything to say about this?

  • 10:38:45

    PAGEHanna, before we turn to our panel -- and I think Steve Pifer may have some response for you -- let me ask you. Do you still have family in Ukraine? And are you in touch with them through these protests?

  • 10:38:54

    HANNAYes.

  • 10:38:56

    PAGEAnd what do they tell you about what's going on there?

  • 10:38:59

    HANNAActually, it's not about economics because the Ukrainian people are very patient. If there is no (word?), there is no money. They have, you know, just dig in the soil and planting vegetables and raising chickens like my parents. But it's mostly about corruption. And I think the question is not about anti-Russian or pro-Russian. It's about anti-corruption.

  • 10:39:31

    PAGEIsn't that interesting. And do your...

  • 10:39:32

    PAGE…parents who are there, and other family members, are they supporting the protestors? Do they hope they succeed? Are they behind them?

  • 10:39:38

    HANNAIn both so-called revolution, we have different parts of the family supporting different signs. I have relatives in Moscow. I have relatives in Western Ukraine. My family lives in the south in Ukraine. So -- but what I know, that people have just had enough.

  • 10:40:01

    PAGEI see. Well, thank you so much for your call and your perspective. And let me turn your question over to Steve Pifer.

  • 10:40:06

    PIFERWell, I think this gets to a point where, you know, my sense is for a lot of Ukrainians wanting to draw closer to the European Union is not necessarily seen by them as anti-Russian. I think Ukrainians would like to be in a situation where they can draw closer to the European Union and still have a stable constructive relationship with Russia. And that's a sensible course. Ukraines should not have to make an either-or choice.

  • 10:40:29

    PIFERBut Moscow, increasingly over the last year, seems to be saying it is either-or. It's the Russians who've implied trade sanctions against Ukraine, basically saying that if you go down the route of the association agreement, there will be economic pain. Moscow sees this very much in geopolitical terms and is basically creating a situation where they're saying to Ukraine, you can't have both.

  • 10:40:52

    SITOVThis is not entirely true, Steven. As you surely know, the Russian position on this issue is simply economic, that if, again, Ukraine opens it up for the E.U., we have basically an open border between our nations, and that means that the flow of goods and services from Europe, which are probably of higher quality -- maybe sometimes even more inexpensive -- would flood the Russian market with obvious repercussions for the Russian economy.

  • 10:41:26

    SITOVThe Russians regard their own measures as purely defensive. But what I wanted to respond to mostly in this instance was this idea that the Russians are, again, dictating something -- first off, like we have been discussing without mentioning the facts, since the breakup of the Soviet Union, the Russians have basically been subsidizing Ukraine with other post-Soviet nations if not with anything else, then with cheap energy.

  • 10:42:02

    SITOVAnd by Russian estimates, the costs run to billions of dollars a year. But in this situation right now, the Ukrainians have been asking their European friends to talk with them about this whole situation in a trilateral format. They say, OK, we can't seem to come to an agreement. Let's talk together. Let's talk, you, us, and the Russians. And the Russians -- I asked yesterday.

  • 10:42:38

    SITOVThere was a first deputy prime minister of the Russian government in Washington, D.C. And I asked him about that. And he said, yes, we can talk in any format. For us, what is important is that the situation is resolved peacefully. But the Europeans say, no. They don't want this. And, frankly, again, I think I know why because this…

  • 10:43:04

    PAGEWell, why do you think…

  • 10:43:04

    SITOVRussia has no role there for the Europeans. The whole point, as we've just heard from Steven and from Anders, is the whole point is to prying Ukraine away from Russia, supposedly away from the dismal past into the bright future, which I definitely am very skeptical about.

  • 10:43:32

    PAGELet me give Steven a quick chance to respond.

  • 10:43:34

    PIFERYeah, a couple points. Andrei, first of all, you know, I think it's a mistake to look at this in geopolitical terms. Look at it with what the Ukrainian people want. And what you're seeing from opinion polls, and what you're seeing from all of the people out in the streets is Ukraine wants to move towards Europe, or a majority of Ukrainians want to move toward Europe. And again, nobody's demonstrating, not even in Crimea. There's no demonstrations out there saying we ought to join the Customs Union. A second point on cheap energy…

  • 10:43:59

    PAGEThe Customs Union being the Russian -- yes.

  • 10:44:00

    PIFERThe Russian alternative to the European Union. There's nobody out there. I mean, there's no alternate narrative out there saying, this is better than Europe is offering us. And at last, cheap energy, Ukraine today pays probably close to the highest price of any European country for energy from Russia for gas even though Ukraine is right on the border and, with transportation costs, should be getting a cheaper price.

  • 10:44:24

    PAGEAnders?

  • 10:44:25

    ASLUNDYeah. And let me look up on how this protest has developed. I would say that it has moved in three phases. First, it was all about the European agreement. And the essence was European values, rule of law, democracy, and corruption. And then a second wave, then it was protests again the violence that President Yanukovych had unleashed.

  • 10:44:49

    ASLUNDAnd then the third is now a call for Yanukovych to go, that we have heard from all the opposition leaders. So what we don't hear at all is any anti-Russian slogans. And we don't hear anything at all about economic policy, all of the economic policies offered.

  • 10:45:10

    PAGEWell, Roman, what do you think? Will Yanukovych resign if that's the third stage of this series of protests? Do you think that is a possibility?

  • 10:45:19

    POPADIUKWell, anything is possible, Susan. I wouldn't want to try to guess on what the situation will be, but let me return that, but pick up on two points that were just mentioned earlier. One on energy. It's quite right that Ukraine depends on Russian gas supplies for its energy needs, but you also have to realize that Ukraine has been trying to develop its own independent sources of energy in two ways. It's been looking at offshore drilling, and it's also been looking at the shale gas reserves that have been recently discovered in the country. So it is moving toward energy independence.

  • 10:45:56

    POPADIUKIn the greater context, you know, we speak about the geopolitics and all. And I think it's important to emphasize that Ukraine's movement toward Western Europe or desire to have good ties with Western Europe and to join the association agreement is not at the expense of Russia. Ukraine will and should have good relations with all its neighbors, including Russia. So I don't think it's an either-or type of situation. It's unfortunate that a lot of people see that.

  • 10:46:24

    POPADIUKThis is a choice by the Ukrainian people, democratic choice, to have an association with Western Europe, where their future can be brighter, in terms of economics, as well as politics. But that doesn't necessarily mean that they do not want to have good, close relations with Russia. And I think that's important to understand this context is not an either-or situation. In terms of Yanukovych, I think his options are starting to become very limited this stage of the game, Susan. No one knows what the next step will be.

  • 10:46:53

    POPADIUKAnd I wouldn't want to fathom a guess as to that because there's so many permutations that can be taken down the diplomatic road. But I think his options are becoming fewer and fewer. The forces in the streets seem to have gained a lot of ground. They're getting good international support, both from the E.U. and the United States. And so he's getting boxed into a corner in terms of what his options may be at this stage of the game.

  • 10:47:18

    PAGESteve, do you agree with that? What are his options?

  • 10:47:20

    PIFERYeah. I think Yanukovych's options over the last several weeks have become much more limited in part because of miscalculations that he's made. You know, first of all, given the strength of opinion in the demonstrations, it's very, very hard for me to see him turning now back towards Moscow's Customs Union.

  • 10:47:35

    PIFERHe'd have a million people out in the streets on Sunday if he did that. Second, the backlash against use of force on Nov. 30, I think, has made it very clear that use of force by the government potentially could again bring many more people out in the streets. So his options are becoming limited.

  • 10:47:51

    PAGESo what are his options? His options are to sign the deal with the E.U., to fold, to go back to what he had originally said he would do or…

  • 10:47:57

    PIFERWell, I think, first and foremost, he's got to deal with the political crisis.

  • 10:48:00

    PAGEYes.

  • 10:48:00

    PIFERAnd there's been talk now for several days of a political round table. Yesterday, Mr. Yanukovych said he was prepared to take part in that. And I think that ought to be tested.

  • 10:48:10

    PAGESo to meet with the opposition.

  • 10:48:13

    PIFERMeet with the opposition, meet with leaders of civil society, and begin a dialogue to see if they can get out of this stalemate. That's going to be a very hard thing for Mr. Yanukovych to do because his makeup is not well disposed to political compromise, but he's going to have to take some compromise steps if he's going to find a way out.

  • 10:48:28

    POPADIUKAnother problem, Susan, that he's going to face as he moves toward signing an E.U. agreement and if the agreement is signed, his political options have become smaller because for the simple reason he cannot take credit for having initiated that E.U. agreement. So when he goes into the next election, if there -- I know he cannot take credit for anything of this nature. So his options are being limited both in a movement toward the E.U. and in terms of precluding any movement toward Russia. And so I think the solution is going to have to work out through a dialogue, just as Steve mentioned.

  • 10:49:05

    PIFERAnd many of Yanukovych's advisors reportedly were telling him, sign the association agreement, don't worry about implementation, but sign it because then you can campaign in 2015 as the man who brought Ukraine into Europe. He's losing that now.

  • 10:49:19

    PAGEAll politics is local perhaps. Anders?

  • 10:49:21

    ASLUNDYeah, basically I see only two alternative scenarios. One is where Yanukovych goes, but the round table is set up essentially to negotiate how he leaves and how new parliamentary and presidential elections will take place. And the other is that Yanukovych manages to wear out the opposition with hard repression. So the slower the process is and the more violent it is, the better for Yanukovych.

  • 10:49:52

    PAGEI'm Susan Page, and you're listening to "The Diane Rehm Show." We're going to go back to the phones. Let's talk to Leon who's calling us from Boston. Leon, thank you for holding on.

  • 10:50:03

    LEONThank you for taking my call. I just want to mention I live in America, and I'm American for 20 years. But my brother is Ukrainian. He lives -- well, he's Russian but lives in Eastern Ukraine. And I talk to him a lot. And I just cannot understand how it's even possible for Ukraine at this moment to join E.U. basically for political reason because Ukraine is split 50/50 and Yanukovych and parliament is democratically-elected government, like them or not.

  • 10:50:33

    LEONBut if they go to E.U., their monetary fund require Ukraine to go very strict austerity per politic for savings. They will cut pension -- Russia -- because it depends on essentially totalitarian state where the economics and politics go together -- they'll stop buying Ukrainian products, as we already mentioned on this program. And unemployment will skyrocket, and the government will be kicked out of office.

  • 10:51:05

    PAGEAll right. Leon, I want to turn to our panel with that question. But since you have your brother there, a Russian living on Ukrainian side of the border, what is his view of these protests in the Square? What does he think about them?

  • 10:51:15

    LEONI think it's just the two countries that are joined together. They're 50/50 split. And the economy, all the industrial part is on the East and agriculture part on the West. And West is basically leaving a lot of going for the cheap workers outside to E.U. and working there and coming money back and agriculture, versus East, which is industrial and depends completely on Russian to buy their product.

  • 10:51:47

    PAGEAll right. Leon, thank you. Thank you so much for your call. What do you think about that, Anders, about the austerity measures the IMF would demand if the Ukraine signs that agreement?

  • 10:51:55

    ASLUNDWell, Ukraine today has about a deficit of 8 percent of GDP, which is totally nonsustainable. And most of this budget deficit goes to the so-called Yanukovych family. So these people are simply indulging in larceny. And many of these extortions in the -- distortions in the economy are caused by them, for example, very different gas prices moving from an eight times difference. And then some people buy cheaply and sell expensively. And this is essentially at state expense. So this has to be sorted out.

  • 10:52:37

    ASLUNDThe IMF demands simply elementary economics. The Ukrainian economy is now, under these policies, declining by over 1 percent this year because people are not allowed to develop enterprises if they're outside of the Yanukovych family. What will happen is that Ukraine's exports to Europe will boom exactly as we have seen in Georgia and Moldova after they were subject to massive Russian trade sanctions. So these trade sanctions are really Russia's problem that it pursues policies so that nobody can cooperate easily with Russia.

  • 10:53:14

    PAGEAndrei, we're almost out of time. I'll give you the last word.

  • 10:53:16

    SITOVThank you. My point is really simple. I do not believe in IMF solutions because I've observed them over the years in regards to Russia, in regards to other countries in economic distress, including Ukraine at this point, and also to the United States in economic distress, and to the European Union in economic distress. And I saw that the recipes were quite different. And I can assure everyone that Ukraine is not welcomed in the European market with open arms.

  • 10:53:49

    PAGEAll right.

  • 10:53:51

    SITOVI'm simply confident of that. Thanks.

  • 10:53:53

    PAGEA very provocative discussion. My thanks to everyone who joined us. Roman Popadiuk, Steve Pifer, Andrei Sitov, Anders Aslund, thank you for being with us on this hour of "The Diane Rehm Show."

  • 10:54:05

    POPADIUKThank you, Susan.

  • 10:54:05

    ASLUNDThank you.

  • 10:54:06

    PAGEI'm Susan Page of USA Today sitting in for Diane Rehm. Thanks for listening.

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