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Ukraine corruption seen as key barrier to crisis resolution

Dec. 13, 2013 at 5:54 PM   |   Comments

BRUSSELS, Dec. 13 (UPI) -- EU negotiators say they're hopeful of Ukraine firming ties to Brussels rather than Moscow but independent analysts say nothing is certain.

After Swedish economist Anders Aslund delivered a forensic analysis of organized corruption in high Ukrainian circles, more assessments of the stalemate suggest Ukraine's ruling oligarchy would emerge richer and more powerful if current talks on balancing ties with Moscow and future union with Brussels foundered.

Last month, Ukraine said it was suspending talks with the EU, fearing stronger ties to Western Europe would disrupt its ties to Moscow.

Aslund said the group around Ukrainian President Viktor Yanukovych, called by critics the Familia in an ironic reference to organized crime, is making a fortune from Ukraine's woes.

"Why would any government pursue such a harmful and mindless economic policy? The simple answer is that it benefits the ruling 'family' and its closest friends," Aslund wrote.

"Previously unknown individuals, who are presumed to be connected with people at the top, have taken over a large number of private companies at low prices. The worse the economic situation is, the cheaper Ukrainian companies become for these selected buyers," wrote Aslund, senior fellow at the Peterson Institute for International Economics, Washington, and author of "How Ukraine Became a Market Economy and Democracy."

Aslund's comments appeared in articles written for Foreign Policy magazine and the BBC.

EU foreign policy and security chief Catherine Ashton indicated to reporters Yanukovych intends to sign a trade and cooperation agreement with the EU despite indications to the contrary.

Yanukovych announced in November the deal was off, citing pressure from Moscow to stay within the Russian customs and economic union.

Both EU and Russia have warned Kiev going to the other side will bankrupt the nation.

That may well happen, critics say, but point out that will not be detrimental to the interests of Yanukovych, his family and a close circle of powerful friends.

Despite continuing negotiations, the EU and Ukraine may be drifting apart, EUobserver said.

The EU has said it will give Ukraine more funds if it signs an association deal, but its list of political conditions is getting longer, EUobserver said. It now includes demands for release of all protesters arrested during continuing protests in Kiev.

EU commissioner Stefan Fuele is said to have promised Ukraine extra funds at a news conference in Brussels attended by Ukrainian First Deputy Prime Minister Serhiy Arbuzov.

"The Association Agreement, including a deep and comprehensive free trade area, is our offer to Ukraine and to its people. This offer is still on the table, the European Union remains ready to sign it as soon as the Ukrainian authorities are ready," Fuele told the news conference after the talks, Euronews reported.

Arbuzov told reporters an EU-Ukraine agreement could be signed "very soon."

Analysts say the Ukrainian position appears aimed at negotiating a comfortable understanding with Moscow before striking a deal with Brussels. Russia and Ukraine have major unresolved issues on Ukraine's energy debt and Ukraine's future role in alliances and partnerships sponsored by Moscow and linking former Soviet republics.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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