Russian President Vladimir Putin has won an important foreign policy victory with the decision by Ukraine to suspend talks on an association agreement with the European Union. Putin countered the EU offer with threats and blandishments of his own. While Ukrainian officials insist that the door remains open, there is no mistaking Kiev’s decision to cast its lot with Russia.

Association status is the EU’s way of building ties with countries short of membership. The EU negotiates a framework agreement with a third country that typically focuses on economic, trade, political, social or security ties. Free trade agreements with nonmember states are association agreements.

Ukraine first voiced a desire to conclude some sort of association agreement with the EU in 1994, and various negotiations have been held since then. Talks on a free trade agreement began in 2008, and the next year, Ukraine was identified as one of the six post-Soviet states that would join “the Eastern Partnership” with the EU. This concept was intended to provide a framework for discussion of contentious issues without having to join the EU. In addition to facilitating the resolution of these problems, the Eastern Partnership would extend EU influence to the east, and help reorient those former Soviet states to the West, lessening Russian sway over those governments. The Ukraine association agreement was to have been signed at an EU summit this week in Lithuania.

Well aware of European intentions, Moscow has done its best to frustrate those plans. It has proposed a rival trade bloc, imposed trade restrictions on Ukraine and threatened even worse if the deal goes through. The EU has helped Ukraine secure future gas supplies, promised €300 million in annual aid and ensured that $822 million is available via the International Monetary Fund. Ukraine President Viktor Yanukovich has said that that is not enough money to make the deal a winner for his country, however.

According to Yanukovich, the deal would cost Ukraine $500 billion in trade with Russia and the adoption of EU standards would add another $100 billion to the tab.

The EU’s demands for political reform did not help its case. As part of the association deal, the EU sought the release from prison of opposition leader Yulia Tymoshenko. The former prime minister is considered the target of political payback, and her release would be the most tangible sign that Ukraine seeks to reform its political system. (The Ukraine government denies that it has engaged in selective prosecution or that Tymoshenko is treated differently from any other citizen.) It was proposed that Tymoshenko be released on medical leave for treatment abroad for her back problems. Six different versions of legislation designed to free Tymoshenko for medical reasons were defeated by Yanukovich’s party. On Monday, she declared a hunger strike. While Yanukovich insists that the government has not turned its back on the EU and that many of the reforms that would be required are going to occur anyway, the die appears to have been cast. Ukraine will now focus its efforts on reaching a deal with Moscow.

The pressure on Ukraine follows Russian efforts to get Armenia to change course. It too was going to join the free trade agreement with the EU but it abruptly abandoned those plans in September after Armenian President Serzh Sarkisian had an emergency meeting with Putin and days after Russia concluded a multi-billion dollar arms deal with Azerbaijan, Armenian’s rival. There is speculation that Sarkisian changed his mind to avoid losing Russian support in the conflict over Nagorno-Karabakh.

While Georgia and Moldova are still expected to sign agreements with the EU this week in Lithuania, the loss of Ukraine, a country of 46 million people, will be a blow to the EU’s plans to extend its reach eastward. There is speculation that Ukraine is just bargaining. Yanukovich is said to fear Tymoshenko’s re-emergence as a rival in the next presidential campaign. His party’s rejection of her release is, according to this logic, a way to change the terms of the deal.

That is an over-optimistic reading. Putin is strongly opposed to the agreement. His Russia, a great power that seeks to reclaim its superpower status and the respect of the rest of the world, will not abandon its interests in the near abroad, and certainly not in Ukraine, which is considered by many to be the cradle of Russian civilization. There is talk of a joint Ukraine, Russia and EU trade commission that would effectively give Moscow a say over economic relations in Eastern Europe.

There are some lessons to be drawn from these developments. The first is the readiness of the Russians to play hardball and inflict real pain on those nations with which it has serious political disputes. Moscow sees no distinction between economics and politics. Second, the EU is not prepared to play hardball of this nature. If it truly seeks to enlarge its influence, then it must decide which is more important — the expansion of its political influence or the spread of its political systems.

It is not clear if a loosening of demands regarding Tymoshenko would have made a difference, but Brussels did not appear interested in finding out. That is shortsighted thinking in a serious geopolitical contest.

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