Ukraine

Lord Giddens Excerpts

Thursday 3rd April 2014 Grand Committee

[Lord Giddens (Lab)]

My Lords, I congratulate the noble Baroness, Lady Falkner, on having secured this debate. The situation in Ukraine remains extremely dangerous. The prime risk in my estimation is probably not further Russian invasion, although no one can write that off, of course, but a scenario in which events get out of control in ways that no one intended.

For the people of Ukraine, this is a time of hope, yet the problems to be coped with are just awesome. “Hope for the best, but plan for the worst” is the motto adopted by Ukraine’s new Minister for the Economy. It will not be political reform alone but the interaction of political and economic change that will determine which of these outcomes is most likely.

Simon Tilford from the Centre for European Reform has made a telling comparison of the diverging economic fortunes of Poland and Ukraine during the past 20 years. The Polish economy in 1990 was only 20% larger than the Ukrainian economy, but by 2001-02 it was fully three times as big—a quite extraordinary statistic.

I want to argue that three basic structural dilemmas will have to be resolved during the next two or three years in Ukraine if there is to be political and economic stability. First, how will the economic shock effects of the IMF’s reform package be managed politically? That package involves radical public sector reforms, higher oil and gas prices and a swathe of job losses. There will be an awful lot of pain before there is any discernible gain, and somehow that will have to be managed. Secondly, the presidential election is in late May, as the noble Baroness has indicated. How can progress towards democracy be reconciled with technocratic control imposed externally, because that is how it is going to have to be? We have seen from the example of Greece how such a process fosters extremism even in established democratic states, and Ukraine is not, of course, an established democratic state—far from it. Thirdly, devolution from Kiev is certainly necessary, but how will it be achieved without stoking up the forces of separation in areas with a high proportion of Russian speakers?

As noble Lords know, the Russian version of federalism for Ukraine is intended to dismember the country. What role will the UK Government seek to play in helping to resolve these core dilemmas, without which substantial progress in Ukraine is impossible? Does the Minister accept that a more integrated EU foreign policy will be needed in future, going beyond that established in the Lisbon treaty? One of the main things that has changed is that there is now an arc of instability going all the way round from the top of the eastern border of Europe, through the Middle East and north Africa and going below north Africa. That situation was quite unanticipated and is going to involve quite a reorganisation of political leadership on the part of the EU and the US to cope with it. I welcome the Minister’s views on that.