EU and Russia (EUC Report)

Lord Risby Excerpts

Tuesday 24th March 2015 Lords Chamber

[Lord Risby (Con)]

My Lords, I warmly congratulate my noble friend Lord Tugendhat on so effectively presenting this brilliant report—and it is a brilliant report. So many people outside your Lordships’ House have read it and complimented all the work of the committee in producing it. It certainly has been a fantastic read for us all.

For some years, I have been chairman of the British Ukrainian Society, which I now declare. Indeed, one of its directors is my noble friend Lord Oxford, who now brings all his experience and understanding to our deliberations. I warmly congratulate him on such a superb maiden speech.

When the Soviet empire collapsed, the departure and independence of Ukraine were very keenly felt by many Russians. But Ukraine has always aspired to be independent, and that spirit provoked savage reprisals by Stalin. Before the Second World War, Stalin effectively starved to death millions of Ukrainians—the Holodomor. In this Palace of Westminster, we have sought to commemorate this tragedy with artistic and photographic exhibitions. It is certainly an event that has scarred the memories of the people of Ukraine.

Regrettably, since independence, Ukraine has been both ill governed and highly dependent on Russian energy supplies. Russia, in turn, has used energy as a weapon of foreign policy, using differential pricing to influence those whom it favours or dislikes. Therefore, Ukraine has been dependent on Russia not only for energy supplies and transmission but as its major export market. Regrettably, a number of those who have led Ukraine politically since independence acquired massive wealth. Former President Yanukovych, now in exile in Russia, apparently built up a fortune of some $70 billion. His effective removal by outraged Ukrainian citizens following the Maidan demonstrations led to the subsequent invasion by Russia, furious at his departure, of Crimea and the Donbass. Ukraine has perennially been in debt to Russia. Indeed, the failure of President Yanukovych to sign the EU Association Agreement was linked to Ukraine’s debt to Russia, which the agreement did not cover. That is because the EU essentially believed, with some degree of understanding, that any money provided would simply be stolen. And so this president turned to Russia.

It was a key policy of the new Ukrainian Government under President Poroshenko to decentralise authority to the regions of this vast country. But this was not spelled out and acted upon sufficiently when they came into office, which might have pre-empted the rise of separatist sentiment. This still needs to happen, but in a way that does not dismember the country, which appears in some respects to be Russia’s objective. Does the Minister agree that the EU must encourage Ukraine to move forward on this decentralisation process as the opportunity presents itself?

The question we all ask ourselves is this: what is Russia’s objective? It seems quite clear to me, somebody who knows Ukraine very well, that it is to make Ukraine ungovernable and drive away any foreign investment to ensure Russia’s continuing dominance and influence.

The British Ukrainian Society is fully part of a process that is now under way in Vienna. The French philosopher Bernard-Henri Lévy, a hero of the Maidan demonstrations, called for a Marshall plan. In an echo of this, a small group of us, including him and my noble friend Lord Oxford, is helping in this process. It has a degree of support from President Hollande. In a remarkable demonstration of unity, but also of clear necessity, Ukrainian federations of employers and employees have come together to underpin this initiative. Work streams are being set up in such diverse areas as trade, health, EU association, anti-corruption and judicial reform, headed by distinguished Europeans, including from this country and including members of your Lordships’ House, who will analyse rigorously what is necessary to provide a wholly different constitutional and economic climate. We hope that in September we will be able to report on this. Depending on the level of stability in Ukraine, our clear intention is to launch a major reconstruction fund embracing private sector investors. Of course, the role of the IMF and others is crucial, but we are hopeful that the huge opportunities in Ukraine, not least in agriculture and in IT, will be attractive. We have been pleasantly surprised in discussions in Washington at the level of interest not least from those in the United States. Such a fund would help disconnect Ukraine from the massive current economic shadow of Russia which impacts it so directly.

One of the more troubling interplays has been the extent of involvement of politicians there with different business groups which so dominate the economy. I mention this because, in the fullness of time, more competition is crucially needed. However, confiscation, nationalisation or punitive tax rates, advocated by some, are not seen as a wise priority in Kiev in key government circles, although one oligarch in the last day or two, who appears to have had a private army, has challenged the state’s authority in a completely unacceptable way.

As we have heard, the aggressive behaviour of Russia has been well documented. Nevertheless, it is certainly unwise for some to call for NATO membership of Ukraine, which before the current tragedy was never a live issue. That simply gives Russia a self-justifying excuse to continue its aggression.

Ukraine is a European country that deserves much better than it has suffered. As the excellent report of the European Union Committee makes clear, there are potentially practical ways of trying to engage with Russia at a national and EU level while making it absolutely plain that there will be a heavy price if this offer is spurned. Yet for all the huge energy and commitment of the current Ukrainian Government to initiate much needed reforms, ultimately they will have to recognise that, however unpalatable, no country can escape the reality of its geography.