Ukraine

Baroness Morgan of Ely Excerpts

Tuesday 18th March 2014 Lords Chamber

[Baroness Morgan of Ely (Lab)]

I thank the Minister for her initial presentation and other noble Lords for their interesting contributions this afternoon.

Both Russia and the West have found themselves trapped in a position that I believe neither of them wanted to be in. The trick now is to find a way of containing the situation, de-escalating an extremely serious situation in Ukraine and sending a clear and unequivocal message to Russia that annexation in this manner is unacceptable. In this, the Government have our full support.

The question that we need to ask ourselves is how we got into this situation, and why Russia is behaving in a way that will clearly have consequences for it in the international community. Many commentators have argued that we should not be too surprised by Putin’s approach to events in Ukraine; after all, he established his political position in his 2007 Munich speech, when he called the dissolution of the Soviet Union the greatest catastrophe of the 20th century. Russia is still coming to terms with the loss of the USSR—the old Russian empire, as the noble Lord, Lord Cormack, said. The potential development of a free-market, democratic Ukraine, especially one integrated into western economic and security structures, is perceived as a real threat. Many Russians have never accepted that Ukraine is truly separate from Russia.

“Ukraine is not even a state”,

Putin told George Bush in 2008. He said that part of its territories were,

“in Eastern Europe, but the greater part is gift from us”.

Russia has reacted aggressively to the demands of the Ukrainian people, who set their face against a Russian plan to develop a Eurasian union in favour of a trade relationship with the EU, effectively killing Putin’s plan for a new trade area. Russia was concerned that rapprochement with Europe would mean, ultimately, that Ukraine would join NATO, and has always been keen to maintain a buffer zone of sympathetic countries on its borders. As the noble Lord, Lord Kerr, indicated, that offer to join NATO was never on the table. Let us not forget that the Kremlin was also concerned about losing its military base in Crimea, and that a successful revolution on its border might encourage opposition groups within Russia itself, particularly after the protests witnessed there in 2012. It has proved to be a very popular move within Russia, with 70% support for its actions in the Crimea.

We should not lose sight of the economic situation facing Russia at this time. Russia’s economy is already in a de facto recession with a drop in investment, a rapid decline in consumer demand and a real terms decrease in incomes. The economy has already shrunk for two consecutive quarters. The rouble is weakening, causing expectations of growth in inflation. Russia’s Ministry of Economic Development has revised downwards its short-term forecasts on an almost monthly basis, so Russia was, and is, in a touch of economic trouble and could be looking for an outside distraction. This strategy worked well for Putin during the upheaval in Chechnya, which boosted his popularity in Russia. However, Russia should be extremely careful in the risks it is taking and the West needs to send a strong message to Moscow that there will be costs and consequences to Russia for this action.

Despite all this, it is right to acknowledge that the crisis did not start because of President Putin. Russia is responding to the situation in Ukraine rather than having a master plan that provoked the current crisis. However, it is also true to say that, rather than helping to resolve the crisis, Russia has sought to exploit and inflame existing ethnic, linguistic and geographic fault lines within Ukrainian society.

The West’s response has been cautious despite Russia’s actions having broken a whole raft of international treaties. The massive increase in the number of troops in Ukraine violates the charter of the UN, the Helsinki Final Act, the Budapest memorandum of 1994 and the Russia-Ukraine agreement on military bases.

Ultimately, however, we need a stable situation on the border of the EU and nobody wants to see a military solution to this situation. It is, however, in our interest to ensure that stable, free democratic countries flourish in Europe. Russia, through its actions, has now entirely isolated itself from the international community on this issue. I particularly welcome the abstention by China from the UN vote on the illegitimacy of the referendum in Crimea at the weekend. This really demonstrates to Russia that it is friendless in pursuit of its policies in Crimea. However, an isolated Russia in the long term is in nobody’s interest. We have a moral responsibility to help Ukraine. It is worth heeding the words of Ukraine’s Prime Minister, Arseniy Yatsenyuk, even if, as my noble friend indicated, some of the guarantees are perceived rather than real. Arseniy Yatsenyuk said:

“A country which willingly gave up its nuclear arsenal … and received guarantees from the world’s leading countries, finds itself unprotected, one-on-one with a country which is armed to its teeth. If you do not uphold these guarantees … then explain how you will convince Iran and North Korea to give up their nuclear status”.

Events in eastern Ukraine over the past couple of days are potentially more dangerous than the situation in Crimea. In Crimea, Russian troops are present under a long-standing agreement, although they have gone way beyond the agreed remit. However, if Russian forces keep pushing into eastern Ukraine, it becomes unambiguously an invasion. The killing of a Ukrainian officer in an attack on a base in Crimea, reported this afternoon, is an ominous step in the wrong direction.

We need to support a graduated hierarchy of diplomatic and economic measures against Russia. Already, as we have heard, the EU has agreed to suspend the Russian visa liberalisation programme and has pulled out of Sochi G8 preparation meetings. European Union member states have agreed the wording of sanctions on Russia, including travel restrictions and asset freezes against those responsible for violating the sovereignty of Ukraine—but, disappointingly, only 21 of them. We need to know from the Government whether, at the EU Council on Thursday and Friday of this week, the UK Government will urge the cancellation of the EU-Russia summit scheduled for June. I ask the Minister for clarification on whether the Government are looking to suspend Russia from the G8 group.

Russia now really understands that it is an integrated part of the world market and cannot isolate itself from the rest of the world. This should have been heard loud and clear in Moscow on 3 March when Russia’s stock market plummeted by 12% and the rouble fell by 1.9% against the dollar, in spite of massive intervention by Russia’s central bank—although they have risen since. There will inevitably be a knock-on effect in terms of a decline in investment due to both the increased cost of borrowing in Russia and the further alienation of investors.

Russia needs Europe. Exporting natural gas to Europe is big money for Russia; it accounts for a fifth of its total earnings, some £60 billion a year. Sanctions on that will hurt. Nobody is suggesting that Europe can switch gas suppliers overnight but, over the medium to long term, the EU simply cannot risk more than 30% of its supplies coming from such a politically unstable source. For a decade, Europe has been aware of this vulnerable overdependence on Russia but has not moved fast enough to look to alternative markets. To be fair, the alternative options were not evident before, but shale gas from the US could provide a medium-term solution to Europe and cause a problem to the Russians. It cannot happen overnight but the Russians must be aware that they are playing a dangerous game with their largest customers, and the US must be prepared to open its gas market to the world if it is serious about helping Europe in response to the Russian situation.

There will be a cost to Europe as well, and Britain and the West will need to decide whether we are serious about standing up to this bully and whether we are prepared to take the economic hit to make our point. I regret that, to date, the EU’s unity in condemning Russia’s military aggression has not been matched by a shared resolve to act more decisively in extracting costs and consequences for this action. I hope that the European Council next week will consider expanding the list of Ukrainian and Russian officials who will be subject to targeted measures if Russia does not indicate a change of course. President Putin may believe that sanctions will not last, as was the case after the Georgian war of 2008, but the West needs to send a clear message that needs to be sustained over the long term. Russia is faced with two alternative futures: greater integration within, or greater isolation from, the existing international order.

However, a strong signal needs to be sent to Ukraine as well. The Ukrainian military needs to be commended on its calm response to the situation so far. Despite considerable efforts to provoke a reaction with increasingly aggressive behaviour in the east of Ukraine by Russian supporters, the military of Ukraine has so far not been provoked into action. Minorities in Ukraine need to be given assurances that they will be protected and that Russian speakers will not suffer discrimination. Legitimate elections need to be overseen by the international community to give credibility to Ukrainian leaders. We need to see an end to rampant corruption in the country and a loosening of the stranglehold that some of the oligarchs have on the place. If Ukraine changes, the West will need to help with technical assistance and significant financial support.

Last weekend’s referendum in Crimea needs to be seen for what it is—an artificial and unfair political construct that has no legitimacy. No campaigning was allowed by Ukrainian supporters, there were no voter lists and, shortly after the referendum was called, Ukrainian TV channels were removed from both terrestrial broadcasts and cable networks in Crimea. Some of them were replaced by Russian stations.

We are in a crisis situation. Russia shows no signs of being cowed by the sanctions that the West has imposed so far. The answer to this problem can clearly not be a military one, but it is in all our interests to try to de-escalate the situation while remaining robust and ensuring that the international community responds together to this frightening situation on our continent. The international community must now do more to encourage Russia to engage in a constructive dialogue, while simultaneously applying greater pressure if President Putin refuses to change course. A combination of deft diplomacy, shared resolve and a unified response are the best ways in which we can de-escalate this dangerous crisis, ultimately reaffirm Ukrainian sovereignty and preserve European security. The Government will have our support in helping to achieve this desired outcome.