Ukraine - Falling Prey to Russian Th 17 October 2011 Economic “Colonisation”?

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European issues n°217 Ukraine - Falling Prey to Russian th 17 October 2011 Economic “Colonisation”?

ABSTRACT By Sophie Lambroschini Ukraine’s position in regard to Russia has been shaken further with the conviction of former Prime Minister Yulia Tymoshenko, sentenced to seven years in prison for abuse of power during her appointment as Prime Minister of Ukraine – a decision that was condemned both by Moscow and the European Union. Given that the Kremlin perceives Ukraine as being in Russia’s geopoliti- cal sphere, Ukraine harbours concern over its powerful neighbour’s growing ascendancy in their economic relations – a bilateral tension that has been illustrated by a hardening in tone by both parties, the outcome of which is still uncertain. This study offers an overview of Russian economic influence in Ukraine beyond the customary theme of the gas sector, and attempts to assess its impact on Ukraine and its relations with the European Union.

At the end of August the message was quite proving[3]. The Russian market is the first clear: “It seems to me that we have made a outlet for Ukrainian exports[4]. Ukraine im- clear offer: if you want a gas discount, you ports nearly all of its gas from Russia and must join the integrated zone …: ”[1] Rus- also all of its oil products. Ukrainian eco- sian President Dmitri Medvedev declared im- nomist Vasyl Yurchyshin even believes that patiently. the Ukrainian economy is unduly vulnerable Ukraine finds itself challenged in a relati- with regard to the rouble[5]. According to a vely typical case of tightrope diplomacy in Russian Foreign Ministry think tank, Russian which it usually tries to negotiate its “po- capital is said to control nearly one third of litical” friendship with Russia in exchange the Ukrainian economy[6]. But what is the for “discounts” on the purchase of gas. But significance of this? Kyiv, which has been boosted by its success- The murkiness of shareholder structures, the ful entry into the World Trade Organisation, use of Cyprus-based shell-companies by a 1. http://www.kyivpost.com/ news/business/bus_general/ is hesitating over joining the Russian-Ka- great number of investors in Ukraine, not to detail/112063/#ixzz1bP7IFfod zakh-Belarus Customs Union as requested mention the effective control exercised over

by Russia. Kyiv hopes for the conclusion of businesses makes any estimate extremely 2. http://www.ukrstat.gov.ua/ State Statistics Department, an Association Agreement with the European approximate, resulting in a variety of inter- July 2011 Union, (which includes the Deep and Com- pretations[7]. Opposition parties in Kyiv are prehensive Free Trade Area agreement, the concerned that the Kremlin will implement 3. Blyakha, Nataliya Russian foreign direct investment in DCFTA) which would provide a counterweight a “colonisation” strategy or that it will take Ukraine Turku Pan European to Russian power. European leaders have over control of the Ukrainian economy, with Institute 07/09 pp5-6 warned that Yulia Tymoshenko’s conviction, the aim of cultural, political and economic http://www.tse. fi/FI/yksikot/erillislaitokset/pei/ against the backdrop of a gas import deal subservience, as part of greater geopolitical Pages/default.aspx with Gazprom, could endanger the future of domination.

the association agreement. Moscow believes At the same time Russian investors’ interest 4. http://www.ukrstat.gov.ua/ State Statistics Department, that there are anti-Russian motives behind in Ukraine seems to be in line with an entre- January-July 2011 this conviction. preneurial trend: undoubtedly Ukraine is a

Since Viktor Yanukovych took office as Head naturally attractive market for neighbouring 5. Yurchyshin, 28.09.2010 of the Ukrainian state in January 2010, capital which is in search of new projects and 6. Sergeï Jiltsov, “Rossisko- Russian economic designs in Ukraine have investments that are, in principle, beneficial ukrainskoe sblizhenie ne izmenilo made themselves apparent, both via bila- to both parties. Moreover there are still a prioritetov vneshney politiki Ukrainy”, Nezqvisimaya Gazeta, teral institutional vectors (cooperation and great number of inter-dependent sectors 20 06.09.2010. integration agreements), and also via direct years after Ukraine’s independence.

investments, in terms of which Russia is only After reviewing the situation from an histo- 7. v. Blyakha op. cit. for an estimate in fourth place,[2] but this position is im- ric standpoint, this paper offers an overview

Neighbour States Fondation Robert Schuman / european issues n°217 / 17th october 2011 Ukraine - Falling Prey to Russian Economic “Colonisation”?

of Russian economic influence in Ukraine beyond However, the power stations are fired by Russian the customary theme of the gas sector, in a bid to nuclear fuel (diversification projects are on-going) assess its impact on Ukraine and its relations with including uranium, which is extracted in Ukraine. the European Union. The aircraft manufacturer Antonov assembles its planes in Voronej in Russia, using wings and en- 02 gines manufactured in Ukraine, which are then 1. The Historical Context: a difficult di- exported to Russia. Whilst Ukraine inherited some vorce of the biggest shipyards on the Black Sea, Russia retained the engineers capable of designing ships. The Soviet Legacy: two intertwined and And there are many other, similar examples, ran- interdependent economies ging from aircraft manufacture to arms assembly. Twenty years on, these mutual dependencies have “Losing Ukraine is tantamount to madness” warned not been untangled, and in fact that process was Lenin in 1918 as the Red Army fought to assert even never really started. This explains in part Rus- its power in Ukraine. From Bismarck to Zbigniew sia’s keen interest; since it has not succeeded in Brzezinski, there has been no end to the aphorisms developing these sectors from scratch in Russia, illustrating the imbrication of the two nations. From Russia feels all the more irritated by the close an economic point of view, back in the time of the proximity of its former common property - espe- Russian empire, major Ukrainian sugar industria- cially since the strategy of major Russian industries lists, who were sometimes of Cossack descent, towards vertical integration takes them over the were amongst the wealthiest and formed part of border into Ukraine[8]. the imperial nobility. In the Soviet era the centra- lised economic system provided the Socialist Re- Leonid Kuchma: A quest for Independence but public of Ukraine with a key position in terms of on a Russian lifeline industrial production. In Ukraine, hopes of indepen- dence, which spread across the entire Soviet Union The Presidency of Leonid Kuchma (1995-2004) in the era of Perestroika, were twofold: cultural took economic relations with Russia into an era and political emancipation on the one hand, and on of centralised decision-making. A product of the the other economic freedom from Moscow whose Soviet military-industrial elite, he started political centralizing role was perceived as being exploita- and economic consolidation in order to take control tive. But Kyiv underestimated the extent to which over highly regionalised groups. The import of Rus- Russo-Ukrainian production networks overlapped; sian fuel was negotiated at the highest level but energy dependency has been a major hindrance to was then left to intermediaries with a virtual mono- Ukraine’s autonomous development and has not poly, who had the approval of the highest spheres. been the focus of any strategic reform since 1991. Kuchma launched a “multi-vector” policy to accom- With independence and the collapse of the plan- modate both Western and Eastern expectations, ned economy Ukraine faced a double crisis: the end but this often proved contradictory: it aimed to of the centralised economy from Moscow and the build on joint economic terrain with Russia whilst breakdown of the production chains. In the 1990s protecting the Ukrainian economy from Russian the system was based on fixing deals on a day to oligarchs – sometimes advocating rapprochement, day basis, with bureaucratic networks looking to sometimes rejecting Europe. develop internationally: Yulia Tymoshenko’s acti- Kuchma positioned himself as the supreme defen- vities in “Ukrainski Benzin” are a classic example der of Ukrainian economic interests and at the same – she imported Russian oil and petrol to feed the time he gave the green light to dominant Russian region of Dnepropetrovsk. participation in the energy sector. The weakness of Twenty years after the fall of the Soviet economic checks and balances and of the regula- Union this interconnection remains vital: rail tors left the game in the hands of a single referee wagons used in use in Russia are assembled in the between the groups, ie Leonid Kuchma, who was Luhanskteplovoz factory in Ukraine and some tubes nicknamed by some as “Papa” or the “Guarantor”. 8. Vahtra Peeter: Expansion or Exodus? The new leaders among are only produced in Ukraine and comprise one of The entry of Russian oil companies into Ukraine the Russian TNCs, University of the main Ukrainian exports to Russia. Ukraine was (Lukoil, TNK-BP) started in 1998 and continued Turku, 2007. p.6 http://www. home to nearly 40% of the nuclear power stations until 2004. It reflected “the calculations of former tse.fi/FI/yksikot/erillislaitokset/ pei/Documents/Julkaisut/ in the Soviet era and today it exports electricity to President Kuchma that the Soviet-built infrastruc- Vahtra13_07.pdf Russia, using these same nuclear power stations. ture in Ukraine can work profitably only as part

Neighbour States Fondation Robert Schuman / european issues n°217 / 17th october 2011 Ukraine - Falling Prey to Russian Economic “Colonisation”?

of a larger market in the post-Soviet space”[9]; zerland, whose main shareholder is Ukrainian busi- moreover this echoed a belief held by ‘red’ direc- nessman Dmytro Firtash, who made his fortune by tors, who were the product of the Soviet industrial selling goods in exchange for Turkmen gas in the elite. This view also falls in line with new ambitions ‘90’s[13]. RosUkrEnergo also gathered strength on for regional power, even a “liberal empire[10]”, the domestic energy market by winning permits to that were emerging under the presidency of Rus- deliver gas to some industrial sectors. RUE only 03 sian President Vladimir Putin. The appointment of lost its lead position briefly under pressure from former Russian Prime Minister and historic boss of Yulia Tymoshenko, who concluded an agreement to Gazprom, Viktor Chernomyrdin, as the Ambassa- import gas directly from Gazprom but at a higher dor to Ukraine in 2001 is a good illustration of the price than previously, a price that rapidly exceeded new trend in bilateral relations. the market price due to the formula used in the Kuchma also initiated the politicisation of economic agreement[14]. relations with Russia - negotiations to postpone The cancellation of this agreement is at the heart payment of the gas debt in exchange for political of Ukrainian government demands, and Yulia Ty- promises, which often remained to no effect - such moshenko’s conviction is seen as leading to this. as making Russian an official language or the deli- Many experts have noted however that the 2009 mitation of maritime borders, for example. agreement does include a re-negotiation clause which enables Ukraine to decline talks of a political Orange Power (2005-2009): a rise in Russian nature[15]. This clause is said to be similar to those 9. Andreas Wenger, Robert investments included in Gazprom contracts with other purcha- Orttung, Jeronim Perovic, Russian Business Power: The Role of sers such as Edison (Italy), and DEPA (Greece), Russian Business in Foreign and And so, was it to be Viktor Yushchenko who would who negotiated lower prices or EON Ruhrgas (Ger- Security Relations, Routledge break Ukraine away from Russia? It was now the many) which initiated arbitration. Transnational Crime and Corruption. 2006 p.9 “market” and not policy that would govern eco- nomic relations between the two “partners”, an- 2. Russian economic influence BEYOND 10. The concept is used by the nounced the “Orange” government, which notably the gas wars head of the national electricity monopoly EES Anatoli Chubaïs in committed to paying Russian gas at market price 2003 to describe the mission of (a promise fulfilled by Prime Minister Yulia Tymos- With the threat of cuts in gas supplies to Russia, the natural leader in the henko in 2009). But matters were not quite so Western clients in January 2006 the gas wars post-Soviet space. NG 10.01.2003 Missiya Rossii v XXI veke simple: the euphoria created by the hope of new that were started over the conditions of transit legal and institutional transparency extended to and the purchase of gas by Ukraine dominated 11. In his analysis Vahtra qualifies investors -notably the Russians- who were attrac- thought about Ukraine’s dependency. But the the high levels of Russian investment as an “anomaly” and ted by a market that was so attractive, but which political effects of the interdependency of the questions Russian motives until now had been the “private domain” of the two economies transcend mere questions of gas Ukrainian oligarchs. As of 2005 Russian investors transit. 12. Conference at the Gorchenin, le 23.12.2010: “Russian Business in particular rushed into the telecom sector and in Ukraine, problems and metals industry. At the same time the expansion of Government projects: integrationist discourse in perspectives” Russian businesses was not just specific to Ukraine Kyiv and Moscow 13. Lazareva A., Guillemolles A. or even to the CIS; it reflected the boom of Rus- Une milliardaire ukrainien sort de sian business worldwide, with the value of direct The Kharkiv Agreements of 21st April 2010 between l’ombre, International Politics, foreign investments multiplying by ten between the Russian and Ukrainian Presidents over the ex- #130, winter 2011

2000 and 2010[11]. Allegedly, Russian businesses tension of the lease of the Black Sea Fleet in Se- 14. For a detailed analysis of were also attracted by the “freer” economic climate bastopol until 2042, in “exchange” for a discount on the gas agreements and the in Ukraine[12]. the price of gas until 2019, was decried as an act of presence of Gazprom in Ukraine see the report by Mykhailo But the commercial component in of these trade treason by the opposition. But the visit of Russian Gonchar, Alexander Duleba, relations stopped where gas trade commenced. Prime Minister Vladimir Putin to Kyiv heralded a rap- Oleksandr Malynovskyi Ukrainian In January 2006, Viktor Yushchenko put an end prochement that will possibly be wider and more far and Slovakia in a post crisis architecture of European energy to the first gas crisis by re-introducing a plan to reaching: there has been a series of Russo-Ukrai- security published by the Research import Russian gas that was criticised for its lack of nian mergers by way of the creation of mixed capital Centre of the Slovak Foreign transparency – i.e. that of employing intermedia- companies in strategic sectors, notably sectors in Policy Association http://www. sfpa.sk/dokumenty/publikacie/329 ries, whose usefulness and role were subsequently which the two countries’ economies are still linked deemed dubious. The intermediary, RosUkrEnergo – aeronautics, aerospace, shipbuilding, nuclear and 15. Gonchar op. cit. , (RUE), is a joint venture between Gazprom (50%) the gas sector, with the merger of Gazprom with the Ukrainianweek, Oct 7 2011 http://www.ukrainianweek.com/ and an Austrian company Centragas, based in Swit- Ukrainian state company Naftogaz. Economics/32374

17th october 2011 / european issues n°217 / Fondation Robert Schuman Neighbour States Ukraine - Falling Prey to Russian Economic “Colonisation”?

A lthough both governments have demonstrated gas sector in Ukraine is the focus of control bids via their satisfaction with this cooperation, the views of entrepreneurs reputed to be close to the Kremlin, both Kyiv and Moscow remain different. From Mos- others, notably industrial sectors in the east, are cow’s point of view these integration agreements successfully resisting Russian advances. are a response to “economic security threats” de- The extent of Russian influence is illustrated by 04 fined as of 1996 by the Kremlin as “the need to the media: there is the Donetsk clan embodied by secure outlets” and the need to give priority to Rinat Akmetov, head of an industrial empire that economic relations with “near neighbours”[16]; a was born in the East, but which is spreading across concern to guarantee “the reliability” of these out- the entire country, thanks to his close relations to lets in European markets and in those of the CIS those in power; then there is the gas intermediary are still a priority for the Russian government[17]. Dmytro Firtash, who has become one of the most The negotiation tactics used by Leonid Kuchma are influential businessmen in Ukraine. Both men have also reflected in Viktor Yanukovych’s approach: po- seen their assets mushroom under Yanukovych. But litical concessions from Kyiv in exchange for econo- whilst Akhmetov is portrayed as doing everything mic subsidies, whilst continuing diplomatic contacts possible to defend his interests against Russian ad- with the aim of joining the EU. Moreover, obtaining vances, Firtash can’t rid himself of the shadow of capital to modernise key industrial sectors is a real Gazprom on behalf of which he is said to be acting concern[18] for a country that is lacking invest- as a sort of "influence broker", according to obser- ment. vers in Kyiv and Moscow[21], though evidence of As of 2011 Russia has found itself with a much less this appears circumstancial. accommodating partner and one that is much less prepared for integration, although it is still thirsty Is Gazprom advancing under the cover of for investment. In the nuclear sector the merger economic agents? is taking its time, although the Russian company TVEL has beaten Westinghouse and won a tender The effects of an asymmetrical merger between for the construction of a nuclear fuel production Naftogaz and Gazprom on the transit of gas are

16. State Economic Security plant. In addition to this the Ukrainian govern- at the heart of the present Russo-Ukrainian gas Strategy of the Federation of ment has encouraged the diversification of nuclear crisis. But a merger like this would also facilitate Russia, on the Presidential fuel resources in a new “nuclear code” submitted a take-over of the entire domestic gas distribution decision of Boris Yeltsin, April 1996. http://www.scrf.gov.ru/ to Parliament, and has also approved (after many system: the gas pipeline transit and distribution documents/15/23.html years) loading Westinghouse nuclear fuel. In the network, the gas storage facilities (extremely va-

aeronautic sector the merger would appear to be a luable in managing export requests), and distri- 17. Russia’s energy strategy until 2030, 13.11.2009, decree simple one – only affecting the service companies bution companies. Indeed Gazprom would be in a #1715-p and not the production units as far as the Ukrai- position to take direct control of the gas supply

nians are concerned. Criticised when they were companies in Ukraine, the oblgaz, which are vital 18. Kommersant-Ukraine 6 September 2011. Yanukovich; concluded, as the beginning of the end of Ukrainian links in the acquisition and distribution of gas, Kommersant 04.08.2011 on independence, these agreements are only being by means of a merger of its energy assets with the need to attract foreign loosely implemented. There remains the project those of Renova, the industrial empire owned by investments including from Russia. to merge the gas sector, which the Ukrainian go- Russian oligarch Viktor Vekselberg, who controls vernment is fighting since it fears an asymmetric five gas distribution companies in Eastern Ukraine. 19. Wenger, op. cit. p.7 merger in which it would be the loser. Moreover observers highlight the recent success of

20. http://www.ng.ru/cis/2010- Ukrainian oligarch Dmytro Firtash, whose business 07-22/100_posol.html Big Russian Business in Ukraine: Kremlin’s is closely linked to the interests of Gazprom. “Al-

Tool? though RosUkrEnergo’s and Dmytro Firtashes’ offs- 21. See quote by Russian energy expert Konstantin Simonov on the hore companies effectively control two thirds of the economic information site ubr.ua Recent analyses of Russia’s use of its economic Ukrainian oblgaz (...) we can credit Gazprom with le 6.05.2011. The correspondent power as a political tool make a distinction between the control of 50% of gas distributors” stresses of the daily Libération in Kyiv qualifies ROsUkrEnergo as the energy sector, which is highly politicised, and Yuri Korolchuk of the Energy Studies Institute in Gazprom’s “Trojan Horse” others[19]. This distinction seems mainly to apply Kyiv[22]. Rosukrenergo, relais opaque de to Ukraine. The recent successes of the DF Group – after the Moscou en Ukraine, 19.01.2009 After Viktor Yanukovych’s election the press fore- election of Viktor Yanukovych – in two further sec- 22. Kyiv Post, 12.07.2011 cast an imminent “breakthrough” by the Russian tors – the chemical and titanium industries – are

oligarchs in Ukraine[20]. Eighteen months later, contributing to the idea that Russian economic in- 23. Conference at the Gorchenin Institute op. cit., the picture is a little more mitigated. Whilst the fluence[23] is increasing. Thanks to a billion dollar

Neighbour States Fondation Robert Schuman / european issues n°217 / 17th october 2011 Ukraine - Falling Prey to Russian Economic “Colonisation”?

loan granted by Gazprombank, Dmytro Firtash’s 3. The Limits of Russian Influence group (DF group) seems to be aiming for a mo- nopoly of the fertiliser sector via the successive Attempts at industrial penetration fail in the take-over of the main Ukrainian manufacturers face of powerful Ukrainian oligarchs (contracts approved by the Anti-Trust Committee) to which assets in Tajikistan, Italy and Germany The metals industry, Ukraine’s main export sector 05 might be added[24]. The purchase – made public (47% of its GNP)[29], is one of the pillars of the by Firtash – of the port of Nika-Tera on the Black economy. It is also an attractive sector for Rus- Sea also gives him direct access to the export of sian capital that is often on the lookout for an fertilisers[25]. With strong support from those in early opportunity; and this undoubtedly coincides office he is also in a position of strength in the tita- with the Kremlin’s geopolitical concerns. A first nium sector, a mineral whose corrosion-resistant, breakthrough into the market after 2005 (Severs- lightweight alloys are used extensively in industry tal – Alexei Mordashov in 2007, Rusal – Oleg De- and of which Ukraine is one of the world’s leading ripaska in 2008) did not lead to a major take-over manufacturers. in respect to market share. A second wave came Some believe that the agreement between Moscow after the election of Viktor Yanukovych, which led and Firtash in the business sector will lead to pro- to warnings in the media against Ukraine being Russian political influence. Experts of the Ukrainian “sold out” to the Russians: firstly by the sale of market tend to tone the use of the word "agent”, Donetsk IUD to an anonymous group of Russian in- stating that there is a “convergence of opportunist vestors represented by the VTB bank, and then the interests rather than a stable alliance within a real purchase of Zaporizhstal by the Russian oligarch strategy of influence.” Oleg Deripaska, who won a call for tender against Rinat Akhmetov, and finally the daily rumours of Finance: the search for new markets or an the imminent sale of other sectors. However the invisible Russian hand? Russian advance was rapidly brought to a halt: Akhmetov launched a legal contra-attack and reco- The presence of Russian investors in the banking and vered Zaporizhstal in September 2011, whilst the financial sector is impressive: the two (small) stock IUD barely consolidated its assets. exchanges in Ukraine – PFTS and Ukrainska Birzha 24. http://www.groupdf.com – belong to the RTS Moscow exchange, 10% of the Economic Relations with the European Union Ukrainian banking sector is said to be held by the Rus- 25. Kommersant Ukraine 29/09/2011 sians[26], either through the purchase of Ukrainian In the past the EU expressed its position clearly, sta- banks (Prominvestbank), or via the establishment of ting that stabilisation in Russo-Ukrainian relations 26. http://delo.ua/finance/ Ukrainian subsidiaries (VTB, Sberbank, Alfa). In 2009, was vital for a pan-European zone. Moreover the sta- nbu-pochti-10-bankovskoj- sist-161641/, 11 July 2011 the Ukrainian National Bank announced protectio- bilising effect of economic relations – noted in Russo- nist measures to prevent penetration by the Russian European relations – is missing from energy relations 27. President of the Sberbank State bank Sberbank into Ukraine – since it makes no in the former Soviet area because of the asymmetrical German Gref at the Skovoroda Club. www.skovoroda.com.ua secret of the fact that it is attracted by the Ukrainian balance of power between Russia and its Ukrainian and market[27]. Belarus partners[30]. Russian influence would there- 28. op.cit. Moreover there has been a trend for major Ukrainian fore be somewhat destabilising. As a result, "with the 29. http://www.ukrstat.gov.ua/ companies to contract debts (the railway, road building prospect of a possible rise in Russian influence in cer- One third of Ukrainian exports in company, energy companies) with Russian state banks tain sectors and in the context of the interdependence value I (2011) (Sberbank and VTB) which benefit from the solid bac- of the two economies, the association agreement and 30. Wenger, op.cit. p.17 king of the Russian state. Although the interest of Rus- that of free-trade are a vital support base” to gua- sian banks is presented as being purely commercial in rantee Ukraine economic development across the Eu- 31; Eastweek 14/09/2011 “How nature, the potential influence that Ukrainian debt re- ropean zone, says one European diplomatic source in Ukrainian Oligarchs view economic integration with the EU and presents has to be taken into account. Another means Kyiv. The DCFTA would be supported by the Ukrainian Russia” http://www.osw.waw.pl/ for applying financial pressure at government level lies oligarchs, not for trade reasons, since WTO mem- en/publikacje/eastweek/201109 in the Ukrainian State’s debt with regard to the Russian bership has opened the markets up adequately, but 32. http://www.pravda.com. State bank VTB; it totals 2 billion $ and is due at the as a protection to keep Russian economic pressure at ua, 29.09.2011 Boguslaev, end of 2011. Until now the end date has been extended bay, to which they would otherwise be subject[31]. Viatcheslav: “there are two almost automatically but the risk that a further exten- However some Ukrainian industry bosses, notably in Ukraines: one which works and the other which is partying and sion may be granted conditionnally cannot be ruled mechanical engineering[32], who are extremely de- wants to flee to Europe.” out, says economist Vasyl Yurychkin[28]. pendent on outlets in Russia, are against it.

17th october 2011 / european issues n°217 / Fondation Robert Schuman Neighbour States Ukraine - Falling Prey to Russian Economic “Colonisation”?

CNLO C USION ti-trust committee, committees delivering permits etc …) to corruption and cronyism makes them In conclusion we should remember that the dan- more vulnerable to manipulation for political or gers associated with rising Russian political in- mercantilist reasons. 06 fluence over the Ukrainian economy is rather more the result of the interconnection of the unreformed Soviet era production networks, rather than any real “colonisation” bid. Estimates of Russian eco- 33. See for example the World Bank’s data aimed nomic influence – which is difficult to quantify – Author : Sophie Lambroschini at the businesses hoping to tend to be used to serve political stances. But its worked as a journalist in Moscow from 1994 to work in Ukraine http://www. doingbusiness.org/data/ increase in the domestic gas sector in Ukraine na- 2004 (Libération, Le Point, Radio Free Europe/ exploreeconomies/ukraine, turally has an effect. Ukrainian debt – either State Radio Liberty) and since 2005 she has been the international ranking in governance puts Ukraine or business – can also be said to be a weak point. working in Kyiv. She is preparing a PhD at the systematically in the lower third http://info.worldbank.org/ The vulnerability of the regulatory bodies gover- University of Paris-Ouest Nanterre on post-Soviet governance/wgi ning economic and trade relations[33] (courts, an- economic elite transition.

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Neighbour States Fondation Robert Schuman / european issues n°217 / 17th october 2011