Transcript: Q&A Transforming Ukraine: Successes and Obstacles on the Way to Reform Arseniy Yatsenyuk Prime Minister, Ukraine Chair: Robert Brinkley CMG Chairman, BEARR Trust; British Ambassador to Ukraine (2002-06) 15 July 2015 The views expressed in this document are the sole responsibility of the speaker(s) and participants do not necessarily reflect the view of Chatham House, its staff, associates or Council. Chatham House is independent and owes no allegiance to any government or to any political body. It does not take institutional positions on policy issues. This document is issued on the understanding that if any extract is used, the author(s)/ speaker(s) and Chatham House should be credited, preferably with the date of the publication or details of the event. Where this document refers to or reports statements made by speakers at an event every effort has been made to provide a fair representation of their views and opinions. The published text of speeches and presentations may differ from delivery. 10 St James’s Square, London SW1Y 4LE T +44 (0)20 7957 5700 F +44 (0)20 7957 5710 www.chathamhouse.org Patron: Her Majesty The Queen Chairman: Stuart Popham QC Director: Dr Robin Niblett Charity Registration Number: 208223 2 Transforming Ukraine: Q&A Question 1 I'd like to push you a little bit more on the Saakashvili appointment, if I may. I realize that you're not personally behind the appointment of former Georgian President Saakashvili as governor of Odessa, but perhaps you could give us some insight on the thinking that was behind the appointment, and also how you see the short to medium-term outlook for Odessa within Ukraine. Arseniy Yatsenyuk My thinking is that the cabinet asked the president, and the president signed an executive order, and Saakashvili became the governor. It's just as simple as it is. We expect that Mr Saakashvili is to deliver real changes in Odessa. I am at his disposal. And not only at his, at everyone who wants reform in this country. Question 1 What special qualities does he bring? Arseniy Yatsenyuk He's the former president. It's great to have the former president as a governor of one of the biggest Ukrainian regions. Question 2 When you were in Washington, you described some of the populist members of the Rada as lunatics. I think some of them actually come from your own party. But it does seem that some of the laws that they're passing risk interfering with the IMF programme and so on. So can you tell us what you're planning to do to get them back into line and to ensure that the Rada doesn't block some of the necessary reforms? Arseniy Yatsenyuk Sometimes it happens with the politicians – they go crazy before the elections. So we are to have municipal elections on the 25 of October this year. I have a very good example for lunatics, not only in Ukraine but in different countries, including some EU member states. To pass austerity is definitely unpopular. If you go to your people saying: my fellow citizens, we are decided to freeze all social expenditures, wages and salaries – that's what I did. We have to increase by six times the communal tariff bill. We need to impose new taxes. We need to close tax loopholes. You have to work more in order to get more. This is very unpopular, but in the short term. Look at what Prime Minister Cameron did a few years ago. You in the UK passed austerity. He was under severe attacks by his political opponents. And he hit the home run – he won the elections. This is the best example. So if you think about the future, if you do everything to build up the prosperous country and you don't care about your own political dividends, for the statesman it's important to pay the political price, to spend the political currency, but for the future of the country. This is the message I always deliver to my friends in the parliament. I admire the parliament. 3 Transforming Ukraine: Q&A Yes, it's true that some political forces want to roll back on the reform agenda. But we are united with the president. Even in case any populistic bill will be on the floor and the government will pass this bill, the president will definitely veto it. No chances to stop reforms. We've entirely changed the record of our relations with the IMF – well, it's better for you to ask the IMF, because I can't say on the side of the IMF. For example, the G7 ministers. Everything we promised, we delivered. Ukrainian people have suffered too much, and they are suffering. Living standards dropped severely, very high inflation, huge depreciation. So it's a huge challenge but from day to day we are talking to the Ukrainian people. We ask them to be patient and to do everything for the brighter future of this country. People are much more, I would even say, mature. They have the wisdom, contrary to some Ukrainian politicians. But we will change these politicians. Question 3 When you took the job, you said it was a suicide task, so I'm glad to see you're still alive and kicking. But what I was hoping you would do was give us a sense of how the war is going, because it's difficult, as you know, and sometimes a bit dangerous to get onto the front lines. What do you think the separatists' goals really are? Is this frozen or is it unfreezing? Has it ever stopped? Where is it going? Are you concerned – there have been lots of reports of a Russian military build-up of supplies and aid to the separatists. So if you could just give us your sense of where things are now, that would be great, thank you. Arseniy Yatsenyuk This is one of the most complicated questions. There is no easy answer. One can say that even there is no answer at all. If I may ask you, let's just avoid the language of separatists. There are no separatists. There are just Russians and Russian-led terrorists. This is the right legal definition. Russia is personally engaged. Russia masterminded and orchestrated illegal annexation of Crimea – this is a fact. This is an international crime. There is word that Russia is to 'pay the price'. Usually we pay the price in the supermarket. Russia is to be punished by the international law for the illegal annexation of Crimea. For me, this is both a political and personal issue. I was minister for economy in Crimea. All these rumours that there were entirely pro-Russian sentiments in Crimea, that's not true. So what we have on the table, the only deal which is still viable, is the so-called Minsk deal. Is it time to elaborate on this? If you want to get the answer on what's going to happen in the future in terms of Russian-led invasion. We do understand that Russia is not willing to implement the Minsk deal, but the policy of the president of Ukraine and of the Ukrainian government is as follows: we are whiter than white in implementing Minsk. What the president promised, we did. The president promised to sign an executive order, a ceasefire order – he did it. We passed an amnesty bill – he signed it. We passed a bill on the special status of Donetsk and Lugansk – it is enacted. We promised to start constitutional amendments and the president is to address the house tomorrow with his constitutional amendments, which are in line with the Minsk deal. I do understand that what Russia wants – the Russian play is to blame Ukraine for not implementing the deal and saying, look, that's Ukraine who failed. That's the reason why we dropped off this deal. No chances, to no avail. We will be the last one who is to say that Minsk is dead. No. There are fingerprints of President Putin on the Minsk deal, so he is obliged to implement the deal. Chancellor Merkel and President Hollande, they contributed a lot of their political capital into this deal. They did a lot to make this deal happen. We are to stay united and to act in concert to make Russia implement and fulfil the deal. 4 Transforming Ukraine: Q&A What is the aim of Putin? Definitely not to make Ukraine happy. His aim is to resume something that resembles the Soviet Union. His aim is to take over Ukraine. His aim is to dismantle Ukraine as a nation and as a country. What's happening in Ukraine is not just related to us. This is the global challenge. It relates to everyone sitting in this room. Russia is the threat to global stability and security. This is not the way a P-5 member can act. They have to change their policy, or we have to change their policy, and to get one united, strong policy towards Russia. The only language Putin understands is strength. So let's be strong. Robert Brinkley Prime Minister, as a follow-up to that, we've had a question on Twitter asking: do you think a formal takeover of the occupied areas of Ukraine by Russian forces is likely? A formal takeover. Arseniy Yatsenyuk It's complicated for me to distinguish what does it mean, formal and informal. What we know is that Russia has stationed about 40,000 military boots on the ground, 10,000 of which are Russian regular army military boots.