Are We at Customs Union?

UKRAINE - In Brief 29 Nov 2013 by Dmytro Boyarchuk

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Unfortunately, results of Vilnius Summit did not surprise with positive results.  As we discussed, Victor Yanukovitch decided not to decide at this time.  The general opinion is that Moscow stands behind of such decision.  We do not want to refute this statement – pressure from Moscow and possibility of ‘unconditional’ loans indeed were among alternative costs of Euro-integration.  However, what we should understand about this decision – it was not a decision for the sake of Russia, it was a cost-minimizing decision for the benefit of Yanukovitch.Many make mistake considering Yanukovitch to be a puppet in someone’s hands.  Firstly there was Rinat Akhmetov, the richest Ukrainian, who was believed to coordinate actions of Yanukovitch. Now we assume Vladimir Putin manipulating actions of Ukrainian president.  The reality is that Yanukovitch is playing his own game benefiting from the undervaluation of his capacities. What does it mean in terms of future developments?  We expect now Yanukovitch to start negotiating with Moscow ‘compensation for the loss of Euro-opportunities’.  Probably, Kremlin will grant some funds to remunerate the performance Yanukovitch arranged at Vilnius. However, the main target of Putin is Customs Union for Ukraine and here he has a problem.Thus all we know that the story is becoming more exciting and even dramatic with very uncertain outcome at the end.  Especially, in view of on-going mass-protests around Ukraine…