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The Negotiations between Ukraine and Russia on Gas Transit: A Progress Report

The contract between Ukraine and Russia concerning gas transit expires at the end of 2019. Negotiations for a new contract have been going on for quite some time. Despite the European Union’s mediation, different interests, viewpoints and hurdles
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  No. 242 analyticaldigest 3 December 2019 RUSSIA󲀓UKRAINE russian German Association forEast European StudiesResearch Centre for East European Studies University of BremenCenter for Security Studies ETH Zurich Institute for European, Russian, and Eurasian Studies The George Washington University Center for Eastern European StudiesUniversity of Zurich  ■  ANALYSIS  A New Momentum for Settling the Donbas Conflict? 2By André Härtel, National University of “Kyiv-Mohyla Academy”  ■ OPINION POLL Ukrainian and Russian Popular Opinion on the Conflict in the Donbas 5  ■ MAP Disengagement of roops in the Donbas 12  ■  ANALYSIS Te Negotiations between Ukraine and Russia on Gas ransit:  A Progress Report 12By Julia Kusznir, Jacobs University Bremen  ■ SAISICS Imports and Consumption of Natural Gas in Ukraine 16  RUSSIAN ANALYTICAL DIGEST No. 242, 3 December 2019 2 ANALYSIS  A New Momentum for Settling the Donbas Conflict? By André Härtel, National University of “Kyiv-Mohyla Academy”DOI: 10.3929/ethz-b-000382152  Abstract: Despite some early signs of movement in resolving the Donbas conflict between Ukraine and Russia, there is no clear path forward yet. Ukraine’s young President Volodymyr Zelensky is still working to construct a set of policies that will be acceptable to his divided population. Te Russians seem to benefit from the status quo. Similarly, numerous questions remain about how to implement Minsk 2 at a time when the West seems to be tiring of sanctions and more focused on other issues. Zelensky’s Surprise Election Brings New Hope Te war in Donbass is in its sixth year and has so far left approximately 13,000 people dead. Te fighting in both the occupied territories consisting of the so-called “Donetsk People’s Republic (DNR)” and the “Luhansk People’s Republic (LNR)” and the Ukrainian-held parts of the respective oblasts has taken a serious toll and dire humanitarian and economic conditions prevail, espe- cially at the contact line. Te Minsk Agreements of February 2015 (Minsk II) have so far ensured a fragile ceasefire, but were never fully implemented by either the Ukrainian or Russian sides as would be necessary to end this conflict. With the unexpected rise of Volo-dymyr Zelensky to the Ukrainian presidency in Spring 2019, and the absolute majority he won in parliamen- tary elections shortly afterwards, the overall atmosphere has changed. Zelensky’s election platform, promising to speed up negotiations in the Normandy Format and end the war, a high-level prisoner exchange in early Sep- tember, and the general agreement of the Ukrainian side to the so-called “Steinmeier Formula” at the begin-ning of October, have brought hope for new momen-tum and the beginning of a genuine settlement process. Tis article analyses the current situation and asks if we can really expect significant progress in the near future. 2015–2019: Poroshenko—the “War President”? In order to assess what has changed recently it makes sense to take a brief look first at the conflict’s dynamics and the related policies of the Ukrainians, Russians and other participants in recent years. After the Minsk  Agreements of February 2015 were able to stop large- scale hostilities and establish a more or less stable con-tact line between the occupied territories and the rest of Ukraine, it soon became clear that the framework agreed to in the Belarusian capital was a challenge first of all to the Ukrainian side. Te country’s sovereignty had been compromised by annexation and intervention and the public mood then was that any further losses or concessions would upend the Ukrainian state. Already in late summer 2015 Ukrainian legislation on decen- tralization and more autonomy for the occupied terri-tories (to say nothing of a Minsk-style “special status”)  was accompanied by violent and deadly clashes between nationalist protestors and the police. As a result, Presi-dent Poroshenko began to understand both his lack of negotiating leverage due to a growing patriotic-nation-alist sentiment in his country (one of the main results of the Revolution of Dignity and the war) and the domes-tic political calculations that he would need to make. Tat the Ukrainian president made the war with Russian and separatist forces the main theme of his term was, however, as much his choice as a consequence of Russia’s behavior. Te Kremlin from 2015 onwards never showed much interest in conflict resolution and despite Western sanctions applied a consistent tactic of confrontation vis-à-vis Ukraine. Moscow continued to fortify the so-called “DNR” and “LNR” militarily and instructed them to demonstrate as much bellicosity and intransigence possible under a working cease-fire agree- ment. At the same time, Russian Donbas-policy was curated mostly by the infamous Vladislav Surkov, who engineered a more Kremlin-convenient elite set-up in both entities and drew them ever closer into a Moscow-dominated security, economic, and media space. Te Russian portrayal of Poroshenko as a “war president” and his political allies in Kyiv as the “party of war” therefore first of all served Russian interests in a perpetuation of the post-Minsk II status quo in Donbas. Te international community, and especially the Normandy format participants Germany and France, for various reasons seemed to have exhausted their polit- ical will to invest much into conflict regulation after the Minsk Agreements. Especially the Germans, who took the lead in the management of the EU sanctions regime against Moscow and in negotiating the cease- fire in Minsk, where unable from late 2015 onwards to exert much leadership. With anti-Russian sanctions still  RUSSIAN ANALYTICAL DIGEST No. 242, 3 December 2019  3 unpopular among the German public and the migra- tion crisis both constraining foreign policy resources and significantly hurting Angela Merkel’s standing, Berlin slowly lost its earlier courage. At the same time, calls for a more progressive engagement of the United States in the Normandy Format fell on deaf ears in Washington,  where conflict resolution in Donbas is still perceived as a European matter. Te Minsk Agreements—Still the Way to Go? Over the years the Minsk Agreements have come under heavy criticism especially from the Ukrainian side and neutral observers. Indeed, the technical flaws, such as the uncertainty about the sequencing of the steps towards regulation and the lack of detail regarding even the most crucial points (elections, border management, special status), are more than obvious. Yet, any peace agreement first of all reflects the de-facto situation on the ground at the time of its signing. In early 2015 Ukrainian regular and volunteer forces had been badly hit and driven out of Debaltsevo by the com-bined thrust of regular Russian and separatist fighters,  who threatened to advance even further into Ukrainian territory and take a then fragile post-revolutionary state and economy to the brink. In many ways therefore the Minsk Agreements, with their insistence on changing the Ukrainian constitution in favor of foreign-backed insurgents, bore an anti-Ukrainian bias and could be interpreted as a confirmation of Russian strategic success.Te Minsk-ensured “low-key” cease fire, on the other hand, also provided the foundation of Ukraine’s slow restoration as a functioning state and economy ever since. Although it is understandable that Ukrainians,  with their now reformed and modernized army, and a stable contact line in place, are more than uncomfort-able with the spirit and letter of Minsk, their critique is somehow ahistorical. Arguably, the visible success of the Agreements in securing at least a “negative peace” and Ukraine’s Western partners’ continuous reference to them as the sole basis for further progress make any alternative to them unlikely. Zelensky: A Peacemaker on Shaky Grounds Te landslide election of former comedian Volodymyr Zelensky to Ukrainian president took many by surprise. One of the main reasons for his success in both the 2019 presidential and parliamentary elections was his more conciliatory attitude towards the Donbas conflict and his determination to make peace. Indeed, the incum- bent Poroshenko in many ways misinterpreted the public mood with his insistence on the campaign slogan “Army, Church, Language!”—the majority of Ukrainians were tired of both the war and the former president’s rigid Ukrainization campaign. Still, even many Ukrainian observers were irritated by how much Zelensky priori-tized conflict regulation from his first day in office and how soon he implemented, at first unilaterally, moves such as the withdrawal of Ukraine’s armed forces near Stanytsia Luhanska already in June this year. Zelensky’s reasoning, aside from the population’s war fatigue, is however easily explained: the ongoing confrontation is an unbearable burden to Ukraine’s economic recovery (the government’s “anti-terrorist operation”/“operation united forces” comes at a cost of approximately 4 mil-lion Euros a day) and a significant distraction from the new president’s ambitious reform agenda. However understandable in general, Zelensky’s policy approach is not without risks and might ulti- mately be ill-fated. First, one of the main concerns is that the hasty approach applied now might come at the cost of quality decisions. Zelensky, as demonstrated by his now public telephone call with U.S. President Donald rump, is a foreign policy novice and so far lacks the support of a professional foreign policy machinery. Many Ukrain-ian experts see his actions as guided by intuition rather than strategy, which seems to be confirmed by a presi-dential administration and foreign ministry who seem to be in competition with each other to issue superficial statements announcing different “plans” for peace in the Donbas. Second, Ukrainian public opinion on the Don-bas conflict is much more contradictory than commonly assumed, which might develop into a source of domes-tic contention that Zelensky will still need to address and manage. While indeed a large majority of Ukrain-ians wanted the new president to prioritize peace in the Donbas (in summer 2019, almost 70% opted for a nego-tiated peace, 20.1% “without any conditions”), and even to negotiate directly with the DNR/LNR-authorities (41.5%), and re-integrate Donbas into Ukraine (56%), only a minority of 26% are willing to accept a “special status” for the so called “DNR” and “LNR” entities in Ukraine’s constitution or to changes in Ukraine’s now clearly Western-oriented foreign policy (24.7%). Te number of Ukrainians perceiving Russia as an “aggres-sor state” also equals the number of Ukrainians who  want a fast end to the war. Additionally, the Ukrainian president faces the problem that his support base, while consisting of more than two-thirds of Ukrainians, is a mostly “silent majority” and much harder to mobilize than his opponents (the famous “25%”), very visible at the “No Capitulation” rallies in mid-October. Tere-fore, Zelensky has in no way overcome Poroshenko’s problem of a lack of domestic negotiation leverage and he might face serious opposition if his plans and likely concessions towards Ukraine’s enemies become clearer.  RUSSIAN ANALYTICAL DIGEST No. 242, 3 December 2019  4 Finally, the current public debate in Ukraine over “red lines,” such as Ukraine’s chosen foreign policy direc-tion or the details according to which the occupied ter- ritories are finally re-integrated, is in reality a discussion about Ukraine’s possible different futures as a state and society. Despite the current fatigue with Poroshenko’s non-conciliatory approach towards the conflict and his Ukrainization campaign, one cannot argue with the fact that the former president had a convincing vision for his country’s future. In his plans, the re-integration of Don-bas would happen exclusively on Kyiv’s terms or not at all, ensuring the functional nexus between the country’s domestic transformation, a foreign policy aimed at West- ern integration, and a clear patriotic or pro-Ukrainian political elite structure. Zelensky, however, still has to demonstrate how he wants to reconcile obviously con-tradictory aims, such as re-integration based on negotia- tion with Russia (and the separatists) and a subsequently more diverse political elite structure on the one hand, and non-intervention in the country’s domestic reforms and an unchanged pro-Western foreign policy course on the other. If no feasible and convincing strategy is  worked out by the new president, Ukraine might easily fall back to its pre-2013 “amorphous” definition of both state and society. Is Russia Really Moving? Te Russian position on the conflict and its dynamic are much harder to assess. Especially on the Ukraine portfolio, but not only here, the Kremlin from the very beginning not only used hybrid war techniques, but also engaged a form of hybrid communication and diplo- macy. Careful not to portray his country as a direct party to what the Russians portray as an internal Ukrainian matter or “civil war,” President Putin likes to keep his counterparts in the dark about Russia’s preferred final scenario while at the same time applying all means pos-sible to be in full control of the proceedings. According to diplomats this form of communication extends to the level of the rilateral Contact Group, where Russian representatives often first seem to commit themselves to some understanding, only to backpaddle shortly after-  ward, trying to put the ball back in Ukraine’s court, and thereby leaving everyone puzzled. Accordingly, there is a worrying level of distrust in the credibility and con-structiveness of Russian decision-makers. What has changed over the years is the general per-spective through which Russia looks at the conflict in Donbas. Whereas, at the beginning, the conflict was regarded as a regional or “zone of influence” affair between EU aspirations and Russian great power inter-ests, the whole Ukraine portfolio has long become part of the Kremlin’s worldwide strategy aiming at the mani-festation and formalization of a new, multipolar order. Te latter seems to imply that conciliatory steps by the Ukrainian side are not enough for the Kremlin or that the Russians expect at least an additional bargain with the West on other portfolios.From this perspective it is unlikely that the ouster of Petro Poroshenko from office and the rise of the seem-ingly more conciliatory Volodymyr Zelensky have had an impact on the Kremlin. Nevertheless, there are a few observations indicating that the Kremlin, at least incre-mentally, might have adopted a more forthcoming posi- tion in terms of conflict resolution in Donbas. First, and most important, is the clear impression that the “re-integration” of occupied Donbas into Ukraine (how- ever unclear under which terms precisely) has for quite some time already become the consensus position in Moscow. Second, Vladimir Putin lately seems to have enlarged his circle of advisors on the conflict, where the hardliners Vladislav Surkov and Viktor Medved- chuk are increasingly balanced out by the more moder-ate Dmitri Kozak (who apparently looks at the two de-facto entities as a liability). Tird, at the end of October the Russians indeed began with the agreed “disengage-ment” of their forces from Zolote and promised to do so in Petrivke, thereby positively answering Ukrainian steps towards peace. Still, the question remains why the Russians should be interested in the quick solution Zelensky is seeking. Looking at the situation on the ground, where the so-called “DNR” and “LNR” have already developed into a huge burden for Ukraine’s development and foreign policy aspirations, and at the West’s increasing fatigue  with the portfolio and anti-Russian sanctions, sitting things out looks like the best Kremlin tactic for now. Te only reasonable explanation for Russia moving towards regulation sooner rather than later might be Russian awareness that the ongoing integration of both de-facto entities, especially into Russia’s economic orbit, has gone too far already and that the time for a re-integration at the sole expense of Ukraine is running out. In the end, the Kremlin might also just be testing the waters with Zelensky and the West. Will the young and inexperi-enced Ukrainian president make more concessions than one might rationally expect? Will the sanctions-fatigued  West overestimate the first positive signs and begin to remove sanctions without much strategic cost for Russia? Conclusion—Who Rules? Te current signs of a rapprochement between Ukraine and Russia are without doubt a positive and deeply nec-essary development. oo many people have lost their lives and homes in Donbas, especially on the Ukrain-ian side, in a conflict which was deemed an impossibility  RUSSIAN ANALYTICAL DIGEST No. 242, 3 December 2019  5 before the year 2014. Tat both sides have begun with concrete steps, such as the disengagement of forces in three localities at the contact line, speaks for the inter- pretation that a serious interest in progress and even- tual conflict resolution exists. However, it is too early for any euphoria. In a situation where soldiers still die nearly every day, peace can hardly be expected tomorrow.  Aside from the grievances srcinating after more than five years of war, both Ukraine and Russia do not yet seem to have made all preparations for a “positive” peace. In Ukraine, a young president needs to figure out his country’s national interest and how to deal with a well-organized patriotic-nationalist opposition to any conces-sions. For Russia, especially with the international envi-ronment developing in its favor, sticking to the status quo for some time might still be seen as more beneficial. After all, we have to remind ourselves what this con-flict is about. Until roughly the Euromaidan protests began in 2013 Russia had managed to convert Ukraine into a clientelist state, tightly bound to Moscow by a shady transnational “membrane” manifesting itself by the Russia-loyal network of the former Party of Regions and its stronghold in the country’s Southeast. Te Rev-olution of Dignity upended this instrument of Russian domination over Ukraine and gave the latter a chance to re-calibrate its future. With the war in Donbas, Rus-sian foreign policy wanted to correct this “mistake” and revive the former “membrane” via two “rojan Horses” (the special status-granted “DNR” and “LNR”) even- tually acting like political “cancer cells” inside Ukraine. Te most important, and so far unanswered, question therefore is how the Minsk Agreement’s implementation can succeed without forcing Ukraine back to 2013 while satisfying Russian great power status in its neighborhood.  About the Author   André Härtel is DAAD Associate Professor in the “German and European Studies” Programme (DES) of the National University of “Kyiv-Mohyla Academy” in Kyiv, Ukraine. OPINION POLL Ukrainian and Russian Popular Opinion on the Conflict in the Donbas Figure 1: Currently, there are constant negotiations on the ways to quell the armed conflict in Donbas. In your opinion, to achieve peace, should there be compromises with Russia and the leaders of the self-pro-claimed Donetsk and Luhansk republics? (in % of respondents) 20.18.820.93024.648.843.751.148.350.217.428.416.48.313.113.719.211.613.5120 %10 %20 %30 %40 %50 %60 %70 %80 %90 %100 %UkraineWestCenterSouthEastPeace at all costs, any compromise should be agreed upon with whomever and for whateverFor peace, it is worth compromising, but not on all of themPeace in Donbas can only be established from a position of strength when one side winsDifficult to say Source: study conducted jointly by the Ilko Kucheriv Democratic Initiatives Foundation and the Razumkov Center sociological service on June 13–20, 2019 in every Ukrainian region except for Crimea and occupied territories of Donetsk and Luhansk oblasts. 2,017 respondents were polled aged 18 and above,
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