How can the West solve its Ukraine problem?

Ukrainians have been marking a year since the start of protests that brought down President Yanukovych

Russia badly overplayed its hand last year when it tried to bring Ukraine into the Eurasian Union against the passionate opposition of many Ukrainians.

The European Union is now risking the same thing by trying to bring Ukraine into the West without reference to economic reality or the willingness of European publics to bear the enormous costs involved, and at a time when the EU itself is in deepening crisis.

Russia is suffering badly as a result of Western economic sanctions - but Ukraine's situation is far worse, with a predicted fall in GDP of 7% this year.

If this decline continues, the Ukrainian state will face collapse,

Throughout the 23 years since the end of the Soviet Union, too many members of the Western media and policy worlds have ignored or misrepresented key aspects of the Ukrainian-Russian economic relationship.

This allowed them in turn to ignore crucial features of the economic balance of power in Ukraine between Russia and the West.

In their zeal to denounce Russia for putting pressure on Ukraine over gas supplies, Western commentators usually neglected to mention that, through cheap gas and lenient payment terms, Russia was in fact subsidising the Ukrainian economy to the tune of several billion dollars each year - many times the total of Western aid during this period.

This allowed the same commentators not to address the obvious question of whether Western states would be willing to pay these billions in order to take Ukraine out of Russia's sphere of influence and into that of the West.

Russian trade vital

Western commentators were not wrong to portray Russia as supporting a deeply corrupt and semi-authoritarian system of government in Ukraine - but they too often forgot to mention that trade with Russia has also been responsible for preserving much of the Ukrainian economy.

It is not just that Russia remains Ukraine's largest partner, with trade in 2013 exceeding that with the whole of the EU; it is also a question of what is being traded. Ukraine exports manufactured goods to Russia, thereby supporting what is left of Ukrainian industry.

Russian gas has been key to the Ukrainian economy

To the European Union, Ukraine mostly sends raw materials and agricultural products - with the latter in particular heavily restricted by EU quotas and tariffs.

Ignoring this enabled Western commentators to ignore the question of how - in order to move towards the EU - Ukraine could restrict its trading relationship with Russia without ruining its economy in the process; or, on the other hand, whether the EU would be willing to change its own rules so as to admit Ukrainian imports.

Finally, very few Western commentators indeed have mentioned what is perhaps the most significant aspect of the Ukrainian-Russian relationship, namely that Ukrainians are entirely free to move to Russia to work, and to work in the vast majority of jobs and professions.

As a result of Russia's much more successful economy, more than three million Ukrainians are now working in Russia, and sending remittances to their families in Ukraine - a vital contribution to the economies of several Ukrainian regions.

This is at least three times the number of Ukrainians working legally in the whole of the European Union.

In order to bring Ukraine into the West, would EU members be willing to allow free movement of Ukrainian labour?

And - as is necessary if the EU is to turn Ukraine into a strong anti-Russian ally - to do so not in some almost impossible future of Ukrainian EU membership, but tomorrow?

The answer is obvious.

No integration

The UK Independence Party is soaring in the polls and mounting a strong campaign to take Britain out of the European Union in a referendum backed by the Conservatives and scheduled for 2017.

Marine Le Pen: hostile to further European integration

All over the EU, right-wing parties are gathering strength.

In France, sober commentators are warning that there is a real chance that in 2022 the National Front could win the French elections and Marine Le Pen could become President of France.

And all of these developments are driven above all by hostility to immigration.

On the one hand, therefore, the West is clearly not prepared to make the economic sacrifices necessary to support the Ukrainian economy in the face of Russian hostility.

On the other, the existing conflict in Ukraine makes it impossible for any Ukrainian government to conduct the kind of economic and political reforms on which the EU is insisting, and on which Ukrainian progress towards the West depends.

By slashing subsidies and closing down much of Ukrainian industry, such reforms would drive much of the population of eastern and southern Ukraine into the arms of Russia.

By attacking corruption, they would destroy the position of oligarchs in those regions who are key to enforcing Kiev's authority there.

Kiev's dependence on these oligarchs and on nationalist militias to fight the war in eastern Ukraine represents a serious and growing threat to Ukrainian democracy and to the spread of liberal values in Ukraine.

A worrying sign in this regard was the appointment last month of Vadim Troyan as regional chief of police in Kiev. His regiment, the Azov battalion, is known for links to the far right and his promotion seems largely in reward for his group's participation in the fighting in eastern Ukraine.

This was counter-balanced by the appointment of a Jewish speaker in Parliament.

Compromise needed

But the lessons of all this should be obvious.

The West simply does not have the means or the will to integrate Ukraine into the West while isolating it from Russia.

The effort to do so is not strengthening but undermining Ukrainian democracy.

If there is to be any chance of Ukrainian economic and political progress, a compromise must be found whereby Ukraine can continue to trade as openly as possible with both the EU and Russia and Ukrainians can continue to work freely in Russia.

That would leave Ukraine free to carry out the internal reforms that it needs to undertake, whether or not it is headed for EU membership.

This will be impossible unless at the same time there is a political compromise with Russia; and the terms of such a compromise are equally obvious.

In the first place, Ukraine should be neutralised.

Ukraine mostly sends agricultural products and raw materials to the EU

This cuts both ways. Russia would formally have to abandon - as in effect it already has - hopes to bring Ukraine into a Russian-led bloc.

The West would formally have to abandon the possibility of bringing Ukraine into Nato; and the West too has in effect already done this by demonstrating again and again its unwillingness under any circumstances to fight to defend Ukraine.

As far as Ukraine's eastern Donbass region is concerned, any solution has to involve very extensive autonomy for the Donetsk and Luhansk regions, guaranteed by the international community - not the ridiculous offer of temporary three-year autonomy which Kiev has offered so far.

In addition, the EU should back the guarantee of Russian language rights in Ukraine - not because Moscow is demanding it, but because the West badly needs to assert its own values in the face of the growing power of neo-fascist groups in Ukraine.

Opposition to such a deal in certain Western quarters will be bitter; but once again, these opponents need to ask themselves just how much they are prepared to sacrifice and to risk in order to turn Ukraine into a pro-Western and anti-Russian state.

The time for blowhard posturing is over. The time for hard economic calculation has begun.

Anatol Lieven is a professor at Georgetown University's School of Foreign Service in Qatar. He is author among other books of Ukraine and Russia: A Fraternal Rivalry.