Ukraine: on brink of civil war?

Ukraine elected billionaire Petro Poroshenko as its new president last Sunday. He secured almost 60% of the vote.

An oligarch who made his fortune in chocolate, Poroshenko was a member of both the previous administration headed by pro-Russian Victor Yanukovych, and its pro-Western predecessor, led by Viktor Yushchenko.

Fighting in the Russian-speaking east of the country intensified this week after Kiev launched a military assault to recover an airport seized by pro-Russian separatists. The separatists prevented four million people, or 9% of the population, from voting.

What the commentators said

Poroshenko’s immediate priority must be to restore order in the east, said the Financial Times. Foreign fighters, including Chechens, are reportedly streaming across the border to help the separatists. That could encourage more pro-Kiev militias to arise, “propelling the region further towards chaos”.

The threat of civil war is real, agreed The Wall Street Journal. Moscow has appeared to welcome Poroshenko’s offer of talks, but President Vladimir Putin “continues to play the double game of publicly promising diplomacy while stirring up as much trouble as possible” inside Ukraine – he wants another “authoritarian satrapy”. Even without a “low-intensity war”, the new president will have an economic crisis on his hands.

The economy has been in recession since 2012 and is set to shrink another 5% this year. In April, it would have gone bust, but for a $35bn bailout by the International Monetary Fund, the World Bank and the EU.

The price of support is an austerity programme, including higher gas prices – gas subsidies have cost the government 7.5% of GDP each year and help explain why the budget deficit had blown out to an uncontrollable 12.5% of GDP, as Linda Yueh noted on BBC.co.uk.

To make matters worse, the slumping Ukrainian currency (the hryvnia) is stoking a rapid rise in import prices. Economic recovery in the near future looks out of the question, and social and economic hardship won’t make avoiding civil war any easier.

The crisis in Ukraine, along with Western sanctions, has also sent Russia into recession. But there are still some bright spots in Eastern Europe.

Merryn

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