David Marples

Last August, Russian president Dmitry Medvedev sent a letter to his Ukrainian counterpart Viktor Yushchenko effectively breaking off relations with the neighboring state until a new president had been elected. Just eight months later, Medvedev is celebrating a deal with Ukraine’s new president Viktor Yanukovych that will keep the Russian Black Sea Fleet at the naval base of Sevastopol for at least 25 more years after the current lease expires in 2017.

How did Russia manage to gain such a deal? And who are the beneficiaries?

The Russian Black Sea Fleet has been at the Sevastopol base since 1783 and has fought wars against the Turks, British, French, and Germans over the years. In 1991 its future came under consideration as it found itself part of an independent Ukraine. Eventually about 80% of the ships went to Russia, which signed an agreement with Ukraine in 1997 for a 20-year lease of two Black Sea bays at Sevastopol for a payment of around $98 million per year.

Yushchenko had indicated his reluctance to extend that lease, pointing out that according to the Ukrainian Constitution, no foreign military installations are permitted on Ukraine’s territory. The presence of the Fleet and its use in Russia’s war with Georgia in August 2008 was a bone of contention between Yushchenko and the Russian leadership. He also evicted Russian security agents operating in Sevastopol late last year.

The current agreement represents a stunning volte-face on Ukraine’s part. The deal was evidently elaborated by Vladimir Putin and Ukrainian Prime Minister Mykola Azarov and signed in Kharkiv on April 21. Medvedev, rather than Putin, was the official signatory but there is little doubt of the latter’s crucial role in formulating the contents. The two parliaments, it was reported, may ratify the agreement as early as April 27.

Russia has agreed to reduce the cost of gas exported to Ukraine by 30% until the year 2019, which will save Ukraine expenses estimated at $40 billion over the next decade. In 2010, Ukraine will pay $230 per 1,000 cubic meters of gas compared to an originally anticipated $334. In return Ukraine agreed to increase its imports of gas by 10% this year and extend the lease for the Russian Fleet for a further 25 years, i.e. until 2042.

To most outsiders the deal seems heavily weighted in Russia’s favor. Until 2017, Russia can continue to deduct the price of the lease from monies owed by Ukraine for gas since the early 1990s. After that time cash payments will be made, but the agreement will only last for two further years. In the remaining 23 years, Russia can theoretically raise the price of gas again.

Ukraine, by contrast, is already paying well above market prices for gas. More important, it is allowing a foreign state to occupy a key strategic base indefinitely. Ukraine’s prospects for future membership of NATO, which could reemerge after the end of Yanukovych’s tenure, now seem dim indeed. Russia intends to modernize and expand the fleet, and stresses its role in combating piracy off the coast of Somalia as evidence of its international usefulness.

Yanukovych manifestly failed to negotiate on Ukraine’s behalf. It is inconceivable why his starting point was not a five-year extension of the existing lease, which was stipulated as an option according to the 1997 agreement. There is also no logic to his ready agreement that the lease of a military base be linked to payments for gas. There is no indication that Russia intends to halt construction of its Nord Stream pipeline, which would bypass Ukraine in the transport of Russian gas to Western Europe.

The Kharkiv agreement practically nullifies Ukraine’s ability to conduct an independent foreign policy. And only the most naïve observers would anticipate that the deal clarifies the future of Russian-Ukrainian relations. Putin, Moscow mayor Yuri Luzhkov, and dozens of MP’s in the Russian Duma have dismissed the 1954 transfer of Crimea to Ukraine as an anomaly. They have also declared that Sevastopol will always remain a Russian city. More pressure could soon be put on the pliable Ukrainian president.

The agreement instantly divided Ukraine. It is supported by the Regions Party, which has a small majority in the Parliament, but has outraged other factions, including Our Ukraine and the Tymoshenko Bloc. The former has called for Yanukovych to be impeached. Whether the president has enough support to win ratification as early as next week remains to be seen.

Despite his April meeting with US President Barack Obama, resulting in the decision to remove highly enriched uranium from Ukraine by 2012, Yanukovych has been dismantling his predecessor’s legacy with bewildering speed and lack of respect for formalities or rules. He gained a majority in parliament by ignoring the law on factions and persuading individual delegates to switch their support to Regions.

The presidential web page on the 1933 Famine disappeared promptly after Yanukovych’s electoral victory, allegedly because of “technical difficulties” (a typical Soviet phrase) and his appointment of Dmytro Tabachnyk as Minister for Science and Education seemed calculated to inflame Western Ukrainians in particular. Tabachnyk published an article in Izvestiya last year claiming that residents of this region were not really Ukrainians and had different values from people in “Greater Ukraine.” A parliamentary vote to remove him failed narrowly in late March.

In Kharkiv, Yanukovych once again demonstrated his disdain for the current Constitution. In the short term, he might have improved Ukraine’s financial standing, but he has tied Ukraine’s military and security future to that of Russia, undermined its independence, and divided the country more than his hapless predecessor managed after five years in office.

An earlier version of this article appeared in the EDMONTON JOURNAL and KYIV POST



Distinguished University Professor, University of Alberta


  1. Pingback: Don’t Panic! Ukraine ’shuts down’ schools over ‘Swine Flu’ | Snafu Blog Daily Information

  2. Ho

    Hope they settle all in peace and not pieces

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