In 1945, the World War II allied leaders met at Livadia Palace in Yalta, to establish a new world order.
For the last seven years, the same Crimean city in Ukraine has hosted European politicians, economists and others for the “Yalta European Strategy” set up to promote democratic values and Ukraine’s possible EU membership.
This year it focused on the question: Should Ukraine should move East or West?
Addressing Western policymakers, President Victor Yanukovich said he regretted the slow progress there has been in moving closer to the European Union: “Ukraine has no alternative to choosing Europe, but as the EU is not ready to even discuss Ukraine’s membership, we will choose our own ways and methods of integration, according to our own national interests.”
The EU refuses to give Kiev a clear timetable for when it might join.
For the moment, Brussels is talking only about an Association Agreement.
The European Commissioner for Enlargement, Stefan Füle, explained what is going on: “We have, at the beginning of October, a meeting of our negotiators. This is a very complex agreement, this is not just about free trade. This agreement is offering Ukraine access to the internal market of the European Union. We need to be aware about the value added of that deal, the pluses and minuses for each side.”
While Brussels considers the first steps towards integration, Ukraine and Russia have reconciled since Viktor Yanukovich was elected president.
In September, Yanukovich and Russia’s President Medvedev took part in a vintage car rally on their border, symbolising the thaw in relations after five years of tensions.
This year Moscow sent a substantial delegation to the Yalta gathering.
Russian Finance Minister Alexei Kudrin told euronews of progress in bilateral relations in various areas.
He said: “I have already said that we have invited Ukraine to take part in the Eurasian Economic Community Crisis Fund. If Ukraine were to join the fund, in general terms, it would be able to receive aid. Moreover, as Russia’s representative to the IMF, I have made efforts to persuade the IMF to provide loans to Ukraine.”
In the energy sector, Ukraine, however, would like Europeans – rather than Russians – to modernise and help run the transit system that takes Russian gas to Europe.
The Europeans are reluctant. British expert Alan Riley, from City University London explained why: “One of the difficulties for Ukraine, is why would the Europeans invest in it, if we can get gas from LNG (Liquefied Natural Gas), from shale, we can get gas from Norway, through Northstream and Yamal One, what it the case for gas through Ukraine? It’s less about transit than the Ukrainians developing their own, very significant, gas resources and selling their gas into the European market.”
On the East v West question – Ukrainian decision makers say there are more urgent priorities than “choosing sides.”
What does Viktor Pinchuk – the organiser of the Yalta gathering – think?
“We need to implement reforms that we need in any case. Once we carry out those reforms, we’ll be moving along the right track and we will be needed by everyone, and then we’ll be able to choose who we want to be with.”
But right now Ukraine is reliant on IMF loans, which will only continue if there is progress in cutting government spending to bring the fiscal deficit under control.