At the heart of the on-going Ukraine crisis is the fundamental question of spheres of orbit. Should the Ukraine retain its historic links with Russia, moving politically closer to Moscow, or should it embrace new possibilities of stronger trade with the European Union? Former President, Yanukovych backed away from closer EU ties, leading to mass protests, loss of life and his own overthrow. The interim government wishes to see stronger trade ties with the EU, but this has angered Moscow and troubled many ethnic Russians – notably in the autonoumous region of Crimea where they are a majority of the population.
To the condemnation of the West, Moscow has sent troops into the Crimea to “protect the human rights” of ethnic Russians and a tense stand-off has ensued. The Crimea parliament has called for a snap referendum on Sunday to ask if it should join Russia – a move Ukraine and the West has deplored. The West has ruled out any military intervention, but made it clear that economic sanctions against Russia are very much on the cards.
Ukraine has significant financial difficulties and its financial ministry estimates that the country needs to find $35 billion this year. Against this backdrop, an offer from the EU to cut tariffs on Ukrainian imports that could save Ukraine up to €500 million is hardly a life-saver, but every little helps.
Announcing the offer, EU President Jose Barrosso noted: "The European Commission is committed and ready to support Ukraine to stabilise its economic and financial situation. This proposal is a concrete, tangible measure of EU support to Ukraine".
The initiative requires the approval of EU leaders and the European Parliament, the EU hopes to sign a free trade deal with Ukraine later in 2014. The bloc has also offered aid worth $15 billion over the next few years to Ukraine.