|Ukraine PM Mykola Azarov hailed the deal with Russia.|
Accepting Russia's offer of a supposedly no-strings-attached, $15 billion loan-and-cheap-energy supply package was the only way to head off a national disaster, Ukrainian officials said today, whilst anti-government demonstrators--backed by the United States and the EU--were quick to denounce the deal. The leader of a radical rightwing party/neo-Nazi party, for example, accused Ukraine's President Viktor Yanukovych of treason.
Opposition to the agreement with Russia is strongest in Ukraine's West; the industrialized East historically leans towards Moscow. However, even in the West, many people quietly question the price of an EU embrace. As Time magazine's Jakob Parisinski recently pointed out, an EU trade deal would involve the same sort of savage spending cuts--so-called austerity measures--which have deepened the recession and worsened the unemployment crisis across Europe.
Ukraine would need to commit to drastic reforms—slashing state subsidies and social spending while also devaluing the currency—and the effect could be catastrophic for the working class in Ukraine. Similar reforms were used in the 1990s to force the transition from communism to capitalism in Poland, Russia and across the former Soviet Union. Known as shock therapy, these reforms led in most cases to hyperinflation, wiped out people’s savings, and caused a spike in unemployment as inefficient firms were forced to shut down.