(10 years, 1 month ago)
Grand CommitteeRead Hansard Text Read Debate Ministerial Extracts
Baroness Falkner of Margravine
To ask Her Majesty’s Government what is their assessment of the political situation in Ukraine.
Baroness Falkner of Margravine (LD)
My Lords, I start by thanking the several noble Lords who have taken a Thursday afternoon out after a long week to take part in this debate. I will not have an opportunity afterwards, so I thought that I would get in my appreciation of this fine attendance on an important matter here and now.
In 2014, as we look back on the centenary of the Great War, a plethora of new books reminds us that events can be overtaken by miscalculation compounded by misunderstanding. When tactics supersede strategy, an inevitability takes hold. Against the memory of those historic events, it is important neither to underestimate the events in Ukraine of the past few months nor to overstate parallels with the Cold War or other analogies. At this point, we cannot know where the invasion of Ukraine by Russia will lead us.
However, we can be sure of certain things: whether this is an act of historical significance is not in doubt. It has marked a change in the world order. In the past 20 years there has been a debate about the change in power politics, evidenced in the demise of bipolarity, with unipolarity and the US moving to hegemonic status after the demise of the Soviet Union. Alongside this has been the challenge to its neighbours posed by the rise of China and, in response, the US pivot to Asia.
The question in international relations scholarship in the past decade has been whether we are seeing the emergence of a multi-polar world, but one where essentially western norms and values have prevailed, with buy-in from emerging powers into “western” institutions, or whether we are living in “no one’s world”, as described by the American academic Charles Kupchan, where no single overwhelming power is dominant and norms are in a state of flux.
The events leading up to 27 February, when Russia invaded and seized Ukraine’s Crimean peninsula, seem to point in the direction of a passing of the old order, or indeed, in the words of the Economist, the forming of a disturbing “new world order”. The invasion of a sovereign country other than as an act of self-defence or under international humanitarian law, sanctioned by the international community, cannot be a light thing, even when carried out by a former superpower wielding a United Nations Security Council veto.
The excuses given by Mr Putin in drawing parallels with NATO actions in Kosovo are absurd. In Kosovo, there was grave and present danger of a severe humanitarian catastrophe after evidence of widespread ethnic cleansing in the immediate region. Attempts were made to seek consensus in the UN Security Council but, in the face of a Russian veto and after some deliberation, it was decided to take action through NATO.
Even more absurd are Russia’s claims that the Government in Ukraine are illegitimate and that, hence, Russia will not enter talks. In Ukraine, after months of ongoing protests against the elected Government and more than 100 people killed—mostly at the hands of state security snipers deliberately shooting to kill—it was the Parliament which, on 20 February, approved a resolution calling for a return to barracks of the military and a ban on firearms. Once the police and military conformed with the vote in Parliament, Mr Yanukovych and his allies decided that the game was up and fled to Russia. On 22 February, the President was deposed for abandoning his duties and an acting President was appointed. From that point, it took a mere five days for Russia to take Crimea.
This is not the first time that an elected Government have been driven from office, and it will not be the last. Only a deaf and blind leader can cling on to office when all around him see evidence of egregious corruption, human rights abuses and kleptocratic governance. Of course it is preferable that there be constitutional measures, such as votes of no confidence, to oust those who command no support, but the fact remains that Yanukovych lost the support of his own majority in Parliament.
I turn to the here and now and the consequences of the events of the past few weeks. The most immediate are for the people of Ukraine. They have 40,000 Russian troops massed at their border with full logistical back-up support for invasion, including military hospitals. The threat is palpable. According to NATO, a Russian invasion could be accomplished in between three and five days, with the potential to take Moldova and Transnistria as well.
Alongside that are Ukraine’s economic woes. Without deep and structural reform, and with sovereign default on the horizon, the EU offer of a $15 billion loan is welcome. Ukraine’s currency fell by 30% between November and late February, and the Government are now running out of funds to cover public employees’ salaries. Although it is entirely understandable for the IMF to seek to protect its funds from corruption by sticking to its stringent conditions and reform agenda, it is surely somewhat dangerous for the fund and the EU to dither while Russia destabilises the interim Government from within, as well as starving them of energy.
I hope that the Minister will be able to tell us what conversations the Government are having with the IMF about a speedy allocation of funds and whether the UK is having conversations with the German Government about additional bilateral loan guarantees by those countries within the EU which can give—a coalition of the more solvent, perhaps, rather than a coalition of the willing.
There is also the present question of the Ukrainian elections on 25 May. What arrangements are being drawn up with the OSCE for the elections, which are now only some five weeks away? There has been gnashing of teeth in European capitals about the Kerry-Lavrov talks. In my book, they are a welcome development. They are less neo-imperialism and perhaps more pragmatism. EU foreign policy co-ordination is still embryonic. I experienced that myself last weekend at the Königswinter conference in Cambridge, where my German colleagues took a rather different view. “Our histories are different”, they said, “hence the lack of an EU strategic Russia policy”.
For Ukraine, after the formation of a new Government, it is imperative that that Government build a consensus for enhanced protection for minorities and entrench it constitutionally with strengthened regional autonomy. It is a relatively new state, and centralised structures seldom work when there is significant diversity in the population. Alongside Ukraine, we, the international community, should not write off Crimea. There is a tendency among policymakers to write off a land grab by Russia. There is an element of fuzzy historical referencing accompanied by a shrug of the shoulders.
I make it clear that I am not advocating a NATO invasion to free Crimea, despite the illegitimacy of its referendum and return to Russia. There has been a change to the territorial integrity of a sovereign state by its neighbour. Should that situation be accepted unchallenged, it presages similar attempts across the world. There will be few countries with minority populations across borders which cannot but worry about the consequences that will flow from Crimea. So every instrument of negotiation from asset freezes to sanctions and a recalibration of hard power as deterrents must be employed to sanction the aggressor.
The costs will be borne by us all, the Russians as well as the EU states, but the upholding of international law through sanctioning an aggressor may be the lesser cost in the long run. If by demonstrating that there is a united response from the West a negotiation can indeed be brokered with Russia along the lines that Crimea be reinstated within Ukraine, with an agreement that Ukraine be not given NATO membership for a period, that would appear to be the minimum acceptable outcome.
In concluding, I return to my opening remarks about the importance of upholding international law. Assurances need to be credible to be worth the paper they are written on. One casualty of the Crimean invasion is that there is less confidence in the West’s assurances in a post-Crimea world. This will undoubtedly affect our efforts to curb nuclear proliferation but will also diminish the West’s standing in a host of other matters.
Without being slavishly pro-American, there are many in the UK and Europe who have regretted the US’s increasing isolationism. Indeed, it was notable that last week was President Obama’s first visit to Brussels since his first election in 2008. While we have welcomed the closer trade links to flow from TTIP and, belatedly, a new emphasis on EU-US co-operation across foreign affairs generally, the events of the past few weeks, too, have illustrated the importance of hard power as a deterrent. It is evident now that we cannot neglect any of these aspects of power politics; it is better to learn those lessons now than allow an orderless world to emerge. I look forward to the Government’s response to these challenges.
Lord Giddens (Lab)
My Lords, I congratulate the noble Baroness, Lady Falkner, on having secured this debate. The situation in Ukraine remains extremely dangerous. The prime risk in my estimation is probably not further Russian invasion, although no one can write that off, of course, but a scenario in which events get out of control in ways that no one intended.
For the people of Ukraine, this is a time of hope, yet the problems to be coped with are just awesome. “Hope for the best, but plan for the worst” is the motto adopted by Ukraine’s new Minister for the Economy. It will not be political reform alone but the interaction of political and economic change that will determine which of these outcomes is most likely.
Simon Tilford from the Centre for European Reform has made a telling comparison of the diverging economic fortunes of Poland and Ukraine during the past 20 years. The Polish economy in 1990 was only 20% larger than the Ukrainian economy, but by 2001-02 it was fully three times as big—a quite extraordinary statistic.
I want to argue that three basic structural dilemmas will have to be resolved during the next two or three years in Ukraine if there is to be political and economic stability. First, how will the economic shock effects of the IMF’s reform package be managed politically? That package involves radical public sector reforms, higher oil and gas prices and a swathe of job losses. There will be an awful lot of pain before there is any discernible gain, and somehow that will have to be managed. Secondly, the presidential election is in late May, as the noble Baroness has indicated. How can progress towards democracy be reconciled with technocratic control imposed externally, because that is how it is going to have to be? We have seen from the example of Greece how such a process fosters extremism even in established democratic states, and Ukraine is not, of course, an established democratic state—far from it. Thirdly, devolution from Kiev is certainly necessary, but how will it be achieved without stoking up the forces of separation in areas with a high proportion of Russian speakers?
As noble Lords know, the Russian version of federalism for Ukraine is intended to dismember the country. What role will the UK Government seek to play in helping to resolve these core dilemmas, without which substantial progress in Ukraine is impossible? Does the Minister accept that a more integrated EU foreign policy will be needed in future, going beyond that established in the Lisbon treaty? One of the main things that has changed is that there is now an arc of instability going all the way round from the top of the eastern border of Europe, through the Middle East and north Africa and going below north Africa. That situation was quite unanticipated and is going to involve quite a reorganisation of political leadership on the part of the EU and the US to cope with it. I welcome the Minister’s views on that.
Lord Chidgey (LD)
My Lords, I, too, congratulate my noble friend on securing this debate and giving us another chance to look at these issues, which are obviously very serious. Prior to the recent vote of the UN General Assembly condemning Russia’s invasion of Crimea, it transpired that several countries were threatened with retaliation if they voted against Russia. The resolution was passed by 100 votes to 11, with some abstentions, in spite of the threats of retaliatory measures, such as expelling migrant workers, aborting gas supplies or imposing trade bans. Afterwards, a spokesman at Russia’s UN mission denied any threats had been made, saying:
“We never threaten anyone. We just explain the situation”.
To me, that sounds like a Mafioso making you an offer that you cannot refuse.
At more or less the same time, Vladimir Putin’s previous chief economic adviser, Andrey Illarionov, tells us that Putin’s real aim is to create “historical justice” with a return to the days of Tsarist Russia, reconquering Belarus, the Baltic states and, of course, Finland. He warned that Putin protects what belongs to him and his predecessors—Tsar Nicholas II and Stalin.
So what are we going to do? I would like to make just two points in the three minutes that I have. First, I have to say that I agree entirely with our Prime Minister when in the Hague last week he said that it was our,
“duty to embrace the new technique”,
of shale gas to reduce dependence in Europe on Russian energy, calling it a “wake-up call”.
In our earlier debate in this House on Ukraine, I called for the UK to believe the science and not to be persuaded or dissuaded by the politics. Natural gas was the origin of the crisis in Ukraine. Russia keeps Ukraine and much of Europe dependent on gas at prices just low enough to disincentivise fracking of shale gas. State-run media and propaganda continually spread disinformation critical of fracking and supportive of opponents to the process. As the president of the Association of Liberal Democrat Engineers and Scientists, I can say that its position paper on shale gas is absolutely on the button. There is no doubt that for the foreseeable future gas has to be the fossil fuel of choice, producing less carbon dioxide per unit of energy than the others. We agree totally with the conclusion of the Royal Academy of Engineering and the Royal Society that,
“the health, safety and environmental risks associated with …fracking … as a means to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced through regulation”.
So I ask the Minister if she could confirm in her reply that the Government are poised to remove potential legal barriers to the exploration and development of shale gas deposits in the UK and that the proposed growth Bill, which I believe will be in the Queen’s Speech, will include measures to change trespass laws to prevent landowners denying access needed to assess prospective shale gas fields.
My second point is that the UK must act in the financial sector, not just in response to President Putin’s actions but to restore a somewhat tarnished international finance sector. There has been a stream of allegations from sources in Ukraine that corrupt officials and business people have been laundering their funds through the UK, yet asset recovery has been insignificant compared with the problem. As a director of the advisory board of Transparency International, I am aware that the UK’s banking sector froze less than 1% of some £30 billion that the Russian Central Bank estimates left Russia as the proceeds of crime between 2010 and 2014.
Our financial authority believes that between £23 billion and £27 billion has been laundered through the City of London each year. The Anti-Corruption Foundation in Moscow has revealed corrupt activities regarding the Sochi Olympics and the Transnet Pipelines company, alone worth more than £12 billion.
My final point is that major changes are required if the UK is to detect, freeze and seize the corruptly obtained assets that are flowing undetected through the financial system. Clean up corruption in the City and hit Putin and his cronies where it hurts.
Lord Judd (Lab)
My Lords, this is an important debate. We are grateful to the noble Baroness who initiated it and indeed for the very wise things that she said in her own observations.
I suggest that we see this terrible crisis as symptomatic and that we take a moment or two to look at history. The story of the struggle for identity in Russia has gone on for centuries. Is it to be a Western-orientated power when the prevailing language is French in St Petersburg, or are we to search for the soul of Russia, never quite identified, somewhere behind?
In that context, the role of the “strong man” has become crucial. In Russia there is a KGB elite exercising ruthless power, and consequently there is a lot of corruption. What is happening now is not new in human history: it is in part a great diversion to keep the Russian public distracted from the injustices and imperfections of their own society. We have seen this in the erosion of human rights, in the curbing of the freedom of the media and in the oppression of civil society.
What Putin did in Crimea is obviously wrong; it was a blatant breach of the international rule of law. It is difficult, though, and we must all confess this, to think of any referendum organised in any other circumstances in Crimea that would have resulted in a different conclusion. We have to accept that, and that takes us into deep waters. When we preach about the virtues of self-determination and the rule of law, we need a little humility because the world looks at us and says, “Hey, hang on a moment. What about Iraq? There was no specific UN Security Council resolution”, “What about Guantánamo Bay, which is still operating?”, and, “What about rendition, whose issues are still unresolved?”. Yet we go around preaching as though we were the centre of virtue in the world.
We need to get back to a sense of the international struggle together to reassert the importance and indispensability of human rights and the international rule of law. No matter how terrible this crisis, it may give us a good opportunity to start rebuilding together. But we will not do that by preaching; we will do it by dialogue, conversation and engagement. However, we must stand firm. It is clear that we cannot just have a breach of international law as has happened on the Crimean issue. If we then move on to talk about sanctions, though, for God’s sake do not let us posture in a hollow way that is not credible. We have to see the sanctions through, even if that means facing up to the issue of the southern pipeline.
The paradoxes are also strong, and they need to be frankly put to the Russians. I was deeply involved in the whole story of the north Caucasus. There, the Russian line was that self-determination was not acceptable and they ruthlessly repressed it. Now we suddenly hear from them that self-determination is central to any way forward. Again, we must examine our own record. We did not speak out strongly enough on the north Caucuses, so where is our credibility here? We also have to look at our failure on issues of human rights and civil society in Russia to be anything but rather muted in our comments.
We must stand firm, but in a context of somehow rebuilding some kind of dialogue. To those who say that it is simply a matter of telling the Russians what they must do, I say that as we are not going to invade Russia or to go to war with Russia, how the hell are we going to get this right in the long run if we do not get into some sort of mutuality? That means that if the Russians suggest that it is appropriate to think of federation, we do not automatically dismiss it because the Russians said it but, in the context of the ethnic challenges, look at whether we have to examine the proposition.
Lord Dykes (LD)
My Lords, I very rarely disagree with the noble Lord, Lord Judd. I agree very much with his exhortation that we should not carry on preaching. Time is very short, so all I have time for is to refer to some aspects of the historical past and the United States’ policy on this matter because there were faults everywhere in the long lead up to what has happened.
I congratulate my noble friend Lady Falkner on launching this debate. I would embarrass her by commending the thoughtfulness and restraint she has shown on this matter in recent weeks. John McCain and other people would probably like a third world war—perhaps that is an unfair comment on John McCain, but there are some people who would relish the idea. They are a tiny minority, thank goodness, and most people are being very sensible and empirically restrained on this matter.
If you go back to the end of the Cold War, there is a link with the United States and the inconsistency of American leadership in these matters. It is no good us being slavish supporters of everything the United States does. That has been a great mistake for Britain. I hope we will get away from it if we become once again a self-confident member of the European Union. At the moment, we are in transition from nervousness to panic about UKIP and all that, but we need to get our self-confidence back and be a strong, active member of the European Union.
NATO is taking the lead. I think what has been done so far has been correct. Russia has quite rightly been condemned, but the inconsistency in America has been there. When the Cold War ended, we saw the reaction to the end of the Soviet Union. The humiliation that Russians experienced at that stage was enormous, but instead of us being sympathetic to that psychologically and supporting Russia as a great world country, even if not a leading world power, we were very aggressive and critical about Russia and all its aspects, particularly Russian civil society, and said that there was nothing good about Russia. Everything was wrong there and suspect, although there are things to worry about, as my noble friend Lord Chidgey said. I think the Russians probably expected us to do the same as them. They folded up the Warsaw Pact. We carried on with NATO. I think Putin also expected that NATO would finish, but we found artificial out-of-theatre excuses to carry on with NATO. These things have to be accepted empirically and objectively. I am not talking down our Western cause because that is the priority for all of us.
When the promise was made to Gorbachev, and I think repeated to Putin and to Yeltsin as well, that there would not be a NATO country next to Russia, that solemn promise was breached by the West and NATO. These things are facts. You can imagine that someone with the personality of Putin would react in the wrong way, aggressively, to those things, but I hasten to add that that does not condone what has happened in Crimea. The referendum is a reality. We have to accept it. If Russia were foolishly to go further than that into new territories or attack Ukraine, it knows that that would be madness. We hope and pray that this is the end of this affair, so far. It is not easy to see how it will work out in the longer term. There may be a reconciliation between the more democratic Ukraine and Russia as the end result. That would be a very good result.
The inconsistency of American policy in the Middle East peace process has allowed 35 vetoes since 1967 and has allowed Israel, a wonderful country with wonderful people but a lousy Government, to disobey international law all the way through and get away with it. Quite rightly, Saddam Hussein was expelled from Kuwait after one year by the international community. However, Israel has been in the Occupied Territories for nearly 50 years and nothing has been done about it. People notice these things. There is an idea that John Kerry will suddenly come along and say, “Well, I hope you didn’t notice what happened before but we’re now going to solve it”, but there is now a complete vacuum. Netanyahu will not co-operate. You have to have a sensible Government. It is no wonder that young Israelis have gone to live in Berlin: they are fed up with the situation in Israel with its extreme policy. Therefore, the United States’ leadership has been weak and inconsistent. It needs to be better in the future and then it can claim to be perhaps not the exclusive leading world power but a very important country.
Viscount Colville of Culross (CB)
I, too, thank the noble Baroness, Lady Falkner, for obtaining this debate. I was the BBC “Newsnight” producer in Moscow during the fall of the Soviet Union and I have been back to both Ukraine and Russia many times since then. Therefore, I share your Lordships’ great concern about the events that have been taking place. However, it seems to me that one of the battles on which we really have to concentrate is for the hearts and minds of the Russian-speaking people of Ukraine. If we can build a country which is politically and economically stable, as the noble Lord, Lord Giddens, mentioned, it will be a country in which all its citizens, including the Russian speakers, will want to live.
For the past 20 years, Ukraine has been increasingly dysfunctional—a trend which has accelerated in the past three years as corruption has extended into almost every aspect of Ukrainian life and there has been a destruction of the rule of law. We now have to channel the energies released by the events in February to create a democratically accountable Government who are supported by an independent judiciary and an accountable police.
The Ukrainian Government have set up an anti-corruption body, which is trying to think about how to introduce transparency into government. It is going to need a lot of support from our Government and the Governments of the EU. Open government depends on publishing reliable data about expenditure and income. An open procurement policy makes it harder to hide bribes and overprice contracts. I have spoken to DfID, which obviously has the gold standard on this and is well known for leading the way in open government and open contracts. It said that it has had someone in Kiev assessing the situation and looking at what can be done. I should like to ask the Minister what else can be done to make sure that DfID’s expertise can be rapidly deployed to help the Government in Ukraine to establish themselves as transparent.
One of the worst areas of corruption has been the subsidising of domestic gas prices so that they are eight times cheaper than those charged to industry. As a result, it is estimated that last year alone $2 billion-worth of fraud was perpetrated as gas was diverted towards business, with businessmen pocketing the difference. As the noble Lord, Lord Giddens, said, the IMF package includes a 50% rise in the cost of Ukraine’s domestic gas, to take effect from May. This will hit many people on low incomes very hard. The country has an average income of $6,500 a year and, without some kind of safety net, I am concerned that the price hike is going to stoke discontent and inflame the eastern provinces in particular. Surely western Governments can contribute to any safety net to help to smooth this transition period while the price rise takes effect.
A transparent Government and business sector are important, but they go hand in hand with the implementation of the rule of law. Ukraine’s 1996 constitution emphasises the importance of the rule of law and specifically states that all citizens are subject to universally applicable laws. However, for the past 20 years these laws have not been implemented by either the judiciary or the police. The trend over the past few years of President Yanukovych’s rule has been to incorporate the judiciary into the executive arm of the Government. One of the country’s leading legal experts said that court decisions were decided by a phone call from the presidential administration.
The EU countries of eastern Europe have huge experience of transforming the judiciary from being an organ of government and the Communist Party to being independent. After major reforms of the institutions and personnel, the judges in much of eastern Europe are exercising impressive independence. Surely we should ensure that this experience is shared with the Ukrainians to help them to build similar institutions.
Likewise, anyone who has been to Ukraine, which I have, and has suffered from the corruption of the police—particularly the traffic police—will know that the corruption is universal. Nobody trusts the police. They are there for their own good and not for the good of the law. That, I think, is the view of most people in the country. It is interesting to look at what has happened in Georgia, where they fired all the police force at the basic level, re-recruiting from universities and training them. They looked really carefully at the hierarchy. That has been quite effective.
Democratic accountability cannot be imposed on Ukraine from the outside. The Ukrainian people have to come together and coalesce around a determination to build a country worth living in. We in the West can do many things to help and advise the Ukrainians in this long and difficult task. I urge the Minister to ensure that our Government do everything they can to help this process.
Lord Skidelsky (CB)
My Lords, I, too, congratulate the noble Baroness, Lady Falkner, on having secured this very timely debate, although I fear that my analysis will diverge from hers and, indeed, from that of most other noble Lords who have spoken—not from all of them and not from all their analysis, but partly.
I want to make three points. First, it is a serious mistake that the West has refused to concede any form of Monroe doctrine to Russia, even in respect of countries which until very recently formed part of the historic Russian state. That is completely unrealistic. Rather, it has actively sought to prise those countries from Russia’s orbit, using as its instruments NATO expansion and financial and logistical support for Russophobe movements in newly independent adjacent territories, not excluding those groups tainted with extreme nationalism and anti-Semitism.
The fact is that international law, of which we all speak and which we all of course support, is a necessary but not a sufficient condition of international order, and the West, which preaches it relentlessly, has ignored it whenever it has suited it to do so. I think that the West has never stopped to consider how its policies are viewed in Moscow, or indeed by most Russians, even those strongly opposed to the Putin regime. It is not just this one man who has power-mad ideas; his views on what western policy has been, certainly in the past 10 or 15 years, are strongly supported by most Russian people. I believe that the West made a historic mistake in not disbanding NATO after its work was done and replacing it with a new European security system which included Russia. These things are all coming home to roost.
Secondly, I have to ask what the purpose of sanctions is. Are they supposed to punish Russia for annexing Crimea or to deter it from future “escalation”? If the former, they are surely pointless, as the deed is done. Do the Government seriously expect that Crimea will be returned to Ukraine? It will not be. If the object is deterrence, what is it that Russia is to be deterred from doing? Can the Minister answer that without retreating into obfuscation?
The western response to the crisis casts Russia in the role of aggressor. However, I agree with Peter Lieven when he writes:
“The danger comes from the possibility of clashes between the Ukrainian nationalist and neo-fascist volunteers who led the overthrow of the previous government in Kiev and opposing Moscow-backed pro-Russian volunteers in the east of the country”.
In other words, the danger lies in the disintegration of the Ukraine state—a point that has been perfectly accurately made by other noble Lords. Peter Lieven adds that if they get out of hand, such clashes could lead to Russian intervention, war and the partition of Ukraine.
My final point is that, if we are seriously concerned to avoid such a disastrous sequence, we should not be calibrating our hard power instruments, as the noble Baroness, Lady Falkner, suggested, but working with the Russians to preserve a viable Ukrainian state. The Russians have presented their own ideas on how to do this, which should be seriously and urgently tested. Broadly, they propose a “neutral” Ukraine on the model of Finland and a federal state on the model of Switzerland. I think we have already had suggestions in this debate that have pointed in that direction. The first would exclude Ukrainian membership of NATO but not Ukrainian membership of the European Union. The second would aim to secure a new constitutional settlement through practical guarantees of minority rights. I will not go into that because I do not have time. Financial aid from both Russia and the EU would be conditional on Kiev’s acceptance of such a settlement.
Will such a sensible solution come to pass or will bloodshed, disintegration or something much worse come out of it? A sensible solution will probably not come to pass. I fear that we are too legalistic and moralistic to do what is required, but we can only hope for the best.
Baroness Morgan of Ely (Lab)
My Lords, the crisis in Crimea and Ukraine is probably the biggest security challenge we have faced in Europe for a generation. We hear from NATO sources that around 35,000 Russian troops are massed near the Ukrainian eastern border along with tanks and special forces. They have the logistical back-up to keep them there for some considerable time, and although we have heard recently that Russian troops are being withdrawn, we need to be on our guard to ensure that this is a significant pull-out of troops rather than a rotation of forces. Either way, we are a long way from seeing the end of this crisis and its consequences.
Putin’s speech on 18 March was unforgiving in its tone and aggression, but it is worth listening to it to gain an understanding of the sense that Russia needs to feel strong again and the humiliation that it felt after the break-up of the USSR. Of course, Russia would love to feel powerful again. Its initial moves to establish a new customs Eurasian trade bloc have been thwarted by the Ukrainian public, who made it clear that if there was a choice they would rather have a customs union with the EU. Russia has broken with the tradition that has developed since the end of the Cold War that assumes that disputes will be settled in Europe by diplomacy rather than military might. We were starting to be complacent in the belief that the only real currency of power in Europe was its economic rather than military might.
The crisis offers a test for two international organisations in particular—the EU and NATO. If they play it well, using deft and delicate diplomacy, we could see the situation settle. If they play it badly, it could have catastrophic consequences for Ukraine and the world.
The EU has now signed an association agreement with Ukraine promising co-operation and convergence over policy, legislation and regulation across a broad range of areas. Gradually and over time, therefore, the trade relationship between Ukraine and the EU—its second biggest trading partner after Russia and responsible for a third of Ukraine’s external trade—will be anchored in a market system that will insist on converging standards, both commercially and in terms of the values of the European Union such as democracy and the world of law. That pathway has started already. The EU loan was mentioned by the noble Baroness, Lady Falkner. I am very pleased that she initiated this debate, and I thank her for her insightful introduction. But in the long term, we should see economic stability in the country and the rule of law that the noble Viscount, Lord Colville, and my noble friend Lord Giddens talked about.
The EU has to act as one on the issue of Russia if it is to maintain any leverage. The energy vulnerability of the continent means that it can proceed only with extreme caution as 30% of its gas imports are from Russia. That is worth £60 billion to the Russian economy, so the EU has an important lever.
We do not need just to reset the energy market in the UK. We need to reset it in the EU as well. We have been talking about it for a long time. The initial energy debate in the EU started when Russia turned off the taps to Ukraine in the early 2000s. We have tinkered about with it, but we have not really taken the energy issue within Europe very seriously. This should be a call to action. However, we have to be very careful not to provoke Russia into isolation in Europe in the long term. Russia, understandably, does not want to feel hemmed in. That is why it is crucial that NATO desists from offering Ukraine full membership of the organisation. NATO promised Gorbachev, after German reunification, that there would be no future expansion to the east. That promise has been broken time and again. I am sure that many of the old Eastern bloc countries are quite pleased at the moment, especially those with Russian minorities, that that promise was broken, but we have to understand the importance of making sure that NATO does not welcome Ukraine as a full member.
In 2010, the Ukrainian Parliament voted to exclude the goal of,
“integration into Euro-Atlantic security and NATO membership”.
The two international organisations now need to show their mettle and their commitment to long-term stability in Europe in the forthcoming weeks. Yes, a strong message needs to be sent to Putin that tearing up international agreements and breaking international law is totally unacceptable and that there are and will be consequences, but we must be careful not to give any excuse for inflaming a situation that could lead to tragedy on our EU borders. If we manage that, we could end up with our ultimate goal: a democratic, open and liberal Ukraine, which is free from corruption and does not bully minorities, and a Russian neighbour that does not feel threatened by encirclement and will come to terms with the loss of empire. The Government continue to enjoy Labour support for the way they have handled this crisis so far.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)
My Lords, I start by thanking my noble friend Lady Falkner for organising this debate and for the opportunity to update the House once again on the political situation in Ukraine. I also thank the noble Baroness, Lady Morgan, and the Benches opposite for their support in what has been an incredibly difficult time in terms of ensuring that diplomacy succeeds.
As noble Lords are aware, this House last debated the ongoing crisis in Ukraine and Russia’s illegal and wholly unacceptable annexation of Crimea on 18 March, and I updated the House on 25 March in replying to a Question. Her Majesty’s Government, working in close partnership with the European Union and an incredibly broad range of allies from across the international community, have continued to take incremental steps to ratchet up the pressure on the Russian Government in response to their continued violation of international law. As my right honourable friend the Prime Minister said last week, their actions are a direct challenge to the rule of law around the world and should be of concern to all nations.
A great deal has been said in our debates about Russia’s motivation for the rapid illegal annexation of Crimea, Putin’s motivation and his view of Russia’s place in the world. Those matters have been discussed today. The noble Lord, Lord Howell, rightly said in a previous debate that Russia’s strategy belongs to the 19th century, not the 21st century. It cannot—it will not—go unanswered. However, our actions must, of course, be of this century: they must be measured, proportionate and always mindful of the need to encourage peace and stability rather than conflict. Our fervent wish for Ukraine, and for Russia, is that their peoples can live in a peaceful, stable and secure environment. Russia’s actions are achieving the opposite. Putin would have us accept that a historical mistake has somehow been corrected with the illegal annexation of Crimea and that it is the will of the Crimean people. However, this is not the view of Her Majesty’s Government or, indeed, of most of the free world. It was a land grab, achieved via a sham referendum under the threat of Russia’s military might. We must commend the Ukrainian Government’s restraint under such pressure.
I hear what the noble Baroness, Lady Morgan, said about Russia and isolation, but isolation in the global community is one of the levers that the international community has. The international community not recognising the illegal annexation of Crimea is a first step. A recent resolution at the United Nations General Assembly saw 100 nations affirm their commitment to Ukraine’s territorial integrity. Only a handful of nations voted with the Russian Federation against the resolution, including Zimbabwe, Cuba and the Democratic People’s Republic of Korea. I fear that Russian intransigence means that we must prepare for the long haul on this issue. We must show the strength of our convictions as a country, and with our allies, by maintaining our position and our actions. To this end, the Foreign Secretary met the Ukrainian Foreign Minister on 1 April to demonstrate UK support for Ukraine.
The European Council on 20 and 21 March announced further sanctions, bringing the total of those facing asset freezes and travel bans to 33. At the same Council meeting, the European Union, member states and Ukraine signed the political chapters of the association agreement, which again have been referred to today. That represents a very visible commitment on the part of the Ukrainian Government to a closer relationship with the EU, and to EU norms and values. For their part, the EU and member states’ signature of the association agreement represents their commitment to assist Ukrainian reform to make these aspirations a reality. To that end a proposal on a package of support potentially worth $14 billion to $18 billion will soon go to the IMF board.
NATO and Ukrainian Foreign Ministers met on 1 April in a further demonstration of international support for Ukraine. They agreed to suspend indefinitely all civilian and military NATO-Russia Council activity, except ambassadorial level dialogue and above. At this time of crisis it is absolutely right for us to step up activities that provide reassurance and confidence for NATO allies without provocation. NATO has worked hard to build a constructive relationship with Russia but Russia, through its actions in Ukraine, has forced us to step back from our previous level of engagement. As the Prime Minister made clear, it would be wrong for the G8 summit to go ahead in Sochi in June. G7 leaders will instead meet in June in Brussels, without Russia present. This demonstrates further the cost to Russia of its policy on Crimea.
It is tragic that Russia, so close culturally and ethnically to Ukraine and with whom it has shared so much history, should impinge on Ukraine’s sovereignty. We once more urge Russia, as we have done, to seek urgent ways to de-escalate the critical situation in Ukraine and to engage with the Ukrainian Government to address their concerns. We are concerned about the visit to Crimea by the Russian Prime Minister on 31 March, which was particularly unhelpful in relation to de-escalation. Solutions imposed at the point of a gun have no hope of resolving a crisis which can and should be resolved by diplomatic means. We are resolute in our determination to support the right of the Ukrainian people to make their—
Lord Skidelsky
Is the Minister really saying that the annexation of Crimea was against the wishes of the Crimean people and that, had they been free to do so, they would have overwhelmingly rejected it?
Baroness Warsi
What we have said consistently and in direct reply to that is that we cannot accept any referendum held with no preparation and down the barrel of a gun, without really an answer on that ballot paper to vote “no”, which were the two options given. If, in due course, there was a referendum appropriately held with the necessary constitutional backing in the right way that referendums are held, I do not think that anybody would dispute people having their right to self-determination. We are resolute in our determination to support the right of the Ukrainian people to make their democratic choices about the future of their own country. I think we would all agree that the way it was done was not acceptable.
Key questions to which noble Lords quite rightly returned are how we now frame our relationship with Russia and how to address Russia’s concerns about the intentions of the West. The crisis in Ukraine is the most serious test of European security so far this century. Russia’s actions cast a menacing shadow across the continent of Europe. Without swift and significant steps by Russia to de-escalate the situation, the Government remain resolute in determining that our relationship with Russia can be seen only through the prism of an illegal and ill-judged incursion into Ukrainian territory.
The actions we and our allies have taken are proportionate and it is clear that their impact is already being felt. Indeed, the noble Lord, Lord Skidelsky, asked about sanctions. The European Union has adopted unprecedented sanctions against Russia, including asset freezes and travel bans. Preparatory work is already under way for more far-reaching European Union sanctions, including economic and trade measures. These sanctions are a message and a warning to the Russian Government. We want Russia to enter direct talks with Ukraine and we will continue to work with our international partners to find a diplomatic solution to this crisis. These sanctions are a part of that.
The noble Lord, Lord Judd, spoke about the need for dialogue with Russia. We absolutely agree with that. The noble Lord is right: dialogue with Russia is key. We continue to engage with Russia to try to find a solution to the current crisis. My noble friend Lord Dykes said that we need to work towards a positive outcome. A positive outcome is an increase in democracy in both Russia and Ukraine. We are doing what we can to support that in Ukraine.
We continue to choose our actions with a long-term strategy in mind. As members of the EU, we have enjoyed the longest period of peace and stability in European history. Our NATO alliance has stood the test of time to become the most successful military alliance ever.
To echo the words of my right honourable friend the Foreign Secretary, we are not asking Ukraine to choose between Russia and the West. We are saying that Ukraine should be free to choose to strengthen links with either, both or neither, but only Ukrainians themselves can decide their future. However, we can give Ukraine the support that it requires. My noble friend Lady Falkner asked what conversations we had already had in relation to IMF assistance, for example. Ukraine and the IMF reached a staff-level agreement last week on a two-year standby arrangement, supported by the international community. That will potentially unlock $27 billion. The IMF contribution will be between $14 billion and $18 billion, depending on other bilateral and multilateral contributions. As I said earlier, the agreement is expected to go to the IMF board—the executive board—next week.
I think that the noble Lord, Lord Giddens, asked how IMF payments will be managed. I am sorry; I cannot read my own writing. We recognise that there will be pain in complying with the IMF conditions for assistance, including the need to increase domestic gas tariffs. The Government of Ukraine inherited a country in dire need of economic and political reform. The Government of Ukraine have committed to making this difficult reform and the UK and our international partners stand to assist in this. Of course, the conditionality of the IMF agreement is important because we know how many IMF programmes have in the past failed in Ukraine. Therefore, reform in relation to gas tariffs, governance and the financial sector are part of that package.
The noble Viscount, Lord Colville, asked about the role of DfID. The initial UK package of £10 million, which was announced a few weeks ago, is being put forward in co-ordination with DfID. We are working closely with international donors to see where expertise can best add value. DfID anti-corruption work is being done, in addition to the work being done by technical teams in Kiev, to identify where the UK can support energy and social reform sectors.
My noble friend Lady Falkner asked about arrangements for elections. The OSCE will monitor the Ukrainian elections which are due to take place on 25 May. About 100 long-term election observers are already in Ukraine. Short-term election observers will follow. The UK is contributing to the monitoring mission and is urging the Ukrainian Government to do all they can to ensure that the elections are free, fair and carried out in accordance with international norms.
The noble Lord, Lord Giddens, asked about devolution and Russian federalism. As I said, the future of Ukraine is for Ukrainians to decide. Russia should respect Ukraine’s sovereignty and not seek to impose systems of governance on it which are not agreeable to the Ukrainian people. I agree with the comments of my noble friend Lord Chidgey regarding work in relation to the energy sector. The Government are, of course, discussing plans on the exploitation of shale gas in the UK as we speak.
I agree with the noble Baroness, Lady Morgan, on the need for wider EU action. We task the European Commission to prepare measures which will bring far-reaching economic consequences if Russia takes any further steps to destabilise Ukraine and, by June, to produce a comprehensive plan to reduce Europe’s dependency on energy from Russia. However, I agree that more needs to be done, and it needs to be done quickly. My noble friend Lord Chidgey also spoke about corruption and tackling assets which could potentially pass through London. I have a comprehensive answer on that but, in light of the time, I will write to him giving a detailed response.
In conclusion, Russia does have a choice to make: to take the path of de-escalation or face increasing isolation and tighter sanctions. President Putin should take notice of the clear, united and resounding message emanating from every democratic Parliament, including, of course, the mother of all Parliaments here. I am grateful to noble Lords for their contributions in reinforcing that message today. Every diplomatic channel remains open. Nothing that has been done cannot be undone. We and our allies continue to urge Russia to show its strength in ending this crisis.