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Glazyev Warns EU Association Agreement "Economic Suicide" for Ukraine, as Poroshenko Rushes to Sign It

June 25, 2014 (EIRNS)—Even as urgent diplomacy is under way to stem the bloodshed in eastern Ukraine and nearly half a million people have fled the country, President Petro Poroshenko plans to sign the economic section of Ukraine’s Association Agreement (AA) with the European Union, day after tomorrow. It was the decision last November by his since overthrown predecessor, President Victor Yanukovych, to suspend negotiations on the AA on national security grounds, that triggered the months-long coup process and civil war in Ukraine. The political part of the AA was signed by the interim post-coup government in March. Today, Poroshenko described his intended act as follows: "On June 27 in Brussels, in the presence of the heads of state of the European Union, Ukraine will become a full-fledged associate member of the EU."

In reality, there is no such status as "associate member" of the European Union. The AA pivots on a Deep and Comprehensive Free Trade Agreement, which saddles bankrupt Ukraine with a slew of new obligations. Prominent economists continue to warn that the terms the AA will be catastrophic for the Ukrainian economy.

On June 23, Doctor of Economics Natalia Vitrenko, leader of the Progressive Socialist Party of Ukraine and the National Resistance Front against Eurocolonization, issued her own 15-point plan to stabilize Ukraine, countering Poroshenko’s peace plan. Point 1 in Vitrenko’s statement is: "Refuse to sign the colonial Association Agreement for Ukraine with the EU."

Academician Sergei Glazyev, advisor to President Putin on Eurasian integration, today called the AA project "the biggest piece of political adventurism in current history."

"For Ukraine, signing this agreement is economic suicide," said Glazyev in comments released by his office and published, in part, by RIA Novosti. "It is incomprehensible," he added, "how European leaders can violate international law so grossly, by signing an illegitimate agreement, first of all, with an illegitimate government, second, and in violation of the Ukrainian Constitution, third. Furthermore, at least one-third of the country is categorically opposed to association with the EU."

Glazyev pointed out that calculations done by Ukrainian and Russian economists last year, during a study of the comparative advantages and damages from Ukraine’s associating with the EU or the Eurasian Customs Union, showed that "even under stable political conditions, the AA would inevitably cause a rapid deterioration of Ukraine’s balance of payments and would lead to default on its foreign debt." But now, he said, "the situation is much worse, and Ukraine is facing a 2014 balance of payments deficit of $50 billion, against $35 billion total assistance promised by the West"—even before implementing the AA.

Therefore, warned Glazyev, "There is no doubt that signing this agreement will cause a further steep devaluation of the hryvnya, soaring inflation becoming hyperinflation, and a many-fold collapse of the standard of living." "Do the European leaders realize," asked the Russian economist, what a huge political responsibility they are assuming, in signing this agreement, thereby pushing Ukraine toward economic catastrophe?"