Ukraine’s other war.
Date: 2015-10-01
Institutions: European Union Institute for Security Studies
Subjects: Russia, Ukraine, domestic policy, political reform, political situation

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Ukraine’s other war
by Jana Kobzova and Nicu Popescu

Ukraine  is  fighting  two  wars  simultaneously.  The 
most  obvious  is  the  hybrid  conflict  in  the  east, 
fuelled and sustained by Russia. But while the ‘hot 
phase’ in this arena is over, at least for now, Ukraine 
is also engaged in a war against itself. It is locked 
in  a  struggle  against  its  own  dysfunctionality  and 
endemic levels of corruption which will affect mil-
lions,  from  low-level  policemen  and  fire  inspec-
tors to oligarchs and leading politicians. And while 
Ukraine  can  cope  with  the  existence  of  an  almost 
frozen conflict in the Donbas, there is no possibility 
of accepting the status quo with regard to the latter 
war. 

There is currently a lull in the violence in the Donbas: 
it is relatively contained, and fears of a larger-scale 
conflict have significantly decreased since last year. 
While most Ukrainians have been affected person-
ally in some way (almost 8,000 people have been 
killed,  siblings  or  husbands  mobilised  or  drafted, 
and large amounts of the population displaced), it 
seems  that  the  populace  at  large  has  accepted  the 
fact  that  eastern  Ukraine  is  already  turning  into  a 
‘Gaza-like’ territory from which a small, but steady, 
stream of bad news flows. 

A swift victory in the east is no longer expected and 
many now privately question whether Ukraine’s lim-
ited financial, human, and humanitarian resources 

should continue to be directed towards those who 
have  remained  in  the  separatist-controlled  areas. 
This opinion seems to also be widely shared by the 
country’s political elites. In other words, large sec-
tions of Ukraine’s body politic are increasingly ac-
ceptant of a post-Donbas reality. 

The war in the east has been contained through the 
tortuous Minsk process, a flurry of Western diplo-
macy, and the non-collapse of Kiev’s military. Now, 
it is Ukraine’s internal conflict which has the most 
serious  implications  for  both  the  country’s  future 
and the region’s stability. 

Reform tide: slowly but surely

Ukraine  is  slowly  but  surely  ratcheting  up  its  en-
gagement  in  this  domestic  war.  Though  overdue 
and not always strong enough, a discernible reform 
dynamic  exists.  Unlike  wars,  however,  reforms 
rarely  generate  headlines.  And  the  reforms  them-
selves  are  more  akin  to  a  slowly  encroaching  tide 
than a tsunami. That said, this tide is slowly becom-
ing stronger.

The  country  still  faces  an  economic  crisis,  but  its 
impact has been mitigated by a number of factors. 
Although  the  devaluation  of  Ukraine’s  currency, 
the hryvnia, has occurred in tandem with the near-

European Union Institute for Security Studies

September 2015

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doubling of the dollar, its drop in value is no worse 
than that of the Russian rouble. This can be consid-
ered an achievement given Moscow’s comparative-
ly much stronger economic position. The expected 
gas price hike has thus far also been less dramatic 
than  it  could  have  been.  Household  costs  have 
increased  three-to-five-fold,  but  subsidies  for  the 
poorest are being offered by the state. Importantly, 
thanks to falling gas prices on international mar-
kets, Ukraine has slightly greater breathing room 
following the drop in the price of oil.

The economy is slowly stabilising: backed by the 
IMF,  Kiev  has  renegotiated  its  debt  with  private 
creditors and attempted to cut red tape and legal-
ise  large  chunks  of  the  country’s  grey  economy. 
The number of direct taxes has been reduced from 
22 to 9 and privatisation plans for more than thou-
sand state companies are being drawn up. Pension 
reforms have begun in the form of benefits reduc-
tions for working pensioners and an increase in the 
retirement age. Problems with public procurement 
– a huge source of corruption under all previous 
governments – are also being addressed. The ad-
ministration recently launched an electronic pub-
lic procurement system (called ProZorro) with the 
aim of improving transparency and lowering levels 
of embezzlement by 10%-20%.

The  banking  sector,  too,  is  being  cleaned  up. 
Insolvent banks and institutions involved in mon-
ey laundering (so-called ‘conversion centres’) have 
been targeted in particular. Since the end of 2013, 
more than 50 banks have been declared insolvent 
and the ownership of others has been made more 
transparent. 

Despite a revolution, a war, and a protracted eco-
nomic crisis,  Ukraine’s  place in  the World  Bank’s 
ease  of  doing  business  index  jumped  16  places 
in  2014  compared  to  the  previous  year,  up  from 
112th to 96th. The number of permits necessary to 
register a company has been reduced from 143 to 
85, barriers to closing businesses have been lifted, 
and  the  number  of  economic  supervisory  bodies 
has been halved from 56 to 28. 

Progress  has  been  made  in  the  energy  sphere.  In 
April this year, Ukraine adopted legislation in line 
with  the  EU’s  third  energy  package,  which  paves 
the way for gas market liberalisation and the even-
tual  demonopolisation  of  the  sector.  Admittedly, 
however, there seems to be little rush to comple-
ment this legislation with new regulations, guide-
lines, and monitoring mechanisms. Nevertheless, 
Naftogaz,  Ukraine’s  energy  monopolist,  is  due  to 
be ‘unbundled’ and is now run by a leaner, cleaner 
management. In 2014, 90% of Ukraine’s gas needs 

were met by Russia. By the end of 2015, the coun-
try  is  expected  to  acquire  more  than  60%  of  its 
gas  from  the  EU,  a  more  reliable  supplier  than 
Moscow.

The  security  sector  has  also  not  escaped  reform. 
Most  visibly,  Soviet-style  traffic  police  are  being 
abolished and new Georgia-inspired police patrols 
launched  under  the  auspices  of  Deputy  Interior 
Minister  Eka  Zguladze-Glucksmann,  who  held 
the same post in Tbilisi from 2006 to 2012. Kiev 
launched  its  new  traffic  police  force  in  July,  and 
Lviv  and  Odessa  followed  suit  in  August.  While 
steps  like  these  will  not  resolve  larger  security-
sector  problems  (such  as  corruption,  widespread 
leaks  and  spying  in  security  agencies),  they  are 
aimed at increasing people’s trust in the police and 
preventing  low-level  abuses  of  power.  And,  thus 
far, they have proven to be popular. 

A  package  of  anti-corruption  laws  has  also  been 
adopted,  and  a  dedicated  bureau  –  a  precondi-
tion for EU visa liberalisation – established. Once 
the  “backbone  of  a  corrupt  system”  –  as  Kalman 
Mizsei, head of the EUAM mission in Ukraine, put 
it – the prosecutor general’s office has undergone 
some  positive  changes.  The  office  (mostly  at  the 
initiative of a Georgian Deputy Prosecutor General 
David  Sakvarelidze)  has  launched  a  number  of 
investigations  examining  high-ranking  officials, 
including several corrupt judges, MPs, and prose-
cutors. To date, however, there have been no high-
level convictions.

Sakvarelidze is also cutting the overall number of 
prosecutors from 18,000 to 12,000. This will lead 
to greater overall savings, potentially allowing sal-
aries to increase and thereby reduce the incentive 
to take bribes.  

Fizzy politics

The potentially explosive state of Ukraine’s domes-
tic politics, however, threatens these achievements 
and  does  not  bode  well  for  further  reforms.  To 
some  extent,  there  is  nothing  unusual  about  po-
litical squabbling in unconsolidated democracies. 
Such animated disagreements can be likened to a 
fizzy  drink  –  while  they  are  not  entirely  healthy, 
they  are  not  lethal,  either.  But  this  might  not  re-
main  the  case  for  long  in  Ukraine.  The  govern-
ing  coalition,  ‘European  Ukraine’  (which,  until 
1  September,  consisted  of  five  parties),  is  more 
strained than ever. Publicly, the main line of con-
flict runs between President Petro Poroshenko and 
Prime  Minister  Arseniy  Yatsenyuk.  In  practice, 
however, it is about a host of actors of the ‘old sys-
tem’,  whose  beneficiaries  cut  across  all  political 

European Union Institute for Security Studies

September 2015

2

parties,  resisting  changes  and  reforms.  Oligarchs 
retain huge political influence which is unlikely to 
wane anytime soon. That said, the president is tak-
ing steps to renegotiate the rules of the game in a 
way  that  would  make  Kiev,  not  the  oligarchs,  the 
ultimate arbiter of political matters. 

Ratings of candidates in July 2015 compared to 
March 2015 (%)

Candidate

March

Petro Poroshenko

Julia Tymoshenko

Oleh Lyashko

Anatoly Gritsenko

Andrew Sadovoy

Dmitry Yarosh

Yuri Boiko

Olga Bogomolets

Arseniy Yatsenyuk

Oleg Tyagnibok

Vitaly Klitschko

Tetiana Chornovil

Victoria Syumar

Oksana Syruyid

35.1

11.6

7.7

7.2

11.4

4.9

2.8

-

5.3

2.5

-

-

-

-

Other candidates

11.4

July

26.9

25.6

8.5

8.5

7.8

5.7

4.5

2.6

2.3

2.2

1.3

0.5

0.4

0.2

2.9

Source:  Socio-Political  Situation 
International Institute of Sociology. 

in  Ukraine:  July  2015,  Kiev 

Poroshenko’s ratings have fallen due to a combi-
nation  of  general  disappointment  with  the  pace 
of reforms and a loss of credibility, partly caused 
by his failure to follow up on his promise to sell 
his privately-owned businesses. At the same time, 
with its ratings dropping to near-negligible levels, 
Yatsenyuk’s  party  is  bearing  the  brunt  of  public 
frustration. His own position as prime minister is 
uncertain, and Kiev is abuzz with rumours about 
a  possible  government  reshuffle  this  autumn. 

There is talk of his own party withdrawing sup-
port  for  him  as  prime  minister  in  exchange  for 
another  party  member  taking  over  the  position. 
That  being  said,  similar  mutterings  circulated  in 
the spring to no avail.

Mikheil  Saakashvili,  the  current  governor  of 
Odessa and former president of Georgia who was 
appointed  by  Poroshenko,  also  recently  waded 
into the fray. In his typical fashion, he has publi-
cally accused Yatsenyuk’s government of being in 
cahoots with the oligarchs and sabotaging reforms. 
A response was delivered by one of Ukraine’s most 
powerful oligarchs, Ihor Kolomoisky, who was dis-
missed  as  governor  of  Dnipropetrovsk  in  March 
by the president. In a clear swipe at Poroshenko, 
Kolomoisky said that “Saakashvili is a dog with-
out a muzzle,” and that “in such cases, the masters 
of the dog should be held responsible.”

A parallel exchange of fire has taken place between 
Interior Minister Arsen Avakov (from Yatsenyuk’s 
People’s Front) and Oleh Tyahnibok, leader of the 
nationalist Freedom Party and an ally during the 
EuroMaidan  revolution.  During  a  protest  on  31 
August  against  the  proposed  decentralisation  of 
Ukraine,  as  required  per  the  Minsk  agreement, 
a  Freedom  Party  member  (and  former  volunteer 
on the eastern front) threw a grenade into the po-
lice ranks. As a result of the explosion and further 
clashes  between  protesters  and  the  police,  three 
policemen  died  and  130  people  were  wounded, 
including two French journalists and the Deputy 
Interior  Minister  Vasily  Paskal.  Avakov  subse-
quently accused Tyahnibok of being complicit in 
the  violence  by  bringing  “bandits”  to  attack  the 
parliament. 

In  parallel,  the  Radical  Party  of  Oleh  Lyashko, 
a  populist  and  nationalist,  has  withdrawn  from 
the  governing  coalition.  This  should,  in  theory 
at least, force current coalition members to close 
ranks.  Meanwhile,  former  Prime  Minister  Yulia 
Tymoshenko’s  popularity  is  growing  (she  is  now 
polling  second  after  Poroshenko).  Her  party, 
Fatherland, remains inside the coalition in name 
only:  in  practice,  she  is  an  advocate  of  populist 
and anti-reform measures. For the time being, she 
has neither the numbers nor the allies to challenge 
the  current  political  setup  –  but  she  is  still  in  a 
position  to  cause  trouble  by  mobilising  groups 
against the government and its policies. 

Party discipline is weak, especially in Poroshenko’s 
and  Yatsenyuk’s  parties.  Although,  in  theory,  the 
coalition  commanded  a  constitutional  major-
ity  (with  over  300  seats)  in  the  Rada  until  early 
September, less than 45% of government-proposed 

European Union Institute for Security Studies

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3

bills  have  been  adopted.  Moreover,  many  of  the 
bills which have passed were amended by MPs be-
yond recognition. Most political battles are about 
influence and favours, not policies. Under different 
circumstances, this could be seen as normal coali-
tion politics (Ukraine has never had a functioning 
coalition before), but the country can no longer af-
ford to squander political capital the way its politi-
cians have done so far. 

Local elections scheduled for 25 October are likely 
to  reinforce  public  disillusionment  with  the  gov-
ernment and the view that the politicians in charge 
differ  little  from  their  predecessors.  If  the  results 
of the July parliamentary by-election in Chernihiv’s 
205th district are any indication, the local polls will 
see a repetition of the usual mix of vote-buying and 
corruption that Ukraine is all too familiar with. 

Ukrainian public poll: if you were to participate in 
elections, which party would you vote for?

Party

Petro Poroshenko’s Bloc

Vote (%)

14.4

People’s Front

Samopomich

Opposition Bloc

All-Ukrainian Union ‘Fatherland’

Radical Party of Oleh Lyashko

All-Ukrainian Union ‘Freedom’

Communist Party

Right Sector

Civil Position

UKROP

None of the above

I am voting for a particular 
candidate, regardless of party 
affiliation

Undecided

2.1

9.0

7.5

6.9

7.3

2.5

1.6

4.0

2.6

0.8

1.9

15.9

23.4

Source: Popular opinion poll in Ukraine: protest mood during crisis: 
July 2015, The Ilko Kucheriv Democratic Initiatives Foundation (DIF).

The risks ahead 

Quite understandably, for the past year and a half, 
the attention of Kiev and the international commu-
nity has been focused on the conflict in the Donbas. 
War, not reform, sapped most of the political energy 
of Ukraine’s rulers. Though this is partly justified, it 
was also used at times as an excuse to postpone dif-
ficult reforms – some of which would be painful for 
the general population, others for the oligarchs. 

While  fighting  a  war  with  an  external  enemy,  few 
politicians wished to open other domestic political 
fronts  which  could  potentially  further  destabilise 
the country and threaten what is left of its territo-
rial integrity. But that time has now passed, and the 
need to devote more political resources to fighting 
the second (internal) war is now greater than ever.   

None  of  the  reforms  listed  above  are  irreversible 
– nor are they sufficient. It also appears that there 
are  few  proactive  reformers  in  the  top  leadership. 
Although reforms are being introduced, they seem 
to be taking place almost despite most of the ruling 
political elite. The government is largely respond-
ing to calls for reform coming from society and in-
ternational partners rather than leading them. The 
result is that reforms are being rolled out in a rather 
haphazard manner. 

This is far from ideal as a governance model – yet 
it  is  better  than  many  had  hoped  for  a  year  ago. 
Moreover, there is hope that some positive reforms 
could  spill  over  into  adjacent  sectors,  slowly  cre-
ating a snowball effect and intensifying the reform 
dynamic. This is all the more likely to occur if and 
when domestic pressure and external conditionality 
go hand in hand, thereby helping to consolidate a 
pro-reform consensus.

Ultimately,  without  the  political  determination  to 
carry  out  reforms,  the  country  could  quickly  face 
a situation in which its own domestic situation be-
comes  an  even  greater  threat  than  the  war  in  the 
Donbas. If allowed to ferment, the unhealthy cock-
tail of Ukraine’s messy politics may eventually be-
come a Molotov cocktail.

Jana Kobzova is a Senior Programme Officer at 
the European Endowment for Democracy and an 
Associate Policy Fellow at the European Council 
on Foreign Relations. 

Nicu Popescu is a Senior Analyst at the EUISS.

European Union Institute for Security Studies

September 2015

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© EU Institute for Security Studies, 2015. | QN-AK-15-028-2A-N | ISBN 978-92-9198-284-4 | ISSN 2315-1110 | DOI 10.2815/798637