Prime Minister of Ukraine Denys Shmyhal: We support all sanctions against Nord Stream 2

Mr. Prime Minister, the President of the United States has set the new tone in international diplomacy when he called Russian President Vladimir Putin a "murderer." Do you think this statement is correct?

The geopolitical situation is anything but easy at the moment and it is only exacerbated by the coronavirus crisis. Accordingly, the sentiment is irritable. But given that Ukraine has been forced to resist Russian aggression for the seventh year in a row, which has meanwhile cost the lives of more than 10,000 people, I can only say: I agree with Joe Biden's formulation.

However, it is inappropriate to speak in such a sharp tone about other state leaders. Didn't that reaction surprise you?

No, it didn’t. Just recall the visit of the EU High Representative for Foreign Affairs and Security Policy, Josep Borrell, to Moscow. Then Europe once again saw the true colors of Moscow, how Russia treats Europe and the rest of the world. That should have an impact on the attitude of the civilized world, such as the G7, to Russia.

Would you like to see Europe, in particular Germany, speak a more strident tone against Moscow?

First of all, I would rather thank the EU and especially the Federal Republic for the support that Ukraine has received during the seven years of Russian aggression. The sanctions that were imposed have prevented further aggression against Ukraine and are of great help to us. That is why we believe that it isn’t just crucial to extend the sanctions. Rather, they have to be clearer, more effective and, above all, stricter in the future.

In what way? In your opinion, what further steps would be necessary?

Sanctions are an effective means of influencing and they could be expanded. The Russian Federation must adhere to its obligations under international law and stop its aggression against Ukraine. This applies above all to the violations committed against human rights of Ukrainian citizens in the occupied Crimea and Donbas. Definitely, in this case the sanctions are appropriate and crucial as well.

This Monday the EU foreign ministers will discuss their Russia strategy. What exactly do you expect, or better to ask, do you wait certain impulses from this meeting?

A resolute and unanimous signal regarding Moscow. The unity of the EU against Russian aggression also strengthens the EU's position as an international player. Russia is doing its best to divide the EU countries by causing a rift among them. We are aware that Chancellor Angela Merkel plays a crucial role in the struggle for European unity.

Inside Germany, there is a strong political trend which, last but not least because of the crimes in World War II, is promoting an understanding attitude towards Russia. These politicians believe that the West provoked Moscow by expanding NATO to the Russian border. Has the West gone too far in this situation?

No, I don't see that. On the contrary: if there is anything that keeps Russia within bounds, it is NATO expansion and the sanctions. Just look, Ukraine is an independent state in Europe. Russia attacked this independent state and occupied territories. This is a dangerous precedent - for all of Europe.

Do you consider it realistic that one day Crimea will return back to Ukraine?

Ukraine will never accept the occupation of Crimea. Two weeks ago, we agreed on a strategy to return Crimea. An international Crimean platform is to become an effective de-occupation instrument that will cement international support for the return of the Ukrainian Crimea.

You praise Angela Merkel for her support. But it is the Chancellor who is campaigning for the controversial pipeline project criticized in Ukraine. The US now wants to impose further sanctions on the pipeline along the Baltic Sea. Do you think the project can still be stopped a few meters away before its completion?

I hope so anyway. Because if Nord Stream 2 goes into operation, Russia will generate higher income with the direct gas transit via the Baltic Sea instead of through Ukraine’s territory. The income Moscow uses to finance its aggression against Ukraine, among other things. In other words, with the pipeline, Europe is strengthening Russian aggression. That can hardly be in the interest of the EU.

Chancellor Merkel emphasizes that the gas pipeline is not a political project, but a business venture driven by private investors. Doesn’t that statement sound naive?

We consider Nord Stream 2 to be a purely political project. Ukraine's existing natural gas transit system, which has 140 billion cubic meters of transmission capacity per year, still has a lot of reserves: last year only 56 billion cubic meters were transmitted. Perhaps, Nord Stream 2 was initially a commercial project, but on conditions of Russian aggression against Ukraine, the project undoubtedly has a geopolitical dimension. It's not just about the security of Ukraine, but of all EU countries. That is why we fully support all sanctions directed to cease the finalizing of the Nord Stream 2 project.

Europe opposes the extraterritorial US sanctions and accuses the US of representing economic interests because they want to sell their liquefied gas in Europe. How do you interpret that?

I reiterate we welcome all sanctions against Russia and Nord Stream 2. The point is to deprive the aggressor country, which is Russia, of the opportunity to earn additional money to avoid it to finance aggression and terrorism. This project is not just about trade either, it is an element of the hybrid war against Ukraine.

But Russia also makes money by selling gas to Europe through the Ukrainian pipeline. What makes the difference?

I would like to emphasize again that Nord Stream 2 is the continuation of the hybrid war of the Russian Federation against Ukraine, including through its destructive role for the Ukrainian gas transport system.

Has Ukraine bought or consumed Russian gas itself in recent years?

Since the beginning of the war in eastern Ukraine, we have been getting our gas from EU countries. We don't have any gas trade agreements with Moscow. The total volume of trade with Russia is now only a fifth of what it was before the outbreak of war. We do not cooperate with Russia.

But you buy gas from Europe, which may come from Russia?

I cannot exclude such a possibility. But we buy the gas from our European partners.

Not only Ukraine and the USA oppose Nord Stream 2, but also Poland and the Balts. Even the French are critical of the project. How would you explain Berlin's insistence?

Economic interests probably predominate. The three components such as economic interests, geopolitics and transparent relationships between partners must be balanced. That is difficult - and therefore discussions are being held in this direction.

In the public eye, Ukraine is dependent on the Russian gas transit fees of three billion euros. Couldn't the EU compensate for this resource and thereby free Ukraine from financial blackmail by Russia?

First, as I said, this is not just a financial issue, and Russian gas transit fees are well below three billion euros. Second, let’s look: we are dealing with aggression against a sovereign state. In 1994 Ukraine voluntarily surrendered its nuclear weapons.

Instead, in the Budapest Memorandum, the USA, Great Britain and Russia assured us that they would protect Ukraine from possible aggression. We trusted it. And today the Crimea is occupied, part of Donbas is occupied, and we have lost human lives. In the end, this is about much more than economic interests. This is about war.

Doesn’t that mean it’s not about financial blackmail?

For us there are three things that count. First, stopping Russian aggression. Second, withdrawal of Russian troops. Third, reintegration of our regions into Ukraine. Only then are we ready to talk about economic relations.

Who are the demands addressed to?

These are also demands on the partners who gave us the guarantees back then.

Would it be the clearest message to Moscow from Ukraine if you could convert the Druzhba oil pipeline, via which Russian gas is now transported to Europe, to hydrogen with investment aid from the EU - and thus supply to Europe? Then you are more focused on the future and more independent from Moscow…

Definitely, that is our goal in the medium term. Hydrogen production and delivery to Europe is one of the top priorities for us alongside the digitization of our economy. We have engaged in vigorous discussions with the EU about that. Hydrogen production is a huge opportunity and could become an important industry for our country.

Would it be possible from the technical point of view to retrofit the pipeline to transport hydrogen - and how expensive would that be?

It is possible from the technical point of view, our experts say. The pipe sealing would have to be renewed. Indeed, such pipeline could play an important role in the green energy industry. It is planned to invest around UAH 14 billion (EUR 400 million) in domestic investments in developing the capacity of Ukrainian gas storage facilities by 2030.

Ukraine also receives strong support from the International Monetary Fund (IMF). In your opinion will the economy of Ukraine be developing so that not to require this aid?

That is not the focal point for us. We work with the World Bank, the European Investment Bank and the IMF. We really appreciate this collaboration. The IMF is more than just a lender - and we don't want to lose that. We have their support and advice on reforms introduction. We have just presented our economic development strategy up to 2030. Our goal is to double the gross domestic product by that time.

That sounds ambitious, especially in times of the pandemic. The Ukrainian economy has also slumped significantly recently.

Yes, that's ambitious but realistic. Not only our Government but also independent economists see it that way. They compared our situation with countries that found themselves in a similar situation. We will invest 15 billion euros annually over the next five years, we will continue to privatize and carry out a pension reform and, last but not least, we will liberalize our capital market. All of those will fuel growth.

You just mentioned digitization as an important growth component. What exactly do you mean?

We are making good progress with the digitization of the authorities, for example. By the end of the year, our administration will be almost completely paperless operating in the e-format. This not only increases the efficiency of our work, it also helps, above all, in the fight against corruption. And we have great expertise on the subject of countering cybercrime - not least because of the constant cyberattacks from Russia.

A topical issue for Ukraine is the possible EU accession. Has Ukraine any chance of success here?

Progress in our reforms is crucial. In the fight against corruption or the rule of law, we have to achieve European standards. We are working hard on it. We are also holding talks with Brussels about an Open Skies Agreement and about common standards for the energy market. Above all, this concerns the integration of the unified energy system of Ukraine into the pan-European energy system ENTSO-E. We are getting closer to Europe brick by brick.

That sounds like you are striving to accede the EU as soon as possible…

Ukraine is ready to become a member of the EU - we want that as soon as possible. Many Ukrainians sacrificed their lives in the war with Russia for this idea.

What time frame do you think is realistic to achieve that goal?

We wish to become a member of the EU within a period of five to ten years. That doesn't depend on us only, of course, but on 27 other countries. The same applies to NATO. Ukraine is also striving to become a member of the North Atlantic Alliance. We are working very closely with NATO. This became clear through the statements of NATO Secretary General Jens Stoltenberg that "NATO's door remains open for Ukraine".

Where do you see resistance on the European side against EU membership for Ukraine?

I don't see any resistance in fact. There are two reasons why we are not yet in the EU: We are still working on European standards, but we are confident that we will make great progress, not least because of digitization. Second, there are also countries within the EU that are skeptical of further enlargement of the EU.

Not all Eastern Europeans see the EU as positively as you do, especially in Poland and Hungary there is spread a great deal of Euroscepticism. How would you assess this trend?

I don't want to interfere in the domestic political debate in these countries. I can only speak for my country and assure you that the vast majority of Ukrainians are enthusiastic about Europe. They identify themselves as European citizens. That is my key message.

Interview /at the link/.