Analysis: Kiev holds key to Putin’s hopes for a ‘Eurasian Union’

As snow dusts the crowd on Kiev's Independence Square, songs and jokes from the stage leaven demands for president Viktor Yanukovich and his government to resign.

One comedian started his act with what sounded like an announcement at Kiev railway station. "The last train to Moscow is about to depart," a woman's voice trilled over a tannoy. "Would passenger Yanukovich please board immediately."

Yanukovich says he is not going anywhere at the behest of the opposition and will continue to pursue a "European path", regardless of critics' claims that he veered off onto a well-trodden route to Russia when he rejected a historic deal with Brussels last month.

Having complained bitterly about the Kremlin's threats of trade retaliation if Ukraine signed the pact, Yanukovich ultimately chose to "postpone" the agreement, patch up relations with Moscow, and blame the EU for not promising to compensate Kiev for its potential loss of Russian business.

Yanukovich and his government raised major doubts about the EU deal only a week before it was due to be signed. But they cannot have left it so late to do the maths of a deal that was six years in the making, and Russia’s reaction was entirely predictable, even before months of explicit threats.

Influential rival
Ukraine's leaders appear to have chosen the path that offers them the best hope of political survival.

The EU wanted Yanukovich to free his most influential rival, the jailed former premier Yulia Tymoshenko, and introduce hard but overdue economic reforms. To fulfil either condition, let alone both, could have killed his ailing chances of re-election in 2015.

It is not clear what Russian president Vladimir Putin offered Yanukovich at three recent meetings. But ex-Soviet states that have tied their future to Moscow, like Belarus and Armenia, have received big discounts on Russian gas, and loans with few strings attached. Cheap credit and energy, and licence to keep Tymoshenko locked up, would boost Yanukovich's bid for a second term.

For Putin, keeping Ukraine and its 46 million people out of Brussels’ embrace perpetuates his dream of creating a bloc of post-Soviet states as a Moscow-led counterweight to the EU.

He intends to turn Russia's current customs union with Kazakhstan and Belarus into a "Eurasian Union", uniting more former Soviet republics and cementing Kremlin influence over its communist-era empire.

Major market
Without Ukraine, however, the Eurasian Union would lose not only a major market bordering the EU but a key European and Slavic element, potentially leaving Putin to preside over a club of mostly central Asian despots.

"What is happening here is a decisive moment not only for Ukraine, but for the whole post-Soviet world," said Giorgi Baramidze, deputy speaker of Georgia's parliament, as he and other politicians from Tbilisi drank a warming coffee next to Independence Square.

"Without Ukraine, Russia will realise it needs a different approach to its neighbours, and Putin's crazy idea of resurrecting the Soviet Union will be doomed."

Georgia tried to break Russian influence with its Rose Revolution in 2003. Since then, Moscow has imposed trade sanctions and fought a war against Tbilisi, and recognised two Georgian regions as independent countries and stationed thousands of troops in both.

"Russia put Georgia's Nato integration on hold with the war. Now it is trying to put Ukraine's EU integration on hold," Baramidze said, adding that Rose Revolution leader Mikheil Saakashvili might visit Kiev in the coming days.

“Ukraine is a locomotive for the region. So if we want to integrate with the EU at a reasonable speed, we need Ukraine onboard.”