Dutch referendum will boost anti-EU cause in the UK and Europe

Almost two-thirds of Dutch voters rejected closer European Union links with Ukraine, which will boost anti-EU campaigns in the UK and Europe, as we highlighted earlier this week. It is highly embarrassing for the Dutch Prime Minster Mark Rutte, as the agreement had essentially already been approved by the Dutch Parliament and the vote has now worsened the country's already chaotic politics. The most likely scenario for the Netherlands is for it to negotiate a number of mostly symbolic opt-outs from the agreement in Brussels. The Netherlands is experiencing an increase in anti-EU sentiment, rising further due to revelations in the "Panama Papers" that Ukrainian President, Petro Poroshenko, registered an offshore company in 2014 associated with a confectionery business he founded. 

KIEV — Dutch voters’ resounding rejection of an EU-Ukraine Association Agreement has sent shockwaves through Ukraine’s political establishment, exacerbating the country’s already deep political crisis.

President Petro Poroshenko tried to put a positive spin on Wednesday’s non-binding referendum, in which more than 60 percent of Dutch voters came out against ratifying the trade deal between Brussels and Kiev.

“We will continue our movement towards the European Union,” Poroshenko said during an official visit to Japan.

But the president is under siege from all sides, including the country’s Western backers, who are growing frustrated with its ongoing political disarray and lack of movement on deep, systemic reform. For them, the referendum is yet another blow.

“This result is a personal verdict to Petro Poroshenko rather than to the country, the war, or people of the Netherlands,” wrote Mustafa Nayyem, an MP with Poroshenko’s own political bloc. “This is a verdict to the president of the country, who, despite the will of people and his own declarations, has chosen the ‘elite’ and oligarchs as partners.”

“This result is a personal verdict to Petro Poroshenko rather than to the country, the war, or people of the Netherlands” — Mustafa Nayyem MP

It is not clear what the referendum outcome means for the EU-Ukraine agreement. Of the EU’s 28 members, the Netherlands is the last government to ratify the deal — which already went into full effect in January. The Dutch prime minister, Mark Rutte, said the ratification could not automatically go forward, and he would now have to consult his government.

If the Dutch rejection leads to changes in the association agreement, that would be an enormous setback for Ukraine’s pro-Europe camp, which views the deal as one of the main anchors tying them to the EU.

Moving towards Europe

For them, the agreement is something they paid for in blood: Two years ago pro-European protesters took to the streets, in part because Ukraine’s then-president, Viktor Yanukovych, balked at signing it at the last moment. Yanukovych fled the country, and more than 100 people were killed in clashes in Kiev — and he was replaced by an ostensibly pro-reform and pro-EU administration.

Many Ukrainians are still very much pro-Europe — if only because this is seen as the main alternative to Russian pressure — but the mood is definitely souring. When the referendum results were made known, social media were full of comments viewing the Dutch voters’ decision as something of a betrayal.

Among commentators, the sense is that the vote comes on the heels of a general drift in EU policy towards Eastern Europe and Ukraine in particular. Kiev has never been offered the real prospective for EU membership, something that “explains a lot of Ukraine’s problems with political and economic development over the past two decades,” wrote Timothy Ash, an analyst with Nomura, the investment bank.

“Reformers in Kiev might well now find it that much more difficult to sell painful political and economic reforms to their own populations given that the Dutch have basically closed the door to them in terms of any European perspective,” Ash added. “The door has been closed, the drawbridge raised.”

The prime political casualty, at least initially, appears to be Poroshenko.

He was already rocked by disclosures from the “Panama Papers” this week that he set up an offshore vehicle for his chocolate company, Roshen. Although it is unclear whether this broke Ukrainian law, and Poroshenko denies any wrongdoing, the revelations have added fuel to accusations that the president is involved in corruption.

Poroshenko has defended his actions, saying they were needed to set up a blind trust for his assets. But calls are growing in Ukraine for a full investigation, and one parliamentary leader, Oleh Lyashko of the Radical Party, is pushing for the president’s impeachment.

The Panama scandal comes on the heels of a weeks-long political deadlock over who will become prime minister, a fight that has paralyzed the government and led to growing worries that the country’s post-revolution reform program has stalled.

Whatever the ultimate result, the immediate effect seems to have been a circling of wagons in the government — and a decision to avoid any major changes in the political leadership.

Consequently, after much political back and forth, observers are now predicting that Prime Minister Arseniy Yatsenyuk will remain in his post.