n April this year Ukraine signed two agreements with Russia that, most importantly, granted Moscow an additional 25-year lease on Ukraine’s naval base at Sevastopol in exchange for concessions on the price Ukraine has to pay for Russian gas. These agreements initiated a new era in Ukraine-Russian relations.

Some analysts have worried that Ukraine gave away too much in the deal and now is beholden to Russia in ways it will regret. They also worry that closer ties to Russia will weaken Ukraine’s momentum towards integration into the Euro-Atlantic community.

Not so, says Ukraine’s Foreign Minister, Kostyantyn Gryshchenko, in a recent, exclusive interview for this report. He said that while the agreements with Russia definitely improved Ukraine’s most important bilateral relationship to the east, it in no way limited Ukraine’s foreign policy options, including its drive to become a member of the European Union.

Gryshchenko is a seasoned and impressive diplomat, who has previously been ambassador to Washington and foreign minister in an earlier Yanukovych government. Most recently, he was ambassador to Moscow where he saw firsthand how frayed relations negatively impacted government-to-government relations, and soured what had for a long time been excellent relations between the two peoples.

In this wide-ranging interview with the author, Mr Gryshchenko sets out Ukraine’s foreign policy agenda and clarifies many of the issues that have been the source of misunderstandings.

What are Ukraine’s foreign policy priorities?
Our foreign policy agenda or priorities are very clear.

Our first priority is continuous progress towards integration into the European Union. This means that in practical terms we will need to implement in a very short timeframe the decisions which were reached during the Ukraine-EU summit on the second of November this year, which means making progress in the negotiations on our association agreement, including the deep and comprehensive free trade agreement which is part of it. We have made very significant progress, which was achieved in the last few months, in both areas.

Another track is to achieve the implementation of the plan of action to achieve a visa-free regime, where we need to adopt a number of legislative acts, and also a system of biometric passports, protection of documents, reliability of information, protection of personal data, and quite a number of other aspects. But we have a full understanding of how to do it and how to be efficient in both internal and foreign negotiations.

We see our future in the European Union as a full member. We understand that conditions for that are much more difficult than for the first wave of Eastern European nations, but for us it is a matter of the choice of the Ukrainian people, because here we have an overwhelming consensus that we need to be there.

Our second priority is strengthening of friendly, very open, very result-oriented relations with the Russian Federation. It is our second (after the EU) trade partner and the source of most of the energy we import. It is not only our single biggest market, but also there are millions of people who travel both ways and who have so many different types of human (connections): old friends, relatives. Clearly this cannot but be our priority.

The period when to be a Ukrainian patriot meant to be anti-Russian is over. It’s something that is totally unacceptable to the Ukrainian people, Ukrainian interests and Ukraine’s future. We need to make sure, and we believe it is only natural, that our progress in relations with Russia is complementary, or at least not contradictory, with our European aspirations.

Our third priority is the maintenance and further development of our strategic partnership with the United States on issues of our security, on the resolution of global challenges and in tackling the problems that are international by nature, such as fighting terrorism, narcotrafficking, trafficking in human beings and many other areas.

Our fourth priority, and not necessarily in importance I would say, is to be more active, more open and more efficient in dealing with the global economy. We are now placing very great importance on development of relations with China. The first ever visit by a head of state to China was done by President Yanukovych. There were no visits either way over the last five years. The previous government simply ignored China, which is ridiculous in this world.

India, Brazil, the Middle East: All are important. Today we have, visiting this country, the president of Israel, Shimon Peres, and his very able minister of foreign affairs. At the same time there is, visiting us, the head of the sovereign investment fund of Abu Dhabi, the biggest (such fund) in the world. That they are here, albeit for different reasons, at the same time is very symbolic.

We are bringing more investment and more western business practices into Ukraine; we are placing a very big emphasis on economic cooperation, economic development and financial issues in our international activities. President Yanukovych has charged me and the Foreign Ministry to make the economic component of our work more visible and more effective.

Do you have a timeline for EU accession?
We understand that the insistence of the previous leaders of Ukraine that they could promise the people of our country some specific dates (for EU accession) that have already passed many times is not something that we would like to do. We believe that we can do our homework, what we need to do, in very limited time, provided that the major factors will continue to be in our favor. These are the factors of internal stability, of consolidation of political power, which is aiming to produce specific results that would be appreciated by the people of Ukraine.

You need to be a political animal to understand what would bring success to your country and what would bring support to your political agenda. That is European integration. That is why we will have a major breakthrough in the next two years. So that we will be able to produce tangible, serious, visible results, that will bring the living standards and business ethics to levels consonant with what you would expect of most European nations. That is our goal.

In parallel, we will be sending through all channels the message which we believe is important for Europeans to accept: Ukraine is not a liability, it is an asset. In global competition, where European relative strength is shrinking somewhat as compared to the weight of the United States and new players, Ukraine would be an additional strength, providing its technological, human, agricultural potential, which the world will be in dire need of 10 to 20 years from now.

The UN Food and Agriculture Organization is projecting that in 20 years the world will be facing an acute food shortage in view of the fact that much of (the population of) China and India will become middle class and will demand totally different types of products.

So Ukraine may become the breadbasket of Europe again?
We understand that Europe will be able to feed itself, especially with its declining population, but others will need (our agricultural and food products).

What is the status of Ukraine’s relationship with NATO?
NATO is an institution which is an important partner for Ukraine. What we have done with this government, and this includes the president, is to make it clear that our country’s policy on NATO is heading towards daylight.

Only a minority of Ukrainians support NATO membership. The vast majority are against it. There was never more than 30 percent support for joining NATO, and NATO member states have never sent a message to Ukrainian society saying that they are ready to accept us as members.

We have declared that in view of the attitudes of the vast majority of the electorate that we are not (a candidate) state. This does not inhibit our ability to participate in international operations led by NATO, including in Afghanistan, where we have a small, non-combat unit of medics and explosives experts, as well as in many other places.

We also have the NATO-Ukraine Commission, which is a platform for political dialog, and that we will continue to use. In essence, the number and intensity of our interactions with NATO, including events and joint exercises, will continue to be at the same level, or be at a higher level than before. We see it as an asset for the reformation of our own armed forces and for improving standards in many other areas.

The use of that particular, clear policy was (a factor) in reduction of tensions with Russia, and we believe it was a factor in improving NATO-Russian relations, which overall improved the security and stability on the European continent.

Are you saying that Ukraine is helping improve NATO-Russian relations?
By simply saying we are not going to join NATO we have removed the kind of arguments of those who still live in the 70s and 80s in their mentalities, and who create enemies out of NATO and Russia or imagine Russia can be a NATO member state.

An analysis for Chatham House says that the deal with Russia for Sevastopol will tie Ukraine to Russia more than Ukraine expects or wants. What is your view?
No, I don’t think so. The facts on the ground do not support that theory.

The fact that you have a base or naval facilities leased to the fleet of another country does not limit the freedom of your foreign policy in any respect. First and foremost we don’t see the Russian fleet as a threat to us. It is a small naval force that plays few of its original roles. Essentially, over the last two decades we have seen that if we remove the politically motivated problems that were artificially introduced into the (Ukraine-Russia) relationship around the issue of the Black Sea Fleet on our territory, there is nothing that would hinder our ability to act independently.

On the other hand, the fact that we agree to have, or we are open to having, the need for a Russian presence accommodated is a positive development. Second, we see the presence of the Black Sea Fleet as an economic and financial asset for the region itself. Sevastopol was built as a military base and we don’t have that many ships, or need for them, for the time being. Third, with normal cooperation, there are also opportunities for other-than-military development of the city. This is not contradictory as such. So it is a non-issue.

Is the flip side of the agreements good news for Europe because there won’t be threats to the gas supply?
That was part of the larger deal that we needed at a crucial time. Essentially, we could not decide on a budget because the economy could not support the price level (of gas from Russia) that the previous prime minister agreed to. It was totally unsustainable for our economy at a time when budget receipts were drastically going down and with our debt obligations pretty high.

Having a normal price (higher than we would like, but much lower than what was contracted for) was a precondition to deciding a budget, and having a budget was needed to have negotiations with the IMF. The IMF support was to start the economy on the path of sustainable growth.

We had very difficult, tough negotiations (with Russia) on this package deal, but in the end it created a very large opening to move forward in many of the areas that are important to all: technological, overall economic development, new projects in transport infrastructure, development of the transport corridors, for transit and use of our ports.

It changed the whole equation. Before, according to polls conducted by independent institutions in Russia, Ukraine was perceived by ordinary Russians as the third or fourth most hostile nation towards Russia, after Georgia, the United States and Britain. In some surveys we were ahead of Britain. It was totally unsustainable and unacceptable, because it was very unpleasant for some seven million people who travel to Russia every year. There was never even close to the same negative view of Russia in Ukraine. The vast majority of Ukrainians look at the Russian people in a positive way.

(Russian negativity) has completely changed now. As ambassador to Russia, when my staff took papers to clear goods through customs or similar procedures, the low-level functionaries would ask: “Why do you hate us so much?” “Why are you so hostile to us?” It was ridiculous, but also an irritant and a barrier for small businesses trying to get things done. Now it is a quite different atmosphere.

Should Europeans still be worried about their gas supplies being interrupted?
Let me be crystal clear that both countries, as well as both Gazprom and Ukraini Naftogaz, were damaged tremendously by that experience (when Russia cut off gas supplies to Ukraine, and European consumers saw reduced supplies, in the middle of winter). In this area the negotiations have always been tough, but the transit of gas to Europe will be guaranteed 100 percent under all conditions.

How would you encourage a European or American company to invest in Ukraine?
By European standards, Ukraine is a rather large country. It is a country that has tremendous needs in infrastructure, in agriculture, in almost every area. At the same time it has very well-trained people. We just had a large Belgian economic delegation headed by Crown Prince Philip. Some Belgian companies that have been here for 20 years or so all emphasized to the visiting Belgian delegation that they bring only a very limited number of expats to work in Ukraine because the quality of Ukrainians who work for them here is exceptional.

There is also a different business climate being established by this government. There is a program of reform that is compatible with European law. There is a program of reduction of licenses, permits, etc., that hinder the development of business. President Yanukovych’s target is to reduce this regulation by as much as 90 percent. Only the regulations related to the health and safety of people will remain.

There is also the introduction of the new tax code, automatic refunds of VAT payments, streamlining of the customs regulations and procedures, and what is very important: judicial reform and the fight against corruption. Judges should deliver rulings independent of government and with the understanding that they are responsible to the law. They cannot simply be above the law.

All this is not only being introduced as legislation, but obviously implementation is also extremely important.

We have inherited from the past a system where up to four million people are engaged in private entrepreneurship but do not pay any taxes. If you are accustomed to not paying taxes, you don’t feel happy about the tax reforms.