Last Thursday, Ukraine suddenly abandoned the association agreement with the EU which was to have been signed at the November 28 Eastern Partnership conference in Vilnius. The 1,200-page wide-ranging agreement had been in preparation for seven years and ready for signing for a year.

The agreement was to have closely linked the Ukraine to the European Union (EU) politically and economically, undermining Russian influence. Its temporary failure is a serious setback for the drive of the EU, led by German imperialism, to expand its influence further east and isolate Russia.

The abandonment of the agreement calls into question the entire Eastern partnership, under which the EU intends to bring five additional former Soviet states under its influence: Georgia, Azerbaijan, Armenia, Moldova and Belarus. Ukraine, the second largest state in Europe by area, with a population of 46 million, was by far the most important of these countries.

In opposition to the EU, Russia is encouraging these countries to join a customs union, from which a Kremlin-led Eurasian Union is to emerge. Until now, the customs union only consisted of Russia, Belarus and Kazakhstan. Armenia has decided against the eastern partnership, while Moldova and Georgia intend to sign agreements with the EU.

The failure of the EU agreement with Ukraine occurred after the Ukrainian parliament rejected a law freeing Julia Timoshenko Thursday morning. The EU had made the release of the imprisoned opposition leader a condition for the signing of the agreement.

Later in the afternoon, the Ukrainian cabinet released a decree cancelling the association agreement and advocating closer economic cooperation with the states of the former USSR and of the customs union. In addition, the decree suggested three-party discussions between Russia, Ukraine and the EU over Ukraine’s economic relations. Although Russian President Putin supports such talks, it is unclear whether Brussels will take part.

Ukraine formally has the option to accept the association agreement until November 28, but this now seems highly unlikely. The government in Kiev justified its retreat due to “the current economic situation” and “threats to national security.”

Comments in the western press have interpreted this as a capitulation under pressure from Moscow, which had imposed a temporary ban on Ukrainian goods and threatened a deterioration in economic relations if Ukraine signed the agreement.

In fact, it seems to have been the conditions demanded by the EU and International Monetary Fund (IMF) which made the government of Viktor Yanukovich retreat.

The IMF has only paid out 20 percent of a loan of $15 billion agreed with the Ukraine. It has linked the rest of the loan with drastic social austerity measures. Among other measures, the government is to increase gas and heating prices by 40 percent, cut state spending, and freeze the minimum and average wage at their current levels.

The EU supports the IMF’s conditions and has demanded major structural reforms, which will drive up unemployment in the extremely poor country.

By contrast, President Putin allegedly offered his Ukrainian colleague the prospect of cheap loans and a reduction in gas prices.

According to Vienna-based economist Peter Havlik, the EU and IMF conditions were the basic cause of Kiev’s rejection of the agreement: the government feared an uncontrollable social explosion that could have endangered Yanukovich’s reelection in 2015. Social tensions have visibly increased over recent months. Many of the hundreds of thousands of unemployed and social welfare claimants have received no money since June due to the budget crisis.

The Ukrainian opposition responded to the abandoning of the association agreement with large demonstrations. On Sunday, tens of thousands protested in Kiev and other cities in support of the agreement and demanded the resignation of the government. This was the largest pro-Western demonstration since the so-called Orange Revolution of 2004, which was politically backed and financed to a significant extent by the EU and US.

The demonstrations were led by three right-wing parties closely tied to Germany. They represent a section of the Ukrainian business elite and middle classes, who saw chances for social advancement through closer links with the EU.

The Fatherland Party of imprisoned former Prime Minister Julia Timoshenko has close ties to Germany’s Christian Democratic Union/Christian Social Union and is supported by the CDU/CSU’s Konrad Adenauer institute. Since 2008, the party has enjoyed observer status at the European Peoples’ Party, the federation that brings together conservative parties from across the continent. The President of the German Federation for displaced people, CDU politician Erika Steinbach, has taken on the sponsorship of Timoshenko.

The Ukrainian Democratic Reform Alliance, led by boxing world champion Vitali Klitschko, is also supported by the Konrad Adenauer institute. Klitschko finished his professional boxing career in a German ring and was given the national service cross in recognition of his services for Ukrainian-German relations.

The party “Freedom” (Svoboda) has openly far-right positions. They cooperate with the British National Party and Hungary’s Jobbik party. They also have contact with Germany’s Neo-Nazi NPD. The party’s representatives have repeatedly launched anti-Semitic tirades. Svoboda’s support comes above all from the west of the country, where Ukrainian nationalism is particularly strong. In the Lviv region, they received 38 percent of the vote in the 2012 parliamentary elections.

The EU’s aggressive attempts to bring the Ukraine under its influence and the leading role in this of Germany raise ominous historical parallels. Germany twice tried to bring Ukraine under its control. At the end of World War I, it forced the newly-formed USSR to give up control of the Ukraine under the peace treaty of Brest-Litovsk, installing a puppet regime led by Pavel Skoropatsky. In World War II, the Nazi armies overran the Ukraine and committed horrific war crimes against the population, including mass murder of Ukrainian Jews.

Ukraine is of immense strategic significance to Russia. From the end of the 18th century it was a key part of the Tsarist empire and later the Soviet Union. Both countries are closely connected economically. Russia is Ukraine’s largest trading partner, supplying around 90 percent of its gas needs. Ukraine is the most important transit for Russian gas to Europe and controls large deposits of raw materials.

Due to its geographical location on the Black Sea, Ukraine is a key country for gaining access to the Middle East and the Caucasus. In the Ukrainian city Sevastopol, Russia has its Black Sea fleet, providing Moscow with access to the Black Sea and Mediterranean Sea. Earlier this year, Russia deployed forces from its Black Sea fleet to the eastern Mediterranean to defend the Russian-aligned regime of Syrian President Bashar al-Assad against a possible US attack.

After the EU and NATO drew closer to the countries in Eastern Europe, which had been part of the Soviet sphere of influence since World War II, a further push by the EU to the east would degrade Russia to a regional power As a result, the tug of war over the Ukraine has extremely explosive potential.

This makes even more noteworthy the arrogance with which German media outlets are supporting the imperialist strivings of the German government.

The foreign affairs editor of the Süddeutsche Zeitung accused the Russian President of conducting a divisive operation. “He wants confrontation, because only firm boundaries protect his regime,” wrote Stefan Cornelius. Cornelius compared Putin’s suggestion to hold three-party discussions over the future of Ukraine, which was supported by the Ukrainian government, with the Stalin-Hitler pact of 1939.

Cornelius entirely ignores the fact that the EU and the German government are cooperating with extreme right-wing forces in Ukraine, and that Julia Timoshenko, who made millions in the oil industry in the 1990s, is anything but a democrat. She is supported in the media because she proved herself to be a reliable partner of the imperialist powers against the Ukrainian working class in the aftermath of the Orange revolution.

A glance at Romania, Bulgaria, Hungary and other Eastern European countries shows where incorporation into the EU leads. In these countries, extreme poverty, cultural and social disintegration, and corruption are rampant, while far right forces are growing. Only the ruling elite and a tiny section of the middle class profit from EU membership.