Ukraine has seen its bloodiest weeks in decades. What started as peaceful protests over the Ukrainian government’s rejection of the long awaited European Union (EU) Association Agreement has led to the ousting of the pro-Russian President Viktor Yanukovych after riots demanding the president’s resignation broke out. In response to the sacking of their pro-Russian leader, the Russian contingent in eastern Ukraine and the Crimean peninsula broke out in contrasting protests late February. President Yanukovych is rumored to be hiding in Crimea, where Russian influence is stronger than in the main land. For much of February, thousands of Russian troops were secretly sent to bases Russia was permitted by treaty to own in Crimea. Russia’s annexation of Crimea came close to completion when the Crimeans voted to secede from Ukraine and fall into the welcoming arms of Russia.

A look back into Ukraine’s history and geography sheds light on the Yanukovych’s choice of refuge. In the late 1600s when Peter the Great’s Russia was at the peak of its power, eastern Ukraine fell victim to Russian imperialism. On the other hand, the western part spent the following centuries under the shifting control of central European powers such as Poland and the Austro-Hungarian Empire, so it was relatively free of Russian influence - that is, until Ukraine was assimilated into the Union of Soviet Socialist Republics in the 20th century. This explains why people from the east have been generally more supportive of Russian-leaning politicians while those from the west have been more European-orientated.

Stalin’s actions during his reign further augmented the west-east divide within Ukraine. In the 1930s, Stalin orchestrated famines as part of his collectivization campaign (a campaign to impose group-farming), starving many Ukrainians to death. This freed up the space for Stalin to import many Russians into the country and repopulate the east. Not only that, near the end of World War II, Stalin forced around 200,000 Crimean Tatars (natives of Crimea) to central Asia after accusing them of collaboration with Nazi Germany and replaced the indigenous race with ethnic Russians. This ethnic background allowed Putin to legitimize his smooth invasion of Crimea, arguing that Russia is there to simply protect ethnic Russians.

Geography and social polarities within Ukraine may have set the background for the ongoing crisis, but economic factors have more directly contributed to it. On the verge of a catastrophic default, Ukraine has found itself having to choose sides for bailout between its two largest neighbors. The rejected EU Association Agreement would have eliminated tariffs, opening European markets to Ukrainian exports and helping Ukraine pay off some of its $20 billion debt with the resulting boost in growth. The deal was abandoned in favor of Moscow’s offer of a $15 billion bailout package, coupled with huge discounts in gas prices, and has led to the breakout of protests.

The debt cycle that prompted Ukraine to seek EU assimilation predates the public unrests that started last November. Things started going downhill in October 2008 during the global financial crisis. A sudden drop in demand for steel, one of Ukraine’s main exports, led to the current account deficit, halting Ukrainian growth and hurting its currency. Twice, International Monetary Fund (IMF) offered Ukraine a lifeline with a $17 billion bailout package, but on both occasions the country failed to comply with the balance budget pledge that was attached to the money. Without international aid, Ukraine found its high natural gas costs unpayable. Ukraine imports most of its natural gas from the Russian gas giant Gazprom, just as many European countries do but at a ridiculously high price compared to the market value. With no choice but to buy at such high prices, Ukraine frequently ran behind on payments to Gazprom, which was the source of tussle and tension between the two countries.

Russia’s economic leverage over Ukraine regarding natural gas exports was one of the reasons Yanukovych succumbed to Russian pressure to disregard the EU involvement. The upper echelons in Moscow wanted to build its own customs union comprised of Kazakhstan, Belarus, and Ukraine to rival the EU. If Ukraine had been assimilated into the EU, Russia would not only have had to abandon their customs union but also would have been vulnerable to the sudden inflow of EU goods through Ukraine, damaging the Russian domestic economy.