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06-05-2015

Ukraine | EU

Ukraine on Its Road to Europe

Oleksandr Yaroshchuk

Since the signing of the Association Agreement between Ukraine and the EU, the financial situation of Ukraine remains weak. Debates about economic, financial, military and political assistance are the major topic for discussion among Ukraine and foreign partners. But if military assistance is almost denied, financial help is being granted on a permanent basis. During last year and the beginning of 2015, Ukraine has received vast sums of money from the EU, the USA, Japan and Canada. But to assure economic development it is, obviously, not enough. The problem remains: there are almost no investments, which have been declining over past two years.

On April 28, Ukrainian Government invited international partners and potential investors to the International Support for Ukraine Conference, which had to accelerate financial help to Ukraine. Therefore, in this article, I would like to reflect on the outcomes of the International Support for Ukraine Conference, more known as the Donors’ Conference, and to evaluate the progress that was made.

The Conference was visited by many Ukrainian and European politicians, representatives of Kazakhstan, Japan, the USA etc. It was planned over half a year ago when the newly elected Government of Ukraine was established and the process of reforms was launched.

 

Reforms in Ukraine: the major step towards European Perspective

 

Today, the reform process in Ukraine is based on a set of major documents, which govern not only how and when the reforms must be implemented or, at least, voted for in the Parliament (Verhovna Rada), but also how money, granted to Ukraine by foreign donors, should be used.

These 5 major documents are EU-Ukraine Association Agenda, Strategic Vision “Strategy 2020”, Coalition Agreement between Parliamentary Fractions, Ukraine’s Government Programme for 2015 and Memorandum with the IMF. All documents are built around the EU-Ukraine Association Agreement and its Agenda.

The abovementioned documents set the strategic reforms that must be implemented in the next 5 years. They set a range of major reforms, including Constitutional Reform, Elections Legislation Reform, Public Procurement Reform, Anti-Corruption Reforms and Lustration, Judicial Reform, Public Administration Reform, Decentralization, Deregulation and Entrepreneurship Development, Law Enforcement System Reform, National Security and Defence Systems Reform, Health Care Reform, Tax Reform, Energy Sector Reform (with a quite substantial part of the Energy Independence Program), Financial Sector Reform, Education Reform, State Property Management Reform, Agriculture Reform and Ukraine Global Promotion Program. The Ukrainian Government together with the President and the Parliament draw the program, which embraces almost all sectors of national economy. This is also illustrated by sayings of European experts and international advisors, who suggested reforming 85% of the Ukrainian economy. The President Petro Poroshenko said that in his opinion these reforms is an initial step for Ukraine in its accession to the European Union.

 

Supporting Ukraine’s Economic Reforms

 

The basic idea of this Conference was to invite European leaders and investors to a platform where they can discuss challenges and perspectives of reforms and to attract necessary investments. On the part of the European Union and its Member States, Jean-Klod Juncker declared that the EU will grant Ukraine a further package of financial help, which in total will amount to $ 11 bn dollars in the next few years. Slovenia also pledged to provide Ukraine with humanitarian aid, to treat Ukrainian soldiers in rehabilitation centers and to provide psychological rehabilitation to the children affected by the war.

The same statements were made by Canadian Minister for Immigration and Citizenship Chris Alexander. Hestated that Canada will support Ukraine with $ 18 ml of financial help. Kazakhstan, interestingly, joined this cohort of states who gave (announced) Ukraine international financial support during the Conference. The same is true also for the European Investment Bank, which announced a € 3bn loan for Ukraine in 2015-2016.

Czech Minister for Science, Education and Innovation informed about readiness to support Ukraine in education reform and the promotion of free media.

Notwithstanding the fact that some money was granted, international perception of the results of the donors’ conference is to a some extent pessimistic. Charles Grant and Ian Bond from the Centre for European Reform (London) assert that the EU has not shown the same unity with regard to economic support as it demonstrates in respect of sanctions, “EU leaders have not yet shown a similar determination to support the government in Kyiv. At an EU-Ukraine summit and related donors’ conference, on April 27th and 28th, EU leaders failed to come up with any fresh money. The EU should unlock its vaults, while making further money conditional on the continuation of reform.The government in Kyiv is doing enough of the right things to deserve support”.

Another case to be considered thoroughly is investments. Not many proposals were made during the conference, which was generally intended to attract highly needed FDI. I heard only from German and Dutch businessmen open declarations to invest in Ukraine in this year, but only in case if Ukraine will continue reforms, especially those concerning monetary, financial, tax legislation, as well as law enforcement and judiciary. Altogether, investment climate in Ukraine has yet to be sufficiently strengthened.

Fortunately, the Donors Conference showed that European leaders, at least those visited Ukraine, are eager to see Ukraine among the EU Member States in the nearest future and are ready to give the country financial help and promote investments. Of course, no one would agree that Ukraine will become a member of the Union in 5 years; we are still waiting for the full ratification of the Association agreement by all 28 EU Member-States and the Euratom.

The next target now for Ukraine is the Eastern Partnership summit in Riga where important decisions about visa regime may be adopted. But the responsibility for the success on the Summit lies exclusively on Ukrainian authorities, who declared their willingness and readiness to make reforms, which are almost the only condition to attract foreign help, invite investments and to achieve a European perspective.





Piotrek  |  11-56-2015
in an Irish Times article of 17 May:\"In a spceeh last November, Prime Minister David Cameron set out how we intend to... make the EU more accountable... by negotiating for specific British guarantees on the Charter of Fundamental Rights, the operation of the EU\'s competence in criminal justice and on social and employment legislation. We have been very clear that the purpose of these measures is not to frustrate or sabotage the operation of the EU but to put Britain\'s role in the union on a more positive footing.\"Can you see anything about the CFR or social and employment legislation in the coalition agreement released on 12 May, or even the one released on 20 May? So why was Hague on 17 May referring to such \"measures\"? He\'s a slippery eel and no mistake.
Prabash  |  12-03-2015
in an Irish Times article of 17 May:\"In a spceeh last November, Prime Minister David Cameron set out how we intend to... make the EU more accountable... by negotiating for specific British guarantees on the Charter of Fundamental Rights, the operation of the EU\'s competence in criminal justice and on social and employment legislation. We have been very clear that the purpose of these measures is not to frustrate or sabotage the operation of the EU but to put Britain\'s role in the union on a more positive footing.\"Can you see anything about the CFR or social and employment legislation in the coalition agreement released on 12 May, or even the one released on 20 May? So why was Hague on 17 May referring to such \"measures\"? He\'s a slippery eel and no mistake.
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