Thursday

23rd May 2019

EU gives Ukraine fresh blueprint for reforms

  • The EU wants to spur concrete reforms in Ukraine's economy and justice system (Photo: European Commission)

The European Commission has given the Ukrainian government a to-do list of 18 reforms which could trigger extra EU aid, according to a document seen by EUobserver.

"I presented to the Ukrainian side a list of key reforms which Ukraine needs urgently to develop together with possible incentives and responses from the EU," enlargement and neighbourhood policy commissioner Stefan Fuele told MEPs on Wednesday (28 April) following his visit to Kiev last week.

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The document is a six-paged table outlining concrete measures and possible EU aid in response to them, covering political reforms, macro-financial stability, the business environment, the energy sector, the environment and civil aviation.

The reasoning behind the to-do list is to ensure that Moscow-friendly President Viktor Yanukovich, who recently struck a controversial gas deal with Russia in return for letting it keeps a naval base in Crimea for 25 years, is not only talking about getting closer to the EU, but actually implementing a pro-EU integration reform programme.

Ukraine is hoping to conclude an "Association Agreement" with the EU this year, which includes a free trade agreement and may lead to visa-free travel. It does not include a promise on EU enlargement but does not exclude the possibility either.

The to-do list would not "replace" the Association Agreement, Mr Fuele said, but would help Kiev to conclude the pact.

The list also counters complaints from Ukraine that the EU "does not know what to do with Ukraine," in the words of EU affairs minister Konstantin Yeliseyev in a telephone interview with this website earlier on Wednesday.

Mr Yeliseyev suggested that the "extremely pragmatic" new leadership in Kiev may develop closer economic relations with Russia if the EU does not put forward "real deliverables."

Some "deliverables" are included in the table, for instance a €610 million financial aid package "and scaling up of untargeted aid" if the country manages to get the stand-by agreement with the International Monetary Fund back on track. Ukraine contracted a €12.5 billion loan from the IMF in 2008, but payments were suspended last year because Ukrainian politicians failed to agree on a 2010 budget in line with IMF requirements on transparency.

Judicial reforms - ensuring the independence and efficiency of courts - could be rewarded with up to €10 million, while the modernisation of the gas transit system could see "significant investments" if the gas market and companies operating it become more transparent. The financial need estimated for this sector is €2.5 billion.

Last year, the Ukrainian government led by Yulia Tymoshenko signed up for a whole package of reforms in the energy sector, paving the way for western investments in the gas transit system. But little has happened since, with political bickering preventing a key law from being passed by the parliament. One of the "short term" measures required by the EU is precisely for this law to be re-submitted "without amendments" and adopted by the legislature.

Mr Fuele described the new list as a "political steering" instrument for the new Ukrainian government, which is set to present its ruling programme in June.

The EU list, according to Mr Fuele, has the backing of both the government and the embittered opposition party of former premier Yulia Tymoshenko.

Scenes broadcast on Tuesday showing Ukrainian MPs throwing eggs and smoke bombs at each other, suggest a different political climate than the one that Brussels is hoping for.

Mr Fuele said that the new government's declared commitment to EU reforms is reassuring but his optimism is dependent on "deeds" not "words.

EU commission counters Ukraine complaints

Ukraine does not have to choose between Brussels and Moscow and the EU is committed to helping it financially, the European Commission said on Friday (30 April) after Kiev voiced strong criticism of EU policy.

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