Overload

Michael EMERSON, an expert at the Brussels-based Center for European Policy Studies, has been following the integration processes in Ukraine for many years. And, unlike the EU officials, he can speak openly about Ukraine’s real European prospects and say what Brussels expects from Kyiv.

Mr. Emerson, what is your assessment of Ukraine’s progress on the way toward EU and of the claims Ukrainian officials make about some great achievements?

“Yes, indeed, progress has been made in that we started drafting an EU Association Agreement [with Ukraine]. Also the work has been started on a component of the Agreement that pertains to the free trade zone. But this work has not been completed.”

Can you see any strategy, will, or desire of the Ukrainian side — the president and the prime minister — to fill the above-mentioned agreement with real meaning?

“As far as the component on the free trade zone is concerned, I, for one, believe that the Ukrainian government has made a mistake by temporarily setting the customs duty at 13 percent. This decision may be challenged in the WTO, because the hryvnia has lost 40 percent of its value, which has increased the competitiveness of the Ukrainian producers. Therefore, the introduction of this duty may have been illegitimate. In general, it contradicts the very idea of an expanded free trade zone.”

In other words, you see contradictory steps taken by the Ukrainian government and president?

“I’m afraid so. However, the situation is really complicated, but taking into account the devaluation of the hryvnia, I don’t think that the implementation of the customs duty was economically justified.”

Mr. Emerson, what does Brussels think about the current prime minister? Do they believe that she will be able to carry out reforms needed to overcome corruption in the country?

(silence)

Let us approach this question from a different angle: What signals or actions does Brussels want to see from the Ukrainian side in order to believe that Ukraine really wants to carry out reforms and implement European standards to get closer to the EU? In this case Ukraine could expect more aid from the EU in order to speed up its integration.

“This is absolutely obvious. Brussels would like Ukrainian politicians to get together, act jointly, and form a harmonized government. This is up to Ukrainians to elect politicians. But Brussels’ absolute demand is the existence of a harmonious government.”

In your opinion, should the EU provide any aid to Ukraine to help it survive the current crisis?

“I think that the EU must prepare a broad economic and financial aid package. This is a critical moment. Entire Eastern Europe is in a complicated situation. Therefore I believe it is a positive step that the International Monetary Fund has organized aid for the European banks, including Ukrainian ones. But this might be insufficient.”

What else should be done?

“A question arises about whether it is necessary to do anything else to recapitalize banks or complement the balance of payment, the loan, and the macrofinancial aid provided by the International Monetary Fund. During the economic crisis of 1998 the EU frequently acted in tandem with the IMF, sharing the burden of the financing conditions.”

Mr. Emerson, in your opinion, will the Eastern Partnership initiative help Ukraine carry out reforms and get closer to the EU? Some Ukrainian politicians admit that this program does not receive enough funding to make progress.

“The amount of grants has to increase. But it is still a small sum as compared to the money needed to save, say, the banking system or overcome the recession. The money envisaged by the Eastern Partnership program is meant for long-term technical assistance projects. But this is something different than rescuing the Ukrainian economy from depression.”

Will this financial aid help realize projects aimed at reforming, modernizing, and Europeanizing the country?

“It may. But a very serious problem is how this money will be spent. Some new EU members, specifically Bulgaria, had problems with using money from the EU. Therefore, I believe that similar problems may arise in Ukraine as well.

“In case of Bulgaria, the EU introduced strict procedures, which helped improve governance in the country. But relations with Ukraine are narrower, and this type of interference with the affairs of the Ukrainian government does not seem very likely.”

Mr. Emerson, in your opinion, how did the Ukrainian side accept the Eastern Partnership initiative?

“Many Ukrainian politicians and officials have taken this initiative in a positive way, at the same time maintaining the belief that it is not a replacement for the European prospect.”

Is the prospect of Ukraine’s EU membership becoming closer or, on the contrary, more distant?

“It is a long way to the European membership, and not only because of the Ukrainian side. Ukraine is partly to blame for this, but the situation within the EU is also an obstacle. Even if Ukraine joins the EU, it will be the 37th member of the European Union. Now the EU has 27 member countries, while six more countries are waiting for their turn. Besides, we cannot exclude Iceland, Turkey, and Moldova. In fact, Moldova may become the 37th member of the EU, while Ukraine will be 36th. But this will be a good question.

“The problem is that the EU has made a ‘leap’ from 15 members to 27. The legal, legislative, and economic systems of the EU are very complicated; they are a very delicate mechanism. Ukraine should not be viewing the reservation concerning the prospect of its membership as an unfriendly attitude. People working in the EU know how the EU operates and how difficult it is to accept that the Constitution was rejected at a referendum. Now we may reach an agreement on reforms. But all these political processes are very complicated and complex. If you overload a boat, it will sink. That is why the issue of Ukraine’s membership is a question for both the EU and Ukraine.”