Issues in EU-Ukraine Relations

Ukraine’s Quest for Mature Nation Statehood Roundtable XI:
“Compelling Bilateral Ties/Germany-Ukraine & Russia-Ukraine”

Issues in EU-Ukraine Relations as Viewed Through the Prism of German-Ukrainian Relations

Bruce Jackson

Remarks by Bruce Jackson, President of the Project on Transitional Democracies, delivered at Ukraine’s Quest for Mature Nation Statehood RT XI: Compelling Bilateral Ties/Germany-Ukraine & Russia-Ukraine, held in Washington DC on October 21, 2010.


Relations between Ukraine and the EU in the first year of the Yanukovych/Azarov Government can be divided into two classes of economic and political issues.

The economic issues are mostly driven by the European Commission within the Association process, and the political questions are dominated by EU member states, notably Germany.

I will try to outline the major issues in both classes and to point to where national governments, such as Berlin, have had a significant influence on the overall relationship.

The Objective and Economic Issues:

At the EU-Ukraine Summit on November 22nd, the three big issues will be Travel, Trade and Transit.

Travel refers to the discussions of visa-liberalization which will likely result in the signature of an action plan for the parties to follow in a longer effort to achieve a real liberalization of the onerous EU visa regime. Here, EU member states are dragging their feet for the most shameful and short-sighted of domestic, political reasons.

Trade refers to the DCFTA negotiations which have gone painfully slowly in the last years of YT and in the early months of VY. The larger obstacles are on the Ukraine side which fears that antiquated industries (cars, manufacturing, grain processing) will be wiped out by far more modern European companies in a free trade system.

The EU, however, is not without blame and insists that agriculture, transport and certain services markets must remain closed to all but EU members, thus obviating many of benefits of free trade for Ukraine.

Finally, there is Transit which is shorthand for the debate on the modernization of Ukraine”s gas transit system which remains among the most corrupt, nontransparent, and inefficient in the world. Here both sides agree to work together on modernization but have no idea what this would mean in practice.

The Gas Transit debate has been further complicated by the Russian-European plan to build a new pipeline, South Stream, which would completely by-pass Ukraine.

Despite President Yanukovych”s repeated commitments to agreement in all three areas, discussions have been fraught and frustrating all summer and can be summarized as follows:

EU is getting “cold feet” on visas. Some progress by Ukraine has been made on trade. And a three-sided EU-Ukraine-Russian stalemate is holding up serious discussion of modernizing Ukraine”s gas transit system (GTS.)

The Subjective, Political Issues:

There is a second basket of democracy and human rights issues which are unquestionably important even critical in EU-Ukrainian relations, but which are defined by the broader international community, EU member states and civic society.

Today, the top three are Elections, freedom of press and NGO”s, and constitutional reform.

At the risk of offending activists on these important issues, it is worth pointing out that these issues are slippery and open to vastly divergent interpretations. Even establishing the basic facts is not easy in Ukraine.

The municipal elections on October 31st are an important test of the integrity of the new Government and prefigure the far more Parliamentary elections in two years. Free and fair” is not a scientific standard and it will be difficult to judge the openness and transparency at the municipal level, which is why international monitors usually do not observe municipals. There are something like 12,000 candidates running in the municipal elections.

Secondly, there is the question of whether the media and NGO”s are being harassed by the Government. Like pornography, harassment is difficult to define, but you know what it is when it happens to you. There have clearly been instances when the SBU has been over the line between the State and civil society and has been forced to apologize in several cases.

But opinion will differ whether these were individual incidents or a systemic, policy-driven abuse of media and political rights. Germany has expressed serious concerns about the questioning of Nico Lange.

Finally, there are questions about the overall direction of constitutional and related reforms. Do they tend to create a more stable and accountable Government or do they lend themselves to a dangerous consolidation of authoritarian power.

The short answer to the political questions with center around the quality of Ukrainian democracy is that we do not – and cannot – know at this point. Opposition figures, crusading journalists, bleeding heart NGO”s, world weary French diplomats, and Wall Street bankers will all have a different opinion.

Nevertheless, the preponderance of opinion among the international audience which follows Ukraine certainly has a major impact on the EU-Ukraine relationship. And, an increase of doubt and risk on the political side will cause delay and even reversal in the Travel-Trade-Transit negotiations.

A Brief Discussion of German Influence:

Germany has been a constructive, but often critical influence, on EU-Ukrainian relations.

On Travel and Trade, Germany has been more generous than most EU members, because Berlin understands the importance of liberalizing trade with Europe”s East.

On Gas Transit, Germany is probably a bit more skeptical about the reliability of the Ukrainian gas sector due to its considerable experience with Ukraine on the subject.

Germany has been most vocal on the harassment of the Konrad Adenhauer Foundation – as one might expect – and remains concerned about the failure to refund VAT to European businesses and the deterioration of the business environment.

All German views – both positive and negative – have been subsumed in the overall EU approach to Ukraine


Where do things stand in the EU-Ukraine relationship? It is really quite simple.

Ukraine needs to show progress on October 28th when EU Trade Commissioner de Gucht visits Kyiv. The opening of even a limited free trade system between Europe and Ukraine would be a watershed event in post- Cold War Europe.

Ukraine needs a free and fair election on October 31st. Not because anyone in Europe knows or cares who is running in Kharkiv or Odessa, but because elections are the acid test of European democracy.

Both Ukraine and the EU need a productive Summit on November 22nd. Ukraine because it needs to show it can make the painful cuts and compromises required for European integration. And the EU because it needs to show that Association and the Eastern Partnership are real policies which can produce positive developments in Europe”s East.

And finally we all need to see gradual and progressive improvement on Government corruption (both former and current), in limiting the incursion of the security services into the media, NGO”s and church, and in the overall business environment.

If these things are not done, this will be yet another Lost Decade in EU-Ukrainian relations. And the third lost decade in a row.

But if the EU and Ukraine are successful over the next few months, we may well look back at the period between the achievement of Ukraine”s agreement with the IMF and the signing of EU Free Trade Agreement as the most productive period in Ukrainian politics since the end of the Soviet Union.