Positive moments
Let's start with that Kyiv and Brussels signed a joint statement, including 16 topical issues of bilateral relations. The document states that the leaders confirmed their adhesion to sign the initialed Association Agreement, including a deep and comprehensive free trade area, as soon as Ukraine shows its decisive actions and tangible progress in three areas: reforming of the electoral law, solving problem of the selective justice and continuing the reforms under Association’s Agenda. "The issues we discussed witness the depth of our relationship and the great potential thereis to deepen it even further. There is currently a historic opportunity to make a leap in EU-Ukraine relations by signing the Association Agreement/Deep and Comprehensive FreeTrade Area by the time of the Vilnius Summit in November. This is the most advanced agreement of its kind ever negotiated by the European Union. It demonstrates our commitment towards Ukraine and the Ukrainian people," Herman Van Rompuy, President of the European Council, said following the EU-Ukraine Summit.
Moreover, Ukraine and the EU signed a memorandum of understanding on the provision of EUR 610 million as a macro-financial loan to the state. The memorandum, in particular, provides for the procedure of loan tranches, set in the amounts of 100, 10, 250 and 250 million euros, the monitoring over the program implementation. The period for its implementation is to be 2.5 years upon the entry into force of the memorandum. The memorandum determines that the condition for the allocation of funds, in particular, shall be the conclusion of the European Commission on satisfactory cooperation between Kyiv and the International Monetary Fund. In addition, the parties signed a loan agreement, which establishes repayment period of 15 years, the procedure of determining the interest rates and repayment terms.
The European Union also officially stated it would continue supporting Ukraine in modernization of its gas transit system. "The EU will continue its support for the modernization of the Ukrainian GTS as a key part of the European grid network and support Ukraine in intensifying its dialogue with the International Financial Institutions in order to disburse the first loan for the emergency gas transit project “Reconstruction of Line Facilities of the Urengoy-Pomary-Uzhgorod Natural Gas pipeline, first stage," the statement reads.
Moreover, according to the energy and coal minister Eduard Stavitski, the EU promised to solve the issue on diversified gas supplies. "We have an agreement and joint plan, proving for gas supplies from Hungary, Slovakia and Poland in the amount of up to 30 billion cu m, which satisfies our import needs in full." As known, Kyiv has already signed a contract with RWE Supply&Trading company (Germany) on supplies of five billion cu m of gas.
And finally, the sides signed a memorandum on informal dialogue on business climate. Brussels also welcomed Ukraine's progress in liberalization of visa regime. In this respect, European Commission President Jose Manuel Barroso expressed a hope that the agreement on further simplification of visa regime with Ukraine would enter into force by summer. He also assured that the Commission was ready to work on visa free regime with Ukraine fast enough. However, he drew attention to the fact that the Commission was waiting for the third report of Ukraine regarding the implementation of the Action Plan on visa regime liberalization, and after the assessment of which it might be decided on transition to the second stage of the plan. Ukrainian Cabinet wanted to adopt missing laws before the summit, but blocking of the parliament by the opposition impeded it. However, there is still time, political scientist and economist Vitaly Kulik notes. "It is interesting that head of Russian FM expressed his indignation regarding the rapprochement between Ukraine and the EU on visa issue, pointing out the agreement on visa free regime for owners of biometric passports. Moscow has not got such bonus, and it bothers the authorities," the expert added.
Work to be done
The above-mentioned does not mean that certain disagreements are over. Herman Van Rompuy underlined for a reason that the EU expected more progress. "Some steps have been taken, but we still need to see more and concrete progress. Progress in these areas is realistic and feasible, but time is very short." According to the politician, Ukraine should work more on European values, democracy and supremacy of law. "I encouraged President Yanukovych to take all necessary steps to show clear commitment on the reform path, as well as determination to pursue with the implementation of an ambitious Eastern Partnership agenda." In turn, Jose Manuel Barroso emphasized that Ukraine cannot be a member of the Customs Union and have a deep and comprehensive free trade area with the European Union at the same time.
Commenting on the issue, Volodymyr Ohryzko noted that Kyiv does not have to meet all obligations before May of 2013, but for sure must show a progress in right direction. "However, I do not see a problem in adopting the Election Code, for example, or to start reforming the public prosecution service. The deadline Brussels sets is a technical moment. The fact is that to sign the Association agreement in November, the EU officials must start the procedure somewhere in June."
Traditional critics of EU aspirations are also optimistic, though in moderation. Deputy director general of Rasumkov's Center Valery Chalyi opines that the summit was tough, but successful. "I want to remind that the EU postponed the summit and the fact that it finally took place means that EU and Ukrainian leaders have something to discuss. Moreover, it looks like the sides have remained content with the results of the discussion."
Head of the "Penta" research center Volodymyr Fecenko agrees with such estimations. "The delay of summit was considered as a sign of crisis in EU-Ukrainian relations, and the fact that the summit was finally held means that the sides were interested in this dialogue."
According to estimations of former economy minister Viktor Suslov, February summit is a decisive step towards the EU, may be even too decisive. According to the specialist, the Customs Union remains an important trade and economic partner of Ukraine, and the Kremlin will not stand still and watch Ukraine going closer to the West.
Indeed, if we take the year 2012, the export to the EU made 20.9 billion dollars, while to CIS countries - USD 31.3 billion. However, after signing the Association agreement with Brussels the export to CIS will disappear, Vitaly Kulik notes. In large measure Russia depends on supplies of various Ukrainian products. Russia takes Ukrainian products not out of kindness, but due to hard necessity. Russia can replace a part of Ukrainian import, but it takes time and efforts. "That's why Moscow's threats are mainly a bluff, though Russia will definitely try to protect its markets in case of Kyiv's accession to the FTA with the EU."
So, the Association agreement between Ukraine and the EU may be signed already in November, at Vilnius summit (and then it must be ratified by all EU members). Summing up the advantages, the agreement will enable Ukraine to strengthen its political and economic positions and at the same time to weaken "gas" dependence and Russian influence on economy and trade. In turn, Ukrainian citizens will be able to enjoy simplification of visa procedures already in summer and to discover "a little bit more of Europe".
Andriy Boyarunets
