ENP country report 2010 on Ukraine (26/05/2011)
The European Commission and the High Representative of the Union for Foreign Affairs and Security Policy published on 25 May 2011 the annual “neighbourhood package”, consisting of a communication proposing a reviewed European Neighbourhood Policy (ENP), 12 country reports on developments in 2010, including one on Ukraine, as well as a sector report and a report on the Eastern Partnership.
Following Presidential elections, Ukraine underwent a change of political leadership in 2010. However, Ukraine set out its commitment to build on steps taken under the ENP Action Plan, which had been replaced by the Association Agenda in late 2009. The initial priority of achieving fiscal consolidation in Ukraine consumed a considerable effort in the administration, but established a framework which had the potential to support the launching of core reforms. The challenge as the year ended was to accelerate those reforms and to show concrete and sustainable results built upon a transparent and inclusive approach.
Fundamental freedoms such as the freedom of the media and assembly and democratic standards appear to have deteriorated, and progress on political and constitutional reforms in particular has been slow or sporadic.
Against the background of a more stable political situation, and with its initial economic stabilization measures in place, the Government could, given the right motivation and will, move forward with those reforms which are of particular importance to the EU, notably on the constitution, judiciary, electoral law and public administration . This would build on some important measures already taken in 2010 such as the Gas Sector reform law which paved the way for Ukraine’s accession to the Energy community, or the law on Access to Public Information.
Political dialogue and governance, including CFSP
- An Association Agenda replaced the ENP Action Plan in 2009.
- In early 2010 presidential elections were conducted in Ukraine and met democratic standards. However the conduct of local elections in October 2010 was criticized by most independent international and domestic experts. The CoE observation mission also highlighted a number of weaknesses.
- The situation concerning human rights, fundamental freedoms and the rule of law has deteriorated. The EU, as well as the OSCE and Council of Europe (CoE), expressed concerns regarding these trends (Statement by EU High Representative Catherine Ashton and European Commissioner for Enlargement and Neighbourhood Policy Štefan Füle on Ukraine before the European Parliament, October 2010; Resolution of the European parliament on Ukraine, November 2010; Parliamentary Assembly of the Council of Europe resolution on the functioning of democratic institutions in Ukraine, October 2010; Statement by the OSCE Representative on Freedom of the Media, October 2010).
- As regards media freedom, during the reporting period the number of cases of violence and intimidation of journalists increased, and little progress was reported in investigating such cases. In January 2011, the Parliament adopted a law on access to public information which was very much welcomed as it represents a considerable step towards government transparency.
- In the course of 2010, the authorities launched a number of gender initiatives and undertook coordination among executive agencies as part of the implementation of national gender polices.
- Progress was made in the area of trade unionrights and core labour standards with the signature of the new general agreement between government, trade unions and employers in November 2010
- Ukraine aligned itself to 26 out of 44 of the EU’s Common Foreign and Security Policy (CFSP) positions. No progress was made as regards the ratification of the Rome Statute of the International Criminal Court. The demarcation of the central (Transnistrian) segment of the Ukrainian-Moldovan state border continued with the help off EUBAM. The pending border issues with the Republic of Moldova remained unsettled.
Economic integration and trade
- The fall in GDP in 2009 is estimated to be as high as 15%, due to the global economic and financial downturn.
- In 2010 Ukraine was able to return to capital markets. The government also secured a new $15 billion Stand-by Arrangement (SBA) with the IMF in July 2010, Meanwhile, negotiations between Ukraine and the EU on a macro-financial assistance loan of €610 million were launched, but not concluded, in 2010.
- EU-Ukraine trade rebounded although total trade did not reach the levels of 2008. EU exports increased by 24.5% and Ukraine exports increased by 43.4% when compared with 2009. The EU remains Ukraine’s primary trade partner.
- On free movement of goods and technical regulations, the government adopted in May 2010 a decree ‘on approving the plan for priority measures regarding the reform of the system of technical regulation.
- Five rounds of negotiations for the establishment of a Deep and Comprehensive Free Trade Area (DCFTA) took place in 2010 with good progress being made. Both sides were able to confirm their commitment to finalise talks in 2011.
Promoting mobility, fighting irregular migration
- The EU and Ukraine deepened the dialogue on the establishment of a visa free regime for short term travel). An Action Plan on Visa Liberalization was announced at the EU-Ukraine Summit in November 2010. The Action Plan sets the requirements for visa liberalisation and identifies all the measures to be adopted and implemented.
- Currently 40% of Schengen visas are delivered free of charge under the Visa Facilitation and Readmission Agreements (active from January 2008)
- Cooperation with the Republic of Moldova on border management, particularly through the EU Border Assistance Mission (EUBAM), continued.
- Ukraine ratified, in September 2010, the Council of Europe Convention on Action against Trafficking in Human Beings. A draft law providing for enhanced prosecution for trafficking crimes and protection of victims’ rights remains subject to inter-agency discussions.
Sector cooperation - examples
- Transport: One round of negotiations on a comprehensive aviation agreement between the EU and Ukraine took place in March 2010. In November 2010 the Parliament passed the Draft Air Code at first reading.
- Energy: Significant progress took place in energy cooperation, leading to the adoption of a new gas law in July 2010. As a result, in September, the Protocol on Ukraine’s accession to the Energy Community Treaty was signed and membership was attained in February 2011. Following-up the joint 2009 EU-Ukraine conference on the modernisation of the Ukrainian gas transit system, the EU agreed to support a feasibility study and environmental and social impact study on the modernisation of gas networks and underground gas storage. Thisongoing study, is part of the due diligence process of the European Investment Bank, the European Bank for Reconstruction and Development and the World Bank. In March 2010, Ukraine adopted an energy efficiency programme for the period 2010-2015, which set, among other things, an objective of a 20% decrease in Ukraine's energy intensity. The EU-Ukraine-International Atomic Energy Agency evaluation of the safety of Ukraine’s nuclear power plants was completed. It concluded that they are fully compliant with most of the IAEA’s standards. Ukraine is making progress in addressing the shortcomings. In 2010, Ukraine further upgraded the safety of its nuclear power plants. Environment: In 2010 Ukraine adopted the national environment strategy up to 2020 and started to prepare a national environment action plan. In the field of climate change, 30 new Joint Implementation projects were approved and registered at UN level, bringing the total to 48.
- Education: The higher education reform process that is currently underway is determined by the principles of the Bologna Process: secondary curriculum reform was initiated in August with the adoption of two state programmes spanning the period 2010-15 to improve ICT, science and mathematics education and to enhance teaching skills. In 2007-2010, thanks to Erasmus Mundus grants, 551 Ukrainian students and academics could pursue studies in EU universities for up to three years.
- Health: In April 2010, in the context of last year’s influenza A (H1N1) epidemic, the Commission and Ukraine established communication channels for the exchange of epidemiological information in the event of a public health emergency of international concern In 2010, Ukraine signed a license agreement with the Commission under which the EU's pictoral health warnings could be displayed free of charge on tobacco packaging. Ukraine continued the fight against HIV/AIDS and tuberculosis, and took part in the Commission’s HIV/AIDS think tank.
- Research: Ukraine’s participation in the 7th Research Framework Programme (FP7) continued to be encouraging with an increased number of successful proposals. As of November 2010, 91 Ukrainian research entities were involved in successful FP7 research projects, receiving an EU contribution of €8.08 million
EU–Ukraine – BACKGROUND
The European Neighbourhood Policy governs the relations between the EU and Ukraine. Since 2009 the EU implements the Eastern Partnership, the Eastern dimension of the ENP framework, aiming at substantially upgrading engagement with the six Eastern neighbours via:
- a Bilateral track, whose objectives include the establishing of Association Agreements with Deep and Comprehensive Free Trade Areas, once conditions have been met, as well as progress on visa and mobility issues, and
- a Multilateral track (i.e. intergovernmental platforms and Flagship Initiatives).
This approach allows for gradual political association and deeper economic integration.
FACTS AND FIGURES
1998: The EU-Ukraine Partnership and Cooperation Agreement entered into force.
2005: The EU-Ukraine Action Plan was approved.
2007: Negotiations started for a far reaching Association Agreement (AA).
2007, 2008 and 2009: The EU's Civil Protection Mechanism (MIC) was mobilised to prepare a first assessment of the environmental damage and needs for pollution remediation efforts in Kerch Strait, in assessing the flooding of the Dnistr (Dniester) and the Prut rivers. to assist Ukraine in the flu pandemic as well as regarding a potential tailing dam collapse in Kalush.
2008: Visa facilitation and readmission agreements entered into force. Visa dialogue opened with a visa-free regime as a long term objective.
2008: Ukraine joined the WTO, paving the way for the negotiation of a DCFTA with the EU.
2007-2010: The ENPIenvelope for Ukraine stands at €494 million, with additional allocation of € 28.6 million through the Governance Facility.
2011-2013: An indicative ENPI envelope of €470.1 million was announced by the Commission.
2008-2010: The Neighbourhood Investment Facility committed €22 million to five projects in Ukraine, mainly in the energy sector. Ukraine also benefitted partially from €42 million in regional projects approved for the ENP East region.
2011-2013: The new National Indicative Programme (NIP) 2011-2013 for Ukraine was adopted in March 2010 and has a budget of €470.1 million. The programme is geared towards supporting the achievement of key policy objectives as outlined in the EU-Ukraine Association Agenda and pursues 3 priorities: (1) good governance and the rule of law; (2) facilitation of the entry into force of the EU-Ukraine Association Agreement (including a Deep and Comprehensive Free Trade Area (DCFTA)) and (3) sustainable development.
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