An exclusive interview by Matti Maasikas, Head of the EU Delegation to Ukraine, to Interfax-Ukraine
On Wednesday, the European Commission announced allocation of over 190 million euros to Ukraine to fight the spread of coronavirus disease in our country. Earlier, the EU provided the first package of support to Ukraine in the amount of 80 million euros. Why did the EU decide to increase the amount of assistance, and what this money must be spent on first of all?
The EU’s response to the global crisis was taking shape gradually. Having experience in the assistance provided by the EU, I must say that the EU’s reaction changed quite fast. From the initial amount of some 80 million euros, the assistance has presently increased to 190 million euros which we were able to mobilize for Ukraine, working in three major areas.
Firstly, support to urgent needs of the Ukrainian healthcare system. We work with a number of partners, such as the World Health Organization and others.
Secondly, assistance to Ukrainian civil society. For centuries, the society in Ukraine always provided care for people who needed help the most. Today, volunteers are again on the frontline, helping people who cannot leave their homes and the elderly, bringing them food, helping teachers work online. Therefore, this is a very important area for people who need help the most.
And thirdly, we work with international financial institutions, such as the European Investment Bank and others, to open lines of credit for small and medium-sized enterprises in Ukraine. This crisis makes itself felt by closing down the majority of economy; it has already taken its toll. Therefore, support provided to small enterprises will be extremely important.
We hope that we’ll be able to tell details of all that very soon, in a matter of few weeks. These are the main elements and the main areas of this assistance.
At the same time, I would like to emphasize that the EU’s assistance to the agenda of reforms in Ukraine and other things we take care of, such as decentralization, public administration reform and other, also continues. For in situations like that, some might fully focus their efforts on the most acute needs, and that’s what we do, but we do not put aside other work and other assistance as well.
The last thing I’d like to emphasize in this regard is that we all, European countries, together fight it. And the help which Ukraine provides by sending its doctors to Italy is highly appreciated in the EU.
Speaking about the EU’s assistance to small and medium-sized businesses, what are the initiatives in this area?
Yes, we are working on the lines of credit to provide 10 million in hryvnias and another 10 million in euros. Work in this area continues. I am eagerly waiting for the opportunity to announce concrete details soon.
There are fears that residents of the occupied territory of Ukraine can be victimized the most by the COVID-19 pandemic. What help is the EU already providing or going to provide them?
You are absolutely right. The situation in the government-uncontrolled territory needs to be considered especially thoroughly. We do not have sufficient information about what’s going on there. The figures we hear are very low. The contact line was closed. Some humanitarian convoys were able to cross the line, so we indeed are trying to do everything we can, together with partners like the UN and WHO. In the government-controlled territory of the Donetsk and Luhansk Oblasts, the situation is also fragile but less critical.
Perhaps you know that yesterday, Ursula von der Leyen, President of the European Commission, presented a global package of 15 billion euros to fight COVID-19. She made a special emphasis upon the assistance which we have already provided in Eastern Ukraine. It was among the most important points she mentioned. And I am very proud of that.
The EU Delegation also announced that the EU is prepared to provide 500 million euros to the state budget of Ukraine as a low-interest loan under a macro-financial assistance program. What are the terms of this loan?
This is macro-financial assistance, the remaining tranche of 500 million euros as you correctly said. Ukraine fulfilled the EU’s special conditions back in December of last year. So now, the remittance of this tranche is tied to implementation of the IMF program. As soon as we receive “green light” from the IMF, the EU will be able to transfer that amount in a few weeks. I am very happy that the EU’s special conditions have been fulfilled. You all know what is on the Verkhovna Rada’s agenda today (MPs submitted over 16 thousand amendments to the draft “banking” law 2571-d, on which the assistance to Ukraine from the IMF depends – IF). It must be done, too, and after that, we will be able to provide assistance.
There were also reports that Ukraine can take advantage of the EU’s new medical security initiative and of consultations from specialists of the European Center for Disease Prevention and Control. What exactly is this about? And how it can be done in practice?
This medical security initiative is a new five-year program. And yes, it is going to be implemented by the European Center for Disease Prevention and Control in Stockholm. Ukraine has already worked with this agency in the past. All EU agencies are open, and all of them have regulations on cooperation with partner states. It very much depends on the cooperation initiative of partner states.
Coronavirus, COVID-19 is something new for all of us; there is no vaccine against this disease, so work continues, but medical and scientific experience and knowledge can be shared via this Center for Disease Prevention and Control. And that’s where the Health Ministry of Ukraine must be very active. Cooperation like that was offered.
Speaking about the help from Ukraine, the situation in several EU member states remains critical, and therefore, any help is more than welcomed. We highly appreciate the help which Ukraine has already provided to Italy. And of course, we all understand at the same time that the main focus of every EU member state or partner state is on fighting the spread of this virus at home – that’s what everybody focuses their efforts on.
What is your opinion regarding the steps and measures taken by the Ukrainian government to combat COVID-19? Is the Ukrainian government resolute enough in its actions?
I am very meticulous in observing all measures, restrictions and directives of Ukrainian authorities. If we take a look at the global picture of measures taken by governments, we could see that the response from Ukraine was early and resolute. Obviously, I do not have the competence to propose something. But from what I can see, the response was early, clear and resolute.
To be sure, all countries which took these measures are facing a very critical challenge, very critical balancing. The most part of the Ukrainian economy was shut down. This morning, I read on the news that 6% of Ukrainian companies are on the verge of bankruptcy or quitting the business and closing down.
You heard what Prime Minister Shmyhal said, in particular, about continuing work and analysis of the stage at which the economy would be able to reopen. This is a very difficult choice. And I have full respect of all political leaders who must face this choice.
What are the EU’s expectations as regards the impact which COVID-19 may have on the Ukrainian economy and our country in general? Perhaps you have an advice for Ukrainian authorities on how to overcome this crisis?
First of all, I would like to note in the context of our cooperation that I appreciate the good cooperation which we and the embassies of EU member states had with Ukrainian authorities, especially with the Foreign Ministry of Ukraine and Minister Kuleba, regarding organization of special flights to help EU citizens and Ukrainian citizens – family members of EU citizens leave Ukraine. It was very good and uninterrupted cooperation, which I appreciate.
I also appreciate the efforts the government takes to coordinate assistance. There are several players, and the EU is only one of them. There are also the UN, WHO, individual member states – everybody’s fighting the virus at home, but help is also provided. We – partners and donors – also coordinate our efforts. And today, it is reflected by governments and helps very much.
Let’s now go to your question about the Ukrainian economy. Globally speaking, there were questions, beginning from the first blockings in China, about whether we have been globalized excessively. I mean broad and perfect production and sales chains which occurred as a result of globalization. Is it safe, let alone sustainable?
It is easy to predict that we will be hearing voices, saying that time has come for the greater economic nationalism. Can you trust, when making your investment decisions, can you really trust those very long production and sales chains? This discussion continues. Perhaps, it only begins. And every country, every economic player must make this choice.
Ukraine has the advantage of being geographically in Europe, being geographically very close to the EU, and our economies are becoming more and more interdependent. And it is vitally important to preserve, to maintain these ties, because geography cannot be changed, can it? And one cannot change economic realities, which tell us that we are the largest and richest single market in the whole world. These are definitely the elements which must cross one’s mind.
Next. We conduct this interview online. I am sure that in your professional life, you have already had several interviews in this format. I suppose that your meetings with colleagues take place online. And the companies which presently do well are large technical and online companies.
So, it is not hard to foretell that we shall see a wave of online, digital economy, and in this regard, Ukraine is again in a very good shape. Your IT boom has already begun, and I am sure that it will continue to move forward, to grow further.
I have to tell you that I am currently also self-isolating and order goods [online], and I am very happy about the flexibility and openness of Ukrainian companies. Delivery and online services work very well. You are in a good shape in this regard.
What is your take on the reforms which have already been implemented in Ukraine to date, and what reforms do you think must be implemented in our country as soon as possible?
Of course, there are several areas here as well. Beginning from the last autumn, a lot has been done in terms of liberalizing the economy, which, and I think that we all will agree with that, Ukraine still needs.
We had several positive examples, several events: implementation of the Ukraine-EU Association Agreement and the Ukraine-EU Agreement on the Deep and Comprehensive Free Trade Area.
Again, speaking about production standards and the opening of your economy, we had very positive progress in the energy sector, particularly in the natural gas sector. Your gas system is now fully conformant with the EU system. In the energy field, a lot still needs to be done. Therefore, all this work must continue for economic wellbeing of Ukrainians. After all, your government and your president do that for your citizens, not for international partners.
Of course, once you start discussing Ukraine with potential investors and EU players, the subject of the supremacy of law and fight against corruption begins to surface.
There are even more important tasks which the Ukrainian government still needs to accomplish. I mean that the Higher Anticorruption Court is now operational, and we expect verdicts. The NABU does a good job. Other agencies, such as the National Center for Corruption Prevention, have been rebooted. And the Office of the Prosecutor General: a sweeping reform has been launched and carried out, and it must be subsequently implemented. And the new Prosecutor General assured us that these reforms continue, presently at local level.
And of course, completing the process of adopting the law regulating the banking sector. This is an acid test in many respects. There is one question at the core of it. If I’m not mistaken, 15 billion dollars in Ukrainian taxpayer money has been allocated in recent years on regulation of the banking sector to patch holes in the banking sector. I want to be sure that this situation will never repeat again, and the law regulating the banking sector will be passed. But somebody might also ask: if such an amount of taxpayer money was channeled into the banking sector, doesn’t the government, the central bank want to demand back this money which disappeared in banks, diplomatically speaking?
And in this respect, the law regulating the banking sector, which is tied to the IMF and even more so to Ukraine and the Ukrainian society, represents a vital check.
How do you think the present crisis would affect the relationship between Ukraine and the EU in general? And how, in your opinion, the present crisis could be turned into opportunities in the relationship between Ukraine and the EU?
First of all, we fight this virus together, we work together, and that makes us closer to each other. Joint work makes people closer to each other and makes them meet each other. And of course, crisis situations wake up everything the best in people – there is a humane element in that.
On the EU-Ukraine agenda, everything remains the same and work continues. Later this year, we will have another Ukraine-EU summit and an Eastern Partnership summit. We held a very successful Ukraine-EU Association Council in January. There are several areas, such as the famous ACAA agreement, which were launched and which must be fulfilled. Our political relations are flourishing.
How this work is being done? Perhaps there will be a change of formats and online meetings?
Online meetings are already being held.
And what about the Eastern Partnership summit in June?
We don’t know what situation will be in June. But I am not in the position to give you additional information. If there will be certain changes, Charles Michel, President of the European Council, and his colleagues, heads of state and heads of government of Eastern Partnership states will discuss and handle that. But the summit will take place, that’s for sure.
Amid the crisis caused by coronavirus, the Russian government intensifies the efforts aimed to get sanctions lifted for humanitarian reasons. What is the EU’s stance in this regard?
First of all, let me emphasize that no EU sanctions can prevent a country subjected to EU sanctions from fighting the crisis. These restrictions and sanctions do not apply to medicaments and similar things.
In addition, EU sanctions are politically tied to the complete implementation of the Minsk Accords by Russia. EU leaders collectively repeated that on many occasions. And that will not change.