EU and Ukraine pursue cooperation amidst pandemic

On Saturday, 16 May, Ukraine will celebrate Europe Day. For the first time in 14 years, it will be held without any festivities for the obvious reason – the pandemic, which did not left Ukraine and the European Union unaffected as well.

Katariná Mathernová of Slovakia, one of the European Commission’s top representatives concerned with Ukraine, says half-jokingly that she was directly “victimized” by the epidemic. In early April, Peter Wagner, Head of the European Commission’s Support Group for Ukraine, left his post to take helm at the group tasked with combating COVID-19. Presently, SGUA is headed by Katariná Mathernová, Deputy Director-General European Neighborhood and Enlargement Negotiations.

Today, she is responsible in Brussels for coordinating support for Ukraine, for reform dialogue, etc. In her interview to European Pravda given on the eve of Europe Day, she spoke about these aspects and also about the prospects of the visa-free regime, about trade and about expectations from the Ukrainian government.

Because of the quarantine, we communicated remotely, in several phases; nevertheless, our conversation was quite frank.

“1.2 billion euros is a loan. It is in the government’s interests to utilize it in the most efficient way”

– How did the pandemic affect the relations between Ukraine and the EU?

– It has affected all of us in the same way – we faced both a tired society and economic problems.

As for bilateral relations, the first consequence was the suspension of visits (of European officials to Ukraine and Ukrainian officials to the EU). But that did not stop the dialogue with Ukraine: even though we cannot meet personally, we still actively communicate with each other, particularly via video streaming.

And the second change was that we have adjusted our programs of supporting Ukraine to make them suitable for the new needs which arose as a result of the coronavirus crisis. We are trying to accommodate both the urgent needs related to healthcare, to epidemiological situation, and the needs of economy: supporting liquidity and helping the Ukrainian economy recover faster after the crisis.

– Did you shut down certain support programs?

– I wouldn’t talk about shutdown – rather, we restructured them. For example, we wanted to launch a program of supporting vocational education in Ukraine in 2020, but now decided to get back to it the next year.

We are trying to change the existing programs to make them useful in view of the epidemic. This is the aid to Eastern Ukraine, which provides support to small businesses, public activists, etc. This is also the assistance which the EU provides via cooperation with international financial institutions. There are also support programs, including support via WHO, aimed directly at overcoming the consequences of epidemic, such as procurement of personal protective equipment for medics.

And finally, Ukraine will receive the biggest share (1.2 billion euros) of the 3 billion-euro macro-financial assistance program for the neighboring states.

– There are accusations voiced in Ukraine about misuse of public funds allocated to combat the epidemic. Are there any safeguards which could assure you that this assistance will be spent the way it should?

– First of all, I’d like to stress that I won’t comment on the accusations you were talking about.

Let me remind you that macro-financial assistance is a loan. Even though is it provided on very loyal terms, this sum of 1.2 billion euros will still have to be repaid. Therefore, it is in the interests of the government itself to utilize this money in the most efficient way.

Nevertheless, there is also non-repayable aid which we provide to Ukraine.

We have grouped two aid packages, which we planned to provide to Ukraine anyway, and changed their purpose to that related to COVID-19. The first package was for 80 million and the second for 110 million, which means that we’re talking about 190 million euros we mobilized in support of Ukraine.

“I’m surprised that some people have doubts as regards the overdrive regime”

– It is hard to implement reforms in the time of epidemic, because the parliament does not function properly.

– Well, last autumn the speed of reforms in the parliament was so fast that today, the slowdown was natural and could be expected.

It was also amplified by the epidemic, but you could not continue to pass laws at the same speed as between September and early December 2019.

– You think that reforms were fast? Many in Ukraine doubt that.

– Yes, they were incredibly fast. We saw a lot of laws which we long waited to be passed, and therefore, I am surprised to hear that some people have doubts about that.

Still, reforms continue even today.

The approval of land reform was a very brave move.

There is so much misunderstanding and mythology surrounding the land market in Ukraine that the opening of this market was politically challenging.

Or take amendments to banking legislation. This law is the key indicator for cooperation with the IMF, and in turn, the IMF program is a precondition for the receipt of 1.2 billion euros in macro-financial assistance from the European Union.

– A monitoring of progress in implementation of the Association Agreement reveals that during the past year, the speed of reforms was perhaps the lowest.

– I don’t think that implementation of the Association Agreement should be assessed only based on the amount of work done. Therefore, I wouldn’t want to count the number of laws passed during a particular period.

What has the key importance is implementation of reforms which change the country in a structural way (for example, change the system of public administration), which ensure wellbeing of citizens, which integrate the economies of Ukraine and the EU, so that people can see the benefits from our association. An example like that is land reform, which after complete liberalization of the land market – even though that would not happen during the first phase of reform – would produce a truly large transformational effect on your economy and society.

The lawmaking work is presently complicated indeed. However, reforms are not only about passage of laws but also about their implementation, so that’s what Ukraine must focus its efforts on in the nearest few months, as soon as it passes the peak of epidemic.

– The government is also constrained by the quarantine.

– But that will change one day – I see that Ukraine, as well as the entire Europe, begins to lift quarantine restrictions.

“This summer won’t be like any other summer we saw until now”

– By the way, speaking about the lifting of quarantine. When could the EU open its borders to Ukrainians?

– In fact, even inside the EU and even inside the Schengen Area there is no clarity as regards the opening of borders. Let me cite as an example my country, Slovakia: if I decide to fly there, I would have to spend two weeks after arrival in quarantine.

This is an illustration of the fact that we have not reached the point where we could talk about the opening of borders yet. We have created “green lines” for goods, but passenger traffic remains subjected to numerous restrictions, even inside the EU.

– Is it fair to say that EU borders will definitely not be opened this summer?

– I would not make assumptions like that, either. The situation is being constantly reassessed and all forecasts are being revised. Let me again cite the example of Slovakia: today, the country reopens its economy much faster than it could be expected even a couple of weeks ago, because the results of quarantine very much exceeded the expectations.

We lack the knowledge [about this disease] to plan our policy even for late June or July. And I don’t think that anybody can foretell that precisely. However, I am sure about one thing: this summer won’t be like any other summer we saw until now.

Even if the borders are opened, travel will be accompanied by restrictions.

– Is there any danger to our visa-free regime?

– Not because of the coronavirus crisis, anyway. I never heard even discussions in Brussels about that.

The visa-free regime has nothing to do with the epidemic.

After all, even thinking logically: how the reinstatement of a visa regime would have helped in fighting the epidemic?

I am also not aware of anything that could pose danger to visa liberalization for Ukraine for any other reasons. The European Commission revises annually the compliance with visa liberalization terms, and we can point attention [of countries whose citizens travel visa-free] to certain indicators, but in the case of Ukraine, there weren’t any grounds at all to even start this discussion. And I repeat: there is no relation at all between visa liberalization and the ongoing crisis.

“There are several conditions for efficient European integration”

– Let me get back to reforms, to another “visa-free regime” – industrial – which Ukraine considers a priority. This year, one or two assessment missions were expected to visit Ukraine. Presently, their visit is not possible. Is there any chance for us to move toward the “industrial visa-free regime”?

– We are working on that, and the European Commission wants to make headway in this process. Unfortunately, the crisis slowed down this process, but we are able to do the “office” part of assessment and will start it very soon: in a few days, the EU Delegation to Ukraine will start procuring services of consultants who will be engaged in this task. We will also be able to have a part of talks with the Ukrainian government done even before travel restrictions are lifted.

Surely, in order to complete this process, experts of the European Commission will have to actually visit Ukraine to see for themselves how the checks [of safety of goods to which the “industrial visa-free regime” will be accorded] are done, and how technical centers operate. This is something that must be done. But we agree that it should be done as soon as possible, and therefore, we are looking for the opportunity to complete a significant part of this work during the quarantine, before we overcome the epidemic.

– The implementation of reforms and fulfillment of association agreement are “overseen” by the Government Office (GO) for Coordination of European and Euro-Atlantic Integration. You probably know that this agency has serious staffing problems: the head of office has not been appointed since late autumn, there is only one deputy, and key experts are unavailable.

– Let me start by saying that the Ukrainian government is desirous of integration with the EU, and this desire is as strong now as in the previous years. This entire process is built around the Association Agreement, and the Government Office is, of course, the key institution and the main driving force that shapes the policy and coordinates the government’s efforts.

We want to see the Government Office fully staffed and comprised of talented professionals, who in the coming years will accelerate the implementation of the Association Agreement under supervision by a very efficient Vice Prime Minister and in cooperation with other ministries.

– But still, what must be done to make the Government Office more efficient? What kind of impetus it needs?

– In order to make GO efficient, several conditions must be met.

Firstly of all, the Government Office needs strong authority to coordinate and direct European integration policies of various ministries.

Secondly, instructions and recommendations issued by GO must be binding upon other government institutions. Its stance must be taken into account when adopting legislation and strategic documents concerning implementation of the Association Agreement.

Thirdly, GO must be fully provided with resources and have a staff comprised of highly skilled professionals.

Fourthly, the rules of procedure of the government and parliament must ensure harmonization and reliability of the lawmaking process and the quality of proposed draft laws and policies.

If all these conditions are fulfilled, the Government Office will be able and willing to perform its functions with the previously unseen vigor. All these recommendations and conditions aren’t something new. The experience of past enlargements of the European Union proves that the availability of a strong, properly provided for and dedicated agency responsible for European integration is a very important component of success. And to succeed, it also must work closely with the parliament and other agencies responsible for implementation of the Association Agreement with the EU.

By the way, the European Union helps you with that, strengthening GO via Association4U project. And the majority of more than 55 positions in the Government Office have the status of “reform specialists”, whose provision is supported via EU programs.

“We will not cap imports from Ukraine”

– Did coronavirus and quarantine affect the trade between Ukraine and the EU?

– Surely, the pandemic affected the trade. We do not have statistics for March and April available yet, but it is very likely that most sectors do have problems. The steelmaking industry important for Ukraine became one of the sectors affected the most badly.

Still, there are several exceptions from this trend: certain agricultural products and certain products designed to fight the epidemics, the sales of which have increased.

All in all, the EU remains the most important trade partner of Ukraine responsible for almost 40% of Ukraine’s sales turnover in goods.

– There are voices in the EU calling to cap the imports of sensitive goods because of the pandemic, which would affect Ukraine. Hungary suggests capping the imports of chicken. Is it real?

– No, the EU has no intention to impose any special restrictions to protect internal producers because of COVID-19. There are no changes at all in this respect; protective mechanisms are applied only in strict accordance with the Ukraine-EU Association Agreement and the EU’s commitments within the WTO framework.

– The Ukraine-EU summit must be held every year, and the Eastern Partnership summit every two years. In view of the pandemic, is there a chance that these summits will take place?

– As for the summit with Ukraine, the decision to postpone it has already been made. We have agreed back when the quarantine was introduced that we will hold it at the end of this year.

Speaking about the Eastern Partnership summit, we are waiting for decision from Charles Michel, President of the European Council. We hope to have it within a week or two.

But I would like to point out that that Commissioner Várhelyi was able to visit Ukraine in late February, before the quarantine. The visit of Josep Borrell, High Representative of the European Union, was postponed because of the suspension of flights, but he already said that he will come to Ukraine on one of his first visits, after travel restrictions are lifted. The attention to Ukraine is definitely there.

Interview by Serhii Sydorenko

Source: European Pravda