Dr Charles Tannock

Member of the European Parliament for London

The Ukraine and the EU

Speech to Ukrainian Parliament - October 1st 2003

The European Commission recently published a paper aimed at bringing some coherence to the EU's relations with its Eastern and Southern neighbours following Enlargement in 2004, and to achieve a number of desirable objectives including an increase in economic growth and external trade, and the creation of an enlarged area of political stability through a 'ring of friends' with whom the EU enjoys co-operative relations.

It is argued that threats to mutual security will require joint approaches. Levels of inward investment in all the countries covered by this document - Russia, the western Newly Independent States (NIS) of the former Soviet Union including Ukraine and the Euromed group of the Southern Mediterranean are currently low and there needs to be effective and independent judiciaries equipped with the powers to protect property rights.

The Commission stresses that it wishes to avoid drawing new dividing lines in Europe (although this will inevitably happen) and recognises that a user-friendly system for small cross-border traffic is essential. The aim is to encourage free multiple entry Visas as already agreed by Poland who will have to introduce a Visa now in October for Ukrainians.

The idea is to build on existing Partnership and Co-operation Agreements (PCA's) with Russia, Ukraine and Moldova, It is envisaged that in return for reforms, including Ukraine aligning its legislation with the EU's, it should benefit from the prospect of a stake in the EU's Internal Market and further integration and liberalisation to promote the free movement of persons, goods, services and capital - the so-called 'four freedoms'. In effect everything bar participation in the Institutions.

The Commission stresses that in order to counteract criticism of the document banding all the EU's neighbours together in an undifferentiated one-size-fits-all policy that the process should not be confused with the issue of EU accession, pointing-out that Article 49 of the Treaty on European Union stipulates that any European state may apply to become a member of the EU (which would seemingly apply to Ukraine, and Moldova who, unlike Belarus and Russia, have expressed a definite interest in becoming eventual EU members), whilst accession has already been ruled-out for the non-European Mediterranean partners. However a separate framework for Ukraine and Moldova will need more explicit acknowledgement to avoid the danger that Moldova and the Ukraine might see the process as a way of distancing the EU from their future membership aspirations.

Different stages of reform and economic development also means that different rates of progress can be expected and the process will involve use of benchmarks, neighbourhood policies and action plans. The Single Economic Space agreement just signed with Russia, Belarus and Kazakhstan may jeopardise this process.

Also, there is scope for improvement in that the current PCA's grant neither preferential treatment for trade nor a timetable for regulatory approximation. One major change would be the additional freedom of movement for persons although this would appear to conflict with plans announced by the Italian Presidency to limit large-scale immigration into the EU. There are also risks the movement of skilled and educated people will disadvantage Ukraine if it is “brain-drained” of the very people it needs to develop its economy. Already the more recent European Council statements are going cold on the freedom of movement of people aware of the political sensitivity of this matter at elections time.

Missing from the proposals are any suggestion that the successful PHARE and other pre-accession financial instruments which have benefited acceding countries so well be extended, along with the remit of the European Investment Bank (EIB) to lend, at preferential interest rates, to Ukraine as a replacement of the current limited TACIS approach which carries no private sector economic investment. The EIB already has a limited mandate to lend in Russia but this needs extending to Ukraine.

Although at the July 2002 European Union- Ukraine summit, no recognition was made of its long-term aspirations to accede to the EU, its recent bold but controversial policy of sending troops to help the allies in Iraq is making new friends in the west and with the enlargement debate to the forefront Ukraine has acquired renewed interest and friends in the Brussels Institutions particularly the European Parliament.

We are witnessing an historic process with enlargement but it is now time to open the debate as to where Europe ends and how we can build good and lasting relations with our new neighbours once the final border of the EU is settled.