Understanding the Relationship between Ukraine and the EU

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Understanding the Relationship between Ukraine and the EU

A brief history about Ukraine
Ukraine is located in Eastern Europe and has an estimated population of over 42 million people making it the second-largest country after Russia. Its largest city and capital is Kyiv (Kiev). During the 13th century, the country was fragmented and claimed by different powers with its territory eventually being split between Poland and Russia. However, following the Russian revolution, the country stepped up their demands for local autonomy which led to the international recognition of the Ukrainian People’s Republic on 23 June 1917. Ukraine gained its independence in 1991 after the dissolution of the Soviet Union which it had merged with after WWII. Although the country’s economy has been hit severely with inflation and a drop in its GDP due to a decline in exports it has grown significantly over the years. Like any major European economy, Ukraine is characterised by rich farmlands, a good education system, a highly skilled labour force and a well-developed industry. 
 
A brief history about the EU
The European Union (EU) is a group of countries that work cohesively together as one economic and political unit. It was established out of a need to form a single political unit and end the years of warfare among many European countries. In 1993 the European Union replaced the European Community and a Single market was established to ensure the four freedoms which are the movement of people, money, goods and services. Now the EU has about 27 members, a directly elected parliament and the Euro as its base currency (for countries that meet the criteria).
 
Terms of association between Ukraine and the EU
The EU works with its eastern (Ukraine) and southern neighbours to promote stability, peace and economic prosperity in the region as a whole. Furthermore, the EU also supports economic and political reforms in Europe’s neighbouring countries through the European Neighbourhood Policy. The relationship between the EU and Ukraine is supported by the Ukraine-European Union Association Agreement and the Deep and Comprehensive Free Trade Area (DCFTA).
 
The Association Agreement solidifies trade and investment between the EU and Ukraine and provides a blueprint for Ukraine’s reform path. The agreement was signed by the newly elected president Petro Poroshenko on 21 June 2014 but only came into full effect on 1 September 2017. It also promotes the commitment to the rule of law, clear governance, human rights, basic freedoms and common values of democracy. The DCFTA focuses on the economic part of the EU Association Agreement. It offers a layout for developing Ukraine’s trade relations and its economy. It allows Ukraine access to selected sectors in the European Single Market and also grants EU investors similar regulated access to the same sectors in the associated country.
 
The EU has become Ukraine’s biggest trading partner and its largest donor and foreign investor. Ukraine is a top partner within the Eastern Partnership and the EU is seeking an increasingly close relationship with Ukraine. This relationship will grow past co-operation towards economic integration and deeper political alliance. However, not everyone is for the pro-EU Euromaidan movement which saw the resignation of President Viktor Yanukovych and his government after suspending the signing of the Association Agreement.  Pro-Russian and anti-government groups have demonstrated in major cities across the eastern and southern regions of Ukraine causing ongoing conflict since 2014.
 
Ukraine support from the EU
Ukraine has strived towards integration into the EU while the eastern part of the country has however been involved in pro-Russian unrest. The European Union has taken several steps to support Ukraine by providing economic, financial and political support. Despite the background conflict in its eastern regions and its difficult economic situation, the EU has managed to:
 
Offer financial assistance. In 2014 the EU deployed a huge support programme for Ukraine committing 11 billion Euros over the next 7 years. The country has also received micro-financial assistance since 2014 of loans worth about 1 billion Euros in 2014, 2015 and 2018.
 
Add Flexible Trade measures. Ukraine has been granted trading preferences by the EU through initiating autonomous trade measures and removing customs duties.
 
Set regulations in response to a crisis. The EU has progressively placed several restrictive measures in response to illegal territory invasion and deliberate disruption and destabilisation of Ukraine.
 
Introduce a CSDP mission. The Common Security and Defence Policy (CSDP) allows the Union to take the leading role in conflict resolution and peacekeeping. The CSDP mission is to help Ukraine reform and transform its civilian security sector and thereby strengthening international security.
 
Why is the EU interested in Ukraine?
The answer to that question is rarely about the country itself but primarily about EU enlargement or Russia. Ukraine is important to the entire EU as a whole in terms of security, political stability and energy-related issues.
 
Politics and security
Instability and public discontent in Ukraine has a negative effect on the EU. This also increase immigrants from Ukraine. Associations of agreements with other EaP countries were modelled on the EU accord with Ukraine. This means a democratic decline will cast a long shadow over the Eastern partnership which undermines the value of the whole region.
 
Trade and economics
Ukraine has the second-largest joint border with the EU and accounts for 0.9% of important imports from non-EU countries. The country also offers a market of over 44 million consumers and 70% of its land is made up of the most fertile soil in Europe. The possibility for greater trade and economic prosperity between Ukraine and the EU is high but Ukraine will have to significantly improve its poor business environment.
 
Energy supply
Ukraine is still the most important transit country for gas going to the EU from Russia. Twelve EU member states receive gas through this transit system even though it is poorly maintained. Ukraine is also one of the biggest producers of electricity in Europe and supplies this energy to four EU member states. Ukraine offers the EU energy resources it needs including natural and shale gas it is also developing.
 
Russia
The EU seems to be ever competing with Russia for influence over Ukraine. The poorly governed Ukraine is more vulnerable to Moscow’s pressure and most likely to be absorbed into the Eurasian Customs Union. This does not pose a security risk to the EU but will negatively affect trade and other relations with Ukraine.
The relationship between Ukraine and the European Union seems mutually beneficial and for the greater good of both parties involved but will require a lot of work. As it is Ukraine requires more financial and political assistance but the EU will benefit a lot more from the trade and security realised from building a strong Ukraine and alliance.

 

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