Russia should gain from Ukraine’s EU association

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

After Ukraine and the EU sign the  Association Agreement and Free Trade Area, Russia will have to look for a new framework of relations not only with Ukraine, but also with the EU, writes Anton Podlutskyi.

Anton Podlutskyi is Vice-president of the Association of Journalistic Research.

“Less than two months ahead of the Eastern Partnership Summit hardly anyone can question the aspiration of the EU and Ukraine to make it successful. Ukraine expects that the signing of the Association Agreement and Free Trade Area are will first of all have a positive effect for its economy. And EU's readiness to take this step indicates that the process is mutually advantageous.

After obtaining the associate status in the EU, Ukraine can become an example for the countries which due to historical reasons find themselves in the orbit of Russia's economic interests, and thereby open new opportunities for them. Although transformation of Ukraine's economy is difficult, it is inevitable, but this irritates a Russia which is stuck in the past and doesn't accept any competition. 

The mechanism of Ukraine's integration into the EU has been launched. Attempts of Russia to return the situation only confirm the correctness of the civilisational choice of Ukraine. In its typical manner, Russia sees this choice as a threat to its national interests. The complex of measures for counteracting Ukraine's EU integration aspirations, undertaken by the Russian management, was expected and part of a tradition. Once again we observe trade wars and the absence of understanding that it's already time for Russia to change something in building relations with Ukraine. Thus, we should understand that the interests of Russian business in Ukraine don't always coincide with interests of the Russian leadership.

On top of that, after signing the Association Ukrainian assets of the Russian business will immediately grow in price. Thus, the capitalization of mother companies in Russia will also grow. At this point we can even speak about a specific form of Russian interest in the European choice of Ukraine. And some Russian companies have already managed to declare their readiness to invest into the modernization of Ukraine's energy complex enterprises. The anticipation of the inevitability of Ukraine's EU integration choice promises quite good dividends in future. Which means that not everything is that bad in Ukraine's economy. It is possible to earn by investing here.

Life doesn't end after the Summit. Undisguised trade blackmailing of the Eastern Partnership member states has revealed the existence of social and economic problems in Russia itself. However Russian leaders won't succeed to shift part of responsibility for their inner economic errors on Ukraine any longer. Especially having in mind that Ukraine is constantly showing its readiness to develop trade and economic cooperation with Russia after signing the Agreement with the EU as well.

The framework of cooperation within Russian integration associations offered by Ukraine has also been well-known for a long time. Ukraine has reiterated its readiness to join dozens of provisions of the Customs Union which don't contradict the Association Agreement with the EU. But this time Russia has been overestimated its power of influencing the domestic and foreign policy of the Ukrainian leadership. Laying emphasis on pumping money out of Ukraine's economy, Russia has miscalculated, having offered nothing new in relations with Ukraine over the past years. After Ukraine signs the Agreement, Russia will have to look for a new framework of relations not only with Ukraine, but also with the EU.

Positive dynamics of Ukraine-EU relations doesn't mean someone's political winning or losing. Economic pragmatism of trade and economic relations comes to the fore here. After the Summit Ukraine will still have to do lots of things to prove credibility of its intentions. And what's favorable for one party won't always be perceived the same way by the other one. However, the EU has always showed readiness to reach compromise solutions without detriment to the all-European values and in accordance with the civilized rules of business.

The issue of visa regime liberalization is especially important to Ukraine. Even keeping in mind the considerable sensitivity of the European countries in the approaches to migration issues, it is one of key priorities of the European integration course of Ukraine. The freedom of movement has to continue to attractively distinguish the EU from other interstate associations.

Ukraine aspires to develop partnership with many countries and international unions. This isn't a multi-vector approach, of which it is constantly accused. This is a desire to not only demonstrate, but also exercise economic pragmatism, and also diversify export markets. At present, Russia doesn't support such a framework. We have hope that the EU will become a backer of positive economic transformations in Ukraine's economy and will promote the introduction and realisation of European values in Ukraine in the long term. Thus, Ukraine isn't motivated by expectations of receiving financial assistance on the side of the EU, or facilitating its obtainment. Ukraine will still need to go through a difficult procedure of harmonisation of its legislation with European norms and rules.

Against the background of some EU countries who basically went bankrupt, Ukraine services its external loans regularly and timely. However, without the financial support of Europe and the renewal of a number of programs, it will be difficult for Ukraine to enhance reforms in economy, directed at modernisation of Ukrainian enterprises and rising of competitive capacity of its own production.

Negative forecasts have been made about the eventual crash of Ukraine's economy, but most of those estimations are of doubtful quality and origin. It would be hard to believe that the EU would intend to sign the Agreement with the country on the verge of default. And especially taking into account the experience of the EU in overcoming the consequences of crisis in certain countries of the eurozone. Advantages of Ukraine's economy are obvious.

The signing of the Agreement with the EU and the renewal of cooperation with financial organizations will positively affect international attractiveness of Ukraine's economy. The unique natural resources, the favourable geographical position and economic potential of Ukraine in conditions of the associate membership in the EU will strengthen its positions in the world ratings. Is there a better incentive for foreign investors?”

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