This article is part of our special report EU-Ukraine Relations.
To illustrate the changes in Ukraine under its new leadership, the country's foreign minister, Kostyantyn Gryshchenko, referred to three bridges in Kyiv, the construction of which had been stagnating for the past five years. Now people can see that they are actually being built, he told EURACTIV in an exclusive interview.
Kostyantyn Gryshchenko is a career diplomat. He has served as his country’s ambassador to Belgium and head of mission to NATO. He was also chief negotiator in border delimitation talks with Russia, Belarus and Moldova, as well as in Ukraine-Russia talks on the division of the Black Sea Fleet.
He was speaking to EurAcitv Senior Editor Georgi Gotev and EURACTIV Founder and Publisher Christophe Leclercq.
Mr Minister: Welcome to Brussels and welcome to EURACTIV. So, was there no need for a Nobel prize boycott by Ukraine, as your country sent a lower-ranked diplomat to the award ceremony in the end?
There was no question about having Ukraine represented at this particular event. The simple fact of the matter is that the ambassador was supposed to be in Kiev at that time, so we sent a chargé d'affaires who is essentially his deputy, which is normal practice. I don't think this issue ever merited any real attention as such. Anyway, it was done in a manner that fully reflects professional – European or whatever – diplomatic traditions.
Does this mean that Ukraine will align its foreign policy with the EU's?
It means that Ukraine is a civilised and very well-behaved country.
You have just met EU High Representative Catherine Ashton, together with other ministers from the Eastern Partnership. What did you discuss?
We discussed so many issues that it would be difficult to even numerate them. Essentially, it was on how to make the Eastern Partnership more efficient and more tuned to the needs of the partner countries, so that it can be an efficient tool in moving along with reforms needed in these countries, bringing their standards closer to those of EU member states and bringing more visibility of the Eastern Partnership to EU citizens.
One of our proposals was to use the Eastern Partnership summit as a benchmark for establishing joint border control between Ukraine and EU member states at our western borders before 2012, when millions of fans will be travelling back and forth between our borders [for the European football Championships, jointly hosted by Poland and Ukraine].
We want to facilitate this and demonstrate that this joint control can be both an efficient gateway where unwanted people with criminal behaviour or potential migrant or terrorist risks could be stopped, whilst at the same time saving more time and making it more comfortable. This is something that people on both sides of the border would appreciate and [then they would] understand on their own personal level what the Eastern Partnership brings to ordinary people.
This is simply an example. There are many areas where the Eastern Partnership can be used as an instrument to develop infrastructure projects in energy, transportation I believe, in a human dimension and others.
The visa issue is a very big priority for you. But does your country have a clear roadmap for how the objective of removing visas can be achieved?
We do. We agreed on an action plan at the EU-Ukraine summit on 22 November. We have this particular action plan, which mostly includes the steps Ukraine has to take – not so much benchmarks but the ratification of international conventions and technical missions related to biometric passports and other things that need protection of personal data.
All that ensures that the personal data of those travelling are protected, and that the process of control at borders is comfortable and speedy. We have a good understanding of the task and we will achieve it in a rather timely manner. Then we also need to have an internal EU process of assessing what we have already achieved – and the ability of both the Commission and governments to accept it, as we believe they should, as Ukraine is not a liability to the EU – it is an asset.
When the EU is shrinking in its relative weight worldwide, Ukraine provides additional resources – first and foremost human resources to compete in the current global competitive environment. That is being understood more and more in many capitals and here in Brussels as well. I would say that we have a much better atmosphere for discussing whatever matters today with the EU.
It seems that those considerations are also shared by Moscow. When we met three weeks ago I put a question to you regarding a pan-European market and you said that such a bold idea could be interesting. Since then, Russian Prime Minister Vladimir Putin has published an article on the subject in the Süddeutsche Zeitung. Russia wants to join such an economic community and Ukraine is between the EU and Russia: how would you comment?
We are clearly interested in having as free a market as possible to our eastern and western borders if possible. We are engaged in negotiations for deep and comprehensive free trade with the EU and at the same time we do discuss very important matters, establishing the rules that would protect our European ambitions and still allow us to work and trade freely with Russia, Kazakhstan and Belarus, who are forming their customs union. I believe that it would be in the best interests of all the parties in this triangle.
The rules that would be applied to a free-trade area would be based on WTO rules first and foremost. Then, essentially, we do not see major hurdles, especially if Russia will also include energy in the process, because if this free trade is only limited to a certain number of goods and services, then it would be extremely difficult to agree on a balanced package.
So we are optimistic, we are ready to be supportive and proactive in that process, but we need to understand that any negotiations on free trade are extremely technical at a certain moment. And they can be very sensitive, as they affect the basic interest of certain important sectors of every country.
So, as far as I understand, you agree that there is a need for a long-term vision in order to drive these negotiations.
Turkey is already member of a customs union with the EU, Ukraine is negotiating a free trade agreement and would welcome the fact that Russia would have a customs union with the EU as well. Will there be some coordination between Moscow, Kiev and Ankara?
We are now only starting, but we are interested in having very intense rounds of negotiations on free trade with Turkey. Obviously we have to coordinate, including internally, so that rules would be applied in a manner that would be transparent, which serve our interest of economic development and would be balanced from the point of view of what is, in general, an incentive for the overall economic development of the country. And that is not an easy part. We will first and foremost have to coordinate what we negotiate with each of these partners.
We have Mr. Valeri Piatnitskiy, who has been deputy minister for the economy for many years. I believe that many joke about him, saying that he keeps his cards close to his chest. So I believe he will be well protected. He coordinates everything at this particular level and can immediately tell you what the pros and cons of the deal would be and when and how to do it.
If he was not in favour of a pan-European market, he wouldn't be there. It is an idea that needs to be developed further, because the general idea of a free-trade area is agreed by everyone, but when it comes to practical negotiations, we see people saying 'yes, but not on these terms, we need others'.
Let us speak on practical terms precisely. At a recent round table, the Commission said it gave Ukraine the best terms -except for perhaps Switzerland- with 95% free trade. But Ukrainian representatives said they didn't want freedom to export mangoes or fish, which your country doesn't produce, but trucks and cars, for which you do not have access to the EU market.
Yes, we do not have freedom to compete in the services of transport. We are provided with free trade in our maritime sector, when we don't have many vessels anymore. It is a very professional, hard talk, not only about money but also about jobs and the practical, basic interests of hundreds of thousands of people.
In my opinion, whilst money is overall in your favour, if you lose too many jobs immediately, that could lead to social and political instability and the unhappiness of so many people, so the government cannot allow this to happen.
That's why we negotiate a balanced deal where the more difficult sectors that need to be reorganised or modernised will be allowed to take a certain amount of time for that. That is the whole idea. We have progressed and we are pretty satisfied with the progress. We also understand that many more 'give and take' talks are needed.
At the same round table we also heard Western businesses criticising Ukraine's business climate. At EURACTIV, we receive complaints from the Western business community complaining that their products are counterfeited in Ukraine. How would you comment on this?
For the first time since independence I would say, we have a government that is fully committed to changing not simply the overall business climate but the way the country sees itself – how it is being governed and how citizens' rights are protected in the system.
That's why the president announced the creation of a committee on reforms immediately after his appointment which has established a whole set of priorities, including changing licensing procedures. We have already reduced the number of licenses needed to have a start-up business and to continue with business. We have seen deregulation of up to 90% in many areas, especially in construction, where over-regulation had led to many risks of corruption.
It is also the whole process of making sure that no-one, irrespective of their position, is above the law – that's why we have many people in the current government who have been brought to justice. One good example is that one month after forming a new government, the deputy minister for the environment was arrested for a very clear case of bribery.
A couple of weeks later the minister who had brought him into government was rooted out of government by the opposition.
There are many examples, so it is not aimed at any specific political or societal group: it is an overall effort.
The third 'grand' area where reforms are very visible is in judicial reform. Lack of protection when seeking justice in court was one of the main reasons for the doubts the business community had in their ability to protect their rights.
We are not yet at an ideal stage, but this is changing rapidly. We have removed many of the basic conditions which were leading to cases of corruption.
When can we measure this progress?
Again, we only started a few months ago but I think it is already visible because many people see it. In Kiev, we have three bridges which had been 'under construction' for the past five years. People walk or ride to their offices everyday and suddenly six months ago they see the bridges actually starting to be built. And this is a huge river, unlike those in Belgium, it is hard to cross them – so people do appreciate that something is being done.
When we have very visible changes in Kiev, people do understand that there is an effort that brings something better to their everyday lives.
On a city and local level, you first and foremost need people in governing positions who actually know what citizens need. And I believe that many people have been voted in who meet this standard.
How about administrative reform?
On Friday [10 December] we had an announcement on administrative reform. So it's a rather substantial reduction of the number of ministries, a very logical accumulation of functions in clusters and not simply personnel matters, but how you administer very important reforms that need to be moved through parliament and into society. But the ability to make very strong moves is something that this government really has as its major asset.
We are also on the verge of introducing pension reform – for which there is a dire need – putting a cap on pensions that were impossible to explain socially, especially in the public sector.
It is the new tax code that created major upheaval, as 2-4 million people were not paying taxes but were involved in business.
They wanted to stay on this fixed tax of 200 Hryvnias ($30 or €22). It simply shows that, in a very short period of time, serious, important and difficult reforms are being introduced in a very well thought through manner. It is not easy from a political of view, but we believe that before the next elections we will have shown society that we have done exactly what was needed.