Ukraine government split over EU ‘democracy grants’

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This article is part of our special report EU-Ukraine Relations.

As the European Union prepares to disburse additional grants to Kyiv under its new 'Endowment for Democracy' initiative, several key personalities in the ruling Party of the Regions have voiced hostility toward foreign aid, saying it "provokes unrest" and "weakens" the country.

NGOs in Ukraine have voiced concern over plans to introduce legislation banning foreign grants for civil society organisations.

A number of key personalities in the ruling Party of the Regions have recently denounced what they call "grant-eaters" – or NGOs which they accuse of using foreign funds for purposes which "do not correspond to the state's policies".

Toppling the regime?

Alexander Efremov, leader of the parliamentary group for the Party of the Regions, said that an "external investor" was planning to finance projects aimed at triggering a "North Africa scenario" in Ukraine.

"Today the world is strongly governed by information and thanks to the Internet any information can be blown up beyond all proportion. I happen to possess data that [US financier and philanthropist George] Soros has put aside funds to prepare [for] certain groups of Ukrainian youth [to] stage any scenarios they may have. This is what is being prepared for us," he is quoted as saying by independent newpaper Zerkalo Nedeli.

Ukraine's Interior Minister Anatoliy Mogilev appears to share the same view.

"We have a number of gentlemen, specialised in absorbing foreign grants, who stage such developments because a strong Ukraine is not needed by anyone abroad," he said during a ceremony commemorating the Soviet Union's victory over Nazi Germany.

This line of thought was confirmed by the minister of education, youth and sports, Dmitry Tabachnik, who was quoted as saying on the occasion of student protests: "Those who provoke are those who pay – the foreign funds".

The Ukrainian ruling elite also appears to be turning against the press. Elena Bondarenko, an MP from the ruling Party of the Regions, lashed out against what she described as "Soros-like" providers of grants to journalism schools. "To train journalists on foreign money amounts to allowing a foreign army to set foot into your own country," she said.

Is aid ineffective?

It remains to be seen whether the government in Kyiv would be ready to go as far as banning foreign aid.

For one, Ukrainian president and leader of the Party of Regions, Viktor Yanukovich, has stated openly that his country wants to be part of the European Union. Refusing European democracy grants which could pave the way for future EU membership would run contrary to that aim.

In fact, the EU is planning an even more ambitious effort to aid Ukrainian civil society under a new programme called 'the European Endowment for Democracy', which will seek to support political parties, non-registered NGOs, trade unions and other social partners (see 'Background'). An 'Eastern Partnership' summit to be held in Warsaw on 29-30 September is expected to disclose details of the new EU initiative.

According to the Ukrainian media, the country is benefiting from several Western programmes, the biggest donors being the European Union and the US government, but also the governments of the UK, the Netherlands, Germany, Sweden, Canada, Switzerland and Japan.

Since 1991 the EU has provided a total of €2.5 billion in support for Ukraine, and the amounts keep increasing, with annual financing growing from €47 million in 2002 to €116 million in 2009. The EU programme for 2011-2013 has a budget of €470 million for three years, mainly to bring the EU-Ukraine Association Agreement into force.

However, the use of European taxpayers' money to fund programmes in Ukraine is controversial. In the Ukrainian expert community it is commonly believed that these numerous European support programmes in reality do not support the transformation processes that they are supposed to promote. This could substantiate to some extent accusations of "grant-eating".

Who is ineffective?

But data also show that Ukraine state institutions are in fact a bigger recipient of foreign aid than civil society and NGOs. Since the fall of the Soviet Union, a number of programmes have been put in place to assist judicial reform, equip courts with the latest technology and improve the transparency and efficiency of the Ukrainian state machinery.

According to Zerkalo Nedeli, an independent newspaper, if the government wants to criticise the "grant-eaters", it might as well criticise the state authorities too, which have eaten up millions in aid with little improvement to the judicial system. In spite of the investments, the newspaper says the judiciary remains corrupt, the prosecution is still opaque and lacks any kind of democratic control, the criminal procedure codes remain antiquated and the institution of the ombudsman is still as idle as ever.

On the contrary, the newspaper insists that foreign initiatives have played an important role in standing up for human rights and acted as a catalyst for state reforms, erecting new safeguards against potential state abuses.

Georgi Gotev

'People First', a Ukrainian civil society group which tries to help build democracy in Ukraine, sent EURACTIV the following comment:

"As far as European Union assistance is concerned, the root of the problem is in the errancy of approaches and instruments of providing support. As is generally known, the candidate states for accession to the EU received support which in the first place was aimed at improving the state institutions. Herewith a formula 'further financing in exchange for achieving specific results' was applied. In Ukraine this principle was often disregarded.

"Only application of a similar approach in Ukraine to the one used with respect to EU candidate countries will provide a chance for the efforts of the European community, which stimulates Ukraine on its path to joining the European Union, not to be spent in vain."


Elena Rybak of the European-Ukrainian Energy Agency said that "the balance between 'giving for free', thus spoiling with free money, and 'providing support' to the project implementation has to be carefully identified."

She warned that this was important to a project's lasting impact, often however "as soon as a donor leaves, and the grant component is not there any more, there is absolutely no willingness to repeat another excellent example for a different local community."

"Each and every project supported by donor or technical assistance has to carry a sustainable mechanism left in place, that will function independently of whether there is a grant or not," she added.

On 25 May, the European Commission unveiled a fresh 'Neighbourhood Policy', proposing to revamp the EU's relations with countries on its Eastern and Southern borders.

The 20-page document, entitled 'A New Response to a Changing Neighbourhood', largely reflects ideas developed by Commissioner Štefan Füle in a wide-ranging interview with EURACTIV last April.

On the financial side, the Commission explained that in spite of the economic crisis, additional funding of €1.24 billion would be transferred from existing resources and made available to support neighbourhood policy, on top of the €5.7 billion already allocated for 2011-2013.

The strategy's main novelty is the closer contact it proposes to establish with non-governmental organisations, in an effort to build partnerships with civil society. Concretely, the EU states its readiness to make EU support more accessible to representative groups via a dedicated Civil Society Facility.

In addition, the paper suggests creating a "European Endowment for Democracy" to support political parties, non-registered NGOs, trade unions and other social partners. The name appears to emulate the National Endowment for Democracy, a non-profit organisation financed by the US Congress which helped civil societies in Europe's East before and after the fall of the Berlin Wall.

The EU also wants to promote media freedom by supporting unhindered access to the Internet for civil society groups and the use of electronic communications technologies.

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