Archive for November, 2010


OSCE Summit 1/2 December

November 30, 2010

Well dear readers, the next interesting multinational summit Ukraine will take part in happens on 1/2 December in Kazakhstan……..Astana to be geographically precise.

Important in several ways, firstly it has been some time since it held a summit, secondly OSCE is becoming much more of a recognised global voice and forum and lastly, Ukraine take on the Presidency in 2013.

The event attendees is also comprises of a fairly noteable crowd……

Twenty-eight heads of state have confirmed their participation in the summit – 27 presidents and the presidium chairman of Bosnia and Herzegovina, – the vice president of Switzerland, 10 heads of government, including the prime ministers of Belgium, Greece, Italy, Liechtenstein, the Netherlands, France, Estonia, the federal chancellor of the Federal Republic of Germany, the secretary of state (prime minister) of the Vatican, and the minister of state (prime minister) of Monaco.

In addition, seven deputy prime ministers have confirmed they will attend the summit. They will represent Britain, Denmark, Spain, Luxembourg, Malta, the Czech Republic and Israel, which is a partner of the organization.

The delegates will also include the U.S. secretary of state and the foreign ministers of Australia, Algeria, Andorra, Egypt, Jordan, Canada, Norway, Poland, Portugal, San Marino, Thailand, Uzbekistan, Sweden and South Korea.

Deputy foreign ministers will represent Morocco, Tunisia and Japan.

Ireland and Iceland will be represented by ambassadors.

Thirty-three international organizations will also be represented.

Among others, those present will include the European Union president, the secretaries-general of the United Nations, the Organization of the Islamic Conference, the Shanghai Cooperation Organization, the Collective Security Treaty Organization, the Economic Cooperation Organization, the Eurasian Economic Community (EurAsEC), the executive director of the Conference on Interaction and Confidence Building Measures in Asia (CICA), the president of the European Bank for Reconstruction and Development, a deputy executive secretary of the Commonwealth of Independent States, and an aide to the NATO secretary-general.

About 2,500 delegates, 1,200 reporters and 600 representatives of nongovernmental organizations were registered as participants.


November 29, 2010

Well dear readers, so far it seems Ukraine is unscathed by the Wikileaks releases.

The only mention thus far is of this lady:

Well, Galyna Kolotnytska, this is your 15 minutes of international fame…….enjoy!

 Tomorrow on to more interesting matters…..I hope.


The difficulties of trade talks……why do they take so long?

November 27, 2010

Well dear readers, there has been some noticeable frustrations amongst some certain members of the press, the expatriate community, the international and Ukrainian business community over the speed of the Deep and Comprehensive Free Trade Agreement currently being worked upon by the EU and Ukrainian negotiating teams.

Here is a set of negotiations which is in its 10th year relating to the EU and Africa…..

After 10 years of negotiations, it seems the continent of Africa is about to walk away from the negotiating table with the EU as it seems despite political rhetoric and despite the interests and needs of both sides being clear in the reaching of an agreement, the positions from where both sides started the negotiations 10 years ago have barely moved.

The African continent faces many of the same issues as Ukraine, in that the customs tariffs, just as with Ukraine, are a major issue and as the African continent rightly points out, customs tariffs have been used by the EU nations historically to protect their own industries and grow them, therefore removing them has the very real chance of destorying developing domestic industrialisation.

That maybe less true of Ukraine, but then maybe not, considering the industrialisation in Ukraine still exists as the Soviet industrial units and therefore are in urgent need of investment for reasons of environmental, ecological, health and safety and economic output.  That does not take into account the soviet system of aircraft engines being built in Ukraine SSR but the bodies build in Russia SSR etc etc.  A system designed to insure one nation within the USSR depended on the other.  20 years on, the same situation still exists across many industries in Ukraine and Russia.

It is fair to say that the industrialisation of Ukraine still has some way to go to meet its potential.

This though is but one area where the removal of tariffs will hurt Ukraine when its producers come up against the modern, efficient, ecologically, enviromentally and economically advanced German industrial machine and all those protective tariffs are removed authomatically giving German goods a 20% market price reduction over current domestic pricing and obviously having an adverse effect on domestic producers.

How will Ukraine fair when the tariffs are removed in agriculture when it is faced with the Common Agricultural Policy (CAP) of the EU?  How will Ukraine cope with the agri SPS standards which even Poland, if not compensated by the EU, would never be able to apply fully due to the costs.

Is the answer in specific products being identified in the short term whilst over the long term the aim is towards a full and financed SPS standard?  Is that not just a simplified FTA that delays anything that could be called a comprehensive DFTA?

How will Ukrainian coal mines cope against the recently extended EU subsidies for coal?

Ukrainian metals, coal, ore?  The end of GOST and the implimentation of EU grading systems?  Some form of automatic bilateral recognition of accepted standards is required to end the delays with customs inspections.

What about the telecoms sector?  Ukraine taking up the EU 2002 regulatory model would be a disaster as it removes most national regulators.  This means Ukraine at best would have to adopt the previous 1998 regulatory EU system that left them in place, thus not exactly mirroring the EU.

What about the financial sector?  EU bank owned subsidiaries in Ukraine will work to Basle II regulation, do Ukrainian banks work to the Basle system at all?  If not then they will have to at least move to Basle I or there is no ability for transparent actions within the EU and Ukraine financially.

In the arena of energy, Ukraine has already applied to join and agreed to abide by the Energy Community in Europe, however there remains a lot of work to do to make nefarious entities like Naftogaz transparent before we even mention the area of the Kyoto Protocal and dodgy dealing in the carbon credits area Kyiv indulges in.

These are just a few points in an incredibly complex area that is free trade negotiations that could possibly have harsh reprocussions in Ukraine for the short and medium term if not negotiated carefully.

If the result is flawed, we are not talking about Ukraine going back to Russia to bilaterally renegotiate the price of gas, we are talking about Ukraine going back the the EU and trying to change something that will require the consesnus of all 27 member states.  That is likely to be an exceptionally slow and painful process if any agreement can be made to change any signed of DFTA at all.

The issue becomes extremely complex because the needs of both Africa and Ukraine in the negotiations with the EU will change over any transitional period in which the market place adjusts.  It is not like signing a deal with a mature and developed nation or continent.  Both the African continent and Ukraine are still emerging and thus need some form of flexibility from the EU, but flexibility is difficult to have in a comprehensive Deep Free Trade Agreement, even if sliding timescales are included to reach position X by a certain date.  The force majoure that was the financial crisis shows that such things can really screw up the diarised timetable of events……for a very, very long time.

All of this takes us back to the basics of any negotiation and that is the opening positions of either side, the shared interests of both sides and the needs of both sides.

It is certainly in the interest of both sides to agree a deal if a satisfactory one can be reached.  It is the position of both sides that a DFTA is in the long term benefit of both sides……particularly for Ukraine who should see a massive long term gain…..if the short term needs for transition can be mitigated and not devistate what is already here.

To take a holistic approach to this is of course necessary as it should all be negotiated at once for reasons of timeliness, however it is the specifics that will take a great deal of negotiation and agreement.  They should not be rushed to the detriment of Ukraine…..not that I would advocate a 10 year negotiation as in the EU/Africa case which is apparently going nowhere.

As we are already seeing in the RADA, an aweful lot of laws are being passed at record speed in efforts to reach some for of EU compatibility across many areas, but the quality of these laws are occasionally being sacrificed for speed.

More haste and less speed is the order of the day and a quality legislative legacy which allows for the DFTA needs to exist in equal quality to the on-going negotiations and any subsequent agreement.

Those chomping at the bit and bemoaning the speed of this process are quite likely to suffer severelyin the short and medium term if a rushed deal is negotiated by Ukraine.


From irksome to interesting – Ukrainian foreign policy

November 26, 2010

Well dear readers, whilst sat sucking a Strepsil……oh yes, that steadfast foundation of British sore throat remedies is indeed easily found in Ukraine, and watching yet another day of tax demonstrations of the television in Kyiv, an issue far from being resolved regardless of the protests, as I fully anticipate the President to send it back to the parliament with “recommendations” anyway.  My thoughts drifted towards how remarkabely peaceful the protests generally are in Kyiv as opposed to recent events in France and the UK which have been much more violent over far less major reform and changes.

This led my currently rather fogged mind onto Ukrainian policy and to recent foreign policy with regards to Ukraine, as the tax protests have drowned out the rather more favourable news of the EU/Ukrainian summit.

I think it is reasonably fair to say that under the last administration Ukraine was seen as “irksome” by most nations and specifically by the EU and NATO, who saw no rush to engage Ukraine as the leaders squabbled endlessly whilst trying to push NATO membership against the country’s will and push EU idealism without any real effort to make any legislative changes to back up the words.

At a time of financial crisis and over expansion, this was a marvellous scenario for the EU and NATO in some ways, although somewhat irksome to continue to hear nothing but well meaning rhetoric from the then leaders of Ukraine.  Nonetheless that well meaning rhetoric and instability meant no rush to engage Ukraine other than when the gas was turned off due exceptionally poor relations and exceptionally poor negotiations with Russia…….rather bizarrely at a time the EU and certainly “Old Europe” was warming to Russia.

All now history of course.

Then enter Yanukovych, a rather swift installation of linear power, a very swift declaration that Ukraine was kicking NATO membership into the very long grass (which to be fair was an election platform), the extention of the Russian Black Sea Fleet lease in Crimea and a rapid warming of relations with Moscow……although not as warm as Russia may have thought it would be…….but certainly warm enough to make them happy.

This of course is a position also welcomed by the “Old Europe” EU members who had been warming ties with Russia anyway and also a number of Polish politicians whose nation is rapidly becoming a very influential voice within the EU.   The Weimar Triangle’s interaction with Russia plus Ukrainian long historical ties with both Poland and Russia is a good position for Ukraine to sit within geographically, politically and economically, if a non-aligned state can be maintained……and very quickly came the announcement of Ukraine remaining non-aligned but rather more pragmatic with its relations with all concerned.

There is of course an inherent risk, certainly militarily, to being non-aligend when sat between NATO and Russia geographically but there is the life-line thrown out by all nations, Russia. 

Russia decides to float the idea (general and non-specific as it was) of the European security in a collective way including Russia, something which Ukraine quite rightly sees as a possible safety net holding non-aligned status.  Whether the idea will ever become more than an idea remains to be seen, but, as can be seen by NATO’s warming to Russia and Russian participation in many things NATO , it is not necessarily an impossible concept.

It has also made it very easy for Ukraine to play war games with both NATO and the CIS nations without suspicion from either side.  More to the point however, war games aside, it puts Ukraine in a position to actively participate in the security issues of both the EU and Russia with equal importants when it comes to terrorism, smuggling, drugs, asylm energy and financial security.

What will be very interesting to watch is how China and Ukraine will interact, as whilst the diaspora bemoan the warmer ties between Russia and Ukraine as Ukraine’s surrender of soveriengty, watch closely at where Chinese investment in Ukraine is placed.  My money is on coal mines, metal producers, ore mines, oil and gas exploration (or financing thereof) space cooperation and R&D over the next 5 – 10 years in a fairly significant way.

However, the affect of the current administration’s foreign policy moves has garnered a much more active and noticeable EU interest than the previous administration ever managed.  There can be no denying a much more interested and engaged EU with Ukraine and likewise Russia.

So that is it then?

Not by a long shot.  Ukrainian relations with Turkey, with whom it already does a reasonable amount of bi-lateral trade, are likely to warm as the EU deals with numerous internal issues that are rocking it to the core.  Ukraine needs a relationship with another important regional player as a backup to the possibility of EU implosion.

Who better than the obviously hugely important nation of Turkey, who just so happen to also be a NATO member.  Turkey is strategically important not just for Ukraine but also for Russia, the EU, and NATO, so it pays to be on good terms.

Good relations with Turkey also open up relations with the Islamic nations of the Middle East and North Africa.  Nations such as Libya, a nation that has consistantly expressed economic interest in Ukraine.  This is over and above the Muslim connection through the Tartars of Crimea and the historical links between the USSR and the Asian continent.

In short, and it seems this is a currently active contingency plan by Ukraine, trade and economic ties are being prepared for a scenario that does not overly involve “The West” should the EU implode.  Recent agreements between Egypt, Libya, Isreal, Turkey etc., all point this direction as the contigency plan for Ukrainian economic and trade growth and cooperation.

On top of all this, Ukraine as a founding member of the UN and despite requiring IMF help, paying its membership fees before most nations have got around to it has been  priority.  Ukraine is also to hold the Presidency of the Council of Europe in 2011 and has recently been unannimously voted as President of OSCE for 2013.

Is that it?

Well yes and no, but it is as far as I will go with this post, other than to say I did not overlook the 2012 football tournament and the possibilities it also presents Ukraine if it goes well……but being English, I am sure England will under-perform as normal, so I don’t want to draw too much attention to it……I know you understand.

Anyway, suffice to say, the rather tedious and irksome foreign policy I have associated with Ukraine for the last 6 years and more has suddenly become very interesting!


EU Resolution on Ukraine (Draft EUP Document)

November 25, 2010

Well dear readers, here is the link to the EU Parliament’s resolution on Ukraine

Here it is in full to save you clicking the link……..

European Parliament resolution on Ukraine    
The European Parliament,

–    having regard to its previous resolutions on Ukraine,

–   having regard to the Joint Statement adopted at the EU-Ukraine Summit held in Brussels on 22 November 2010,

– having regard to the Final Statement and Recommendations issued following the 15th meeting of the EU-Ukraine Parliamentary Cooperation Committee, which took place on 4-5 November 2010 in Kyiv and Odessa,

– having regard to the EU-Ukraine Parliamentary Cooperation Committee delegation which observed the local and regional elections held in Ukraine on 31 October 2010,

– having regard to the Partnership and Cooperation Agreement (PCA) between the European Union and Ukraine, which entered into force on 1 March 1998, and to the ongoing negotiations on the association agreement designed to replace the PCA,

– having regard to the 14th meeting of the EU-Ukraine Cooperation Council held in Luxembourg on 15 June 2010,

– having regard to the Joint Declaration on the Eastern Partnership launched in Prague on 7 May 2009,

– having regard to the Conclusions on the Eastern Partnership adopted by the Foreign Affairs Council on 25 October 2010,

– having regard to Resolution 1755 of the Parliamentary Assembly of the Council of Europe, adopted on 5 October 2010, on the functioning of democratic institutions in Ukraine,

–   having regard to the European Council conclusions on Ukraine of 16 September 2010,

– having regard to the EU-Ukraine Association Agenda, which replaces the Action Plan and was endorsed by the EU-Ukraine Cooperation Council in June 2009,

– having regard to the agreement between the European Community and Ukraine on visa facilitation, which was signed on 18 June 2007 and entered into force on 1 January 2008, and to the EU-Ukraine visa dialogue launched in October 2008,

– having regard to the Joint Report of the EU-Ukraine Parliamentary Cooperation Committee Working Group on Visa Policy Between the EU and Ukraine, of 4 November 2010,

– having regard to the last-minute changes to the Ukrainian electoral law passed by the Ukrainian Parliament (Verkhovna Rada) in June 2010, shortly before the local elections were held,

– having regard to the National Indicative Programme 2011-2013 for Ukraine,

– having regard to Rule 110(4) of its Rules of Procedure,

A.  whereas Ukraine is a European country of strategic importance to the EU; whereas its size, resources, population and geographical location give Ukraine a distinctive position in Europe and make it a key regional actor,

B.   whereas Ukraine’s newly-elected President Viktor Yanukovych, and the Verkhovna Rada, have confirmed Ukraine’s determination to join the European Union,

C.  whereas allegations have been made that democratic freedoms, such as freedom of assembly, freedom of expression and freedom of the media, have come under threat in recent months,

D.  whereas the Ukrainian Constitutional Court’s ruling of 1 October 2010 re-establishes a presidential system of governance; whereas the establishment of a democratic, effective and durable system of checks and balances should remain a priority and the process for achieving this should be open, inclusive and accessible to all political parties and actors in Ukraine,

E.   whereas local and regional elections took place in Ukraine on 31 October 2010 in a calm atmosphere and without incident; whereas criticism has been expressed about some aspects of the organisation of these elections, in particular with regard to the electoral law, the procedures for its adoption and some specific aspects of its substance,

F.   whereas following the presidential elections held in January 2010 there are increasingly worrying signs of the erosion of democracy and pluralism, as evidenced, in particular, by the treatment of some NGOs and individual complaints by journalists about pressure from their editors or the owners of their media outlets to cover or not cover certain events, as well as increased and politically motivated activity by the Ukrainian Security Service (SBU) and the misuse of administrative and judicial resources for political purposes,

G.  whereas on 13 October 2010 the OSCE Representative on Freedom of the Media stated that Ukraine has achieved a great level of media freedom, but that it must take urgent steps to safeguard it, and called on the Ukrainian Government to refrain from any attempt to influence or censor media content and to comply with its international media freedom standards and OSCE media freedom commitments,

H.  whereas the Eastern Partnership can offer Ukraine an additional means of integrating with the European Union, but can be successful only if it is based on practical and credible projects and is sufficiently funded,

1.   Emphasises that, pursuant to Article 49 of the Treaty on European Union, Ukraine may apply for membership of the EU like any European state that adheres to the principles of freedom, democracy, respect for human rights and fundamental freedoms and the rule of law;

2.   Stresses that Ukraine has a European perspective and strong historical, cultural and economic links to the European Union and that it is one of the Union’s key partners in its Eastern neighbourhood, exerting a significant influence on the security, stability and prosperity of the whole continent;

3.   Welcomes the consensus statements by the Ukrainian Government and political opposition on Ukraine’s aspirations with regard to its path towards European integration and its long-term ambition to become an EU Member State; notes that this aim continues to be supported by a consensus of all actors on the Ukrainian political stage; calls on the Ukrainian authorities to establish a common forum to coordinate Ukraine’s political position vis-à-vis the European Union, that forum to consist of politicians from both the ruling coalition and the opposition;

4.   Points out that the 31 October 2010 local and regional elections, although conducted technically in an orderly manner, did not set a new, positive standard; deplores the fact that Ukraine changed its electoral law a few months before holding local and regional elections, leaving too little time to improve the law and prepare to conduct elections in a sound, democratic manner;

5.   Deplores the fact that because registration requests from the opposition parties were not accepted by electoral commissions before the submission of the Party of Regions’ list, the ruling party in effect gained first place on the lists in approximately 85% of the constituencies; notes that owing to the anomalies in the electoral law, which failed to provide sufficient safeguards to protect the established political parties’ right to compete, some parties, such as Batkivshchyna, were unable to register their candidates in several districts and participate in the elections;

6.   Deplores the fact that election rules remain an ongoing subject of discussion; endorses the need to improve the electoral framework and is encouraged by the work done in cooperation with EU and OSCE experts in developing a draft new Electoral Code; notes that a draft for a Unified Electoral Code has now been tabled for adoption in the Verkhovna Rada; emphasises that the transparency of the electoral process is contingent on the clarity of the legal framework; calls on the Ukrainian authorities to ensure that the legislation is finalised in good time, well ahead of the parliamentary elections in 2012;

7.   Is concerned at recent developments that could undermine media freedom and pluralism; calls on the authorities to take all necessary measures to protect these essential aspects of a democratic society and to refrain from any attempt to control, directly or indirectly, the content of reporting in the national media; stresses the urgent need for a reform of the laws governing the media sector and therefore welcomes a recent proposal to introduce Public Service Broadcasting in Ukraine; also welcomes the public assurances given by the Ukrainian authorities that the legal framework needed to establish a public service broadcaster will be concluded by the end of the year; deplores the fact that two independent TV stations, TVi and TV5, have been deprived of some of their broadcasting frequencies; calls on the authorities to ensure that legal proceedings do not result in the selective revocation of broadcasting frequencies and to review any decision or appointment that could lead to a conflict of interest;

8.   Calls on the Ukrainian Government to bring the legislation on media freedom into line with OSCE standards; decisive action in this regard would strengthen Ukraine’s candidature for the OSCE Chairmanship-in-Office for 2013;

9.   Calls on the Ukrainian authorities thoroughly to investigate the disappearance of Vasyl Klymentyev, the editor-in-chief of a newspaper that focuses on corruption in the Kharkiv region;

10. Emphasises the need to strengthen the credibility, stability, independence and effectiveness of institutions, thereby guaranteeing democracy and the rule of law and promoting a consensual constitutional reform process based on the clear separation of powers and effective checks and balances between state institutions; stresses that cooperation with the European Commission for Democracy through Law (Venice Commission) is crucial to ensure that the legislative reform packages that are currently being developed are fully consistent with European standards and values; calls on all the relevant political stakeholders, including the government and opposition, to take part in this process, calls on the Ukrainian authorities to ask the Venice Commission for an opinion on the final versions of draft laws;

11. Calls on all the parties in the Verkhovna Rada to support and promote a system of effective            checks and balances in connection with the legitimate working of government;

12. Calls on the authorities fully to investigate all reports of infringements of rights and freedoms, to remedy any violations identified and to investigate the role of the SBU with regard to interference in the democratic process;

13. Highlights Ukraine’s pivotal role in the European Union’s energy security; emphasises the importance of stepping up cooperation between Ukraine and the EU in the field of energy; calls on Ukraine to implement its commitments arising out of the Joint Declaration of the EU-Ukraine International Investment Conference on the Modernisation of Ukraine’s Gas Transit System; calls for further agreements to be concluded between the EU and Ukraine aimed at securing energy supplies for both sides, including a reliable and diversified transit system for oil and gas; emphasises that if Ukraine is to have a modern gas transit system, it requires transparent, efficient and high-quality transit services through a modernised gas transportation network; calls on the Commission to provide the necessary technical assistance in order to improve radically the energy efficiency of Ukraine’s electricity grid and to step up cooperation as regards reform of the gas sector, in order to bring it into line with EU standards;

14. Is encouraged by the progress in the negotiations on the EU-Ukraine Association Agreement, in particular its deep and comprehensive Free Trade Area (DCFTA) aspects; notes that the conclusion of the negotiations on the agreement depend on the ability and willingness of the Ukrainian side to approximate its laws and regulations with those of the European Union; calls on the Commission to negotiate the DCFTA with Ukraine in such a way that its provisions not only open up EU and Ukrainian markets for mutual beneficial trade, but also support the modernisation of the Ukrainian economy; stresses that the DCFTA should make for Ukraine’s gradual integration into the EU internal market, including the extension of the four freedoms to the country; urges the Commission and Ukraine to make rapid progress in this field, on the basis of Ukraine’s achievements as a member of the WTO; urges both parties to do everything needed to achieve final agreement in the first half of next year;

15. Calls on the Ukrainian authorities to step up efforts to fight corruption; expects, in this regard, that positive political statements will be matched by decisive action in combating corruption at all levels, on the basis of political impartiality; calls for the establishment of a level playing field for business and for application of the same rules to domestic and foreign investors; in that connection, deplores the over-involvement of big business in political life;

16. Urges the Ukrainian Parliament to enact the draft law ‘on access to public information’ in keeping with European and international standards;

17. Welcomes the Action Plan towards visa liberalisation for Ukraine as agreed at the 14th EU-Ukraine Summit on 22 November 2010; considers the Action Plan to be a practical tool to drive forward essential reforms in the relevant areas; points out, in particular, that consolidation of the rule of law and respect for fundamental freedoms will be crucial in order to meet the benchmarks for visa liberalisation; calls on the Commission to assist the Ukrainian authorities in their efforts to advance towards visa liberalisation;

18. Urges the Member States to abolish fees for processing national and Schengen visa applications for Ukrainian citizens as an intermediate objective;

19. Asks the Commission to work with the Member States and Ukraine to prepare special measures to be taken in relation to the 2012 European Football Championship, with a view to facilitating travel by ticket-holders, and to use this special occasion as a testing period for a final visa-free regime;

20. Welcomes Ukraine’s active support for the Eastern Partnership and the Euronest Parliamentary Assembly; urges the Council and Commission to further step up cooperation with Ukraine in the context of developments in the neighbourhood area, in particular the development of policies for the Black Sea region;

21. Stresses the importance of stepping up cooperation on youth and student exchanges and the development of scholarship programmes which will enable Ukrainians to become acquainted with the European Union and its Member States; believes that the Erasmus higher-education exchange programme should be extended to students from the six Eastern Partnership countries;

22. Instructs its President to forward this resolution to the Council, the Commission, the governments of the Member States, the President, Government and Parliament of Ukraine and the Parliamentary Assemblies of the Council Europe and the OSCE.

As it is unlikely any of the wording will be changed, once my rather flu thickened head has cleared, I will comment on the document.



November 24, 2010

Suffering from a case of Man Flu dear readers, so as you will know, the world hates me, everything is wrong and I am about to die!

Yes ok, none of that is true…….other than the flu bit.

Nothing worth reading here today but if you are bored take a scan through the older posts.

I shall attempt to resume my normal waffle in time for what is likely to be a complete lambasting of the current Ukrainian leadership by the EU parliament tomorrow or the day after.


EU and Ukraine start the official process of removing Visa’s

November 23, 2010

Well dear readers, as expected, the EU has delivered to Ukraine an Action Plan clearly setting out the technical requirements to remove……in effect the Tourist Visa.

Across in another part of cyberspace, a debate continues amongst the Expats and immigrants (by immigrants I mean those of us Ukraine has kindly allowed permanent residency to) as to why this has been done considering some of the rather more negative feelings towards the current administration over human rights and press freedoms.

I seem to be in a minority amongst a very principled crowd, having argued it makes sound diplomatic and political sense to do what has been done.

Despite this Visa-free travel being of immemce importants to the Ukrainian public, it was not the lead news item yesterday.  Protests over the governments Tax Code were the lead on every channel.  Seems as though press freedoms cannot be that manipulated if an EU foreign success story for the current powers comes in second after protests about their proposed tax changes and not the other way around.

Anyway, returning to the issue, why is it a better policy for the EU to offer the concrete prize of Visa-free travel to Ukrainian citizens when it is also concerned over democracy, rule of law and media freedoms?

Several reasons come to mind. 

It is far easier to influence Ukraine if you have offered very publicly something the vast majority of the nation has been seeking.  It is an additional lever which can now be used, as no nation has ever been offered Visa-free travel with the EU to have it subsequently withdrawn.  Ukrainian leaders will not want to be the first.

To bang the same old drum as I often do, even when nothing is connected…….everything is connected.

This process begins immediately with regards to reaching the set technical requirements.  However part of the process is to insure that Ukraine will not allow asylum seekers through its territory and into the EU to claim asylum.

At present it is Poland and Romania that refuse entry to Chechens and others from Asia who would claim political asylum in the EU.  Of coure refused entry at the EU border means you do not enter the EU and therefore cannot claim asylum there also. 

This means Ukraine must now pay particular attention to all people coming through its borders in both directions, but also, when the Visa’s are eventually removed, the democratic situation, rule of law and individuals freedoms of Ukrainians are in such a condition that the EU can refuse asylum to any Ukrainian trying to make such a claim on the grounds that there is no systematic persecution from which they have a right to be protected.

Thus until there is confidence in the Ukrainian democratic, legal system and protection of individual rights, the EU can and probably will, stall Ukraine until it is reasonably happy with the internal workings of Ukraine.  (That said, Bosnia within the month has their Visa restrictions removed and the situation there is no better than Ukraine today).

It will also add a subtle lever to the negotiations of the DFTA and EEA process for the EU and will be used to encourage the Ukrainian side to be as active over the difficult negotiations as they have been over the easier ones.  That said the EU will need to be in a position to actively assist Ukraine when the DFTA and EEA agreements are finalised as there is every chance Ukraine will suffer in the short term until the markets adjust.

EU assistance in what could well be similar effects to Poland and the transitional period of the Balcerowicz Plan will be essential as the alternative would be similar to Russia 1990 – 1995.

However the EEA and the DFTA are quite important for the EU.  Current customs tarrifs of 20% on EU goods, that would be albut removed under the DFTA, open up 46 million potential consumers with an immediate commodity price reduction of 20%……when economic growth is a desired goal for the block.

Likewise with free travel and no tarrifs, Ukrainian business will slowly creep westwards in a more solid manner reaching more and more customers.

This in turn means many Ukrainian laws must be amended/abolished/re-written to reach EU norms and at present the amount of laws gong through the RADA makes it a very busy place (even if speed is sometimes taking priority over quality).

All of this eventually leads to a situation where the EEA needs little work at all as it is more of a political than economic association based on the same principles (and underpinned by the DFTA and massive Ukrainian change of laws to facilitate this).

So, it seems to me, and I know I can be a little thick at times, the official granting of the Visa-free Action Plan now, despite the perception of the country others may have, will prove to be  a very useful lever in the future and rather critical talks over the next 12 months.

There is now a very public carrot which will benefit every Ukrainian citizen, which to be fair the current government has every right to trumpet, which has many hidden sticks associated with it.

It seems a reasonable policy to me…….although I blogged here well over a year ago that this had to happen if the EU wanted to influence Ukraine in a way every citizen would care about.


Tax Protests

November 22, 2010

Well dear readers, today, as the President is not in Kyiv, there are protests about the new Tax Code passed by the RADA but as yet not signed into law by the President……which seems a little bizarre when they could and probably should have been held when he was at least in the country.

Threats of strikes and civil disobedience abound of course.  Not exactly a new phenomenon looking at France, Greece and the UK recently as governments come to some sense of fiscal and economic understanding of the unsustainability of their positions looking forward 10, 20 and even 50 years.

The problem is, I have yet to meet anyone who has actually seen the new Tax Code that has been passed.  Rumour control has it that the President and his Administrtion are only now looking at it.  Rumour has it he will not sign the Tax Code in its present form but will be sending it back with “suggestions”.

Let us hope that Ms Akimova is allowed to do what she was appointed to the Presidential Administration to do.

Whatever the decisions made, there will be resulting unemployment both in the private and public sector as was seen under the Balcerowicz Plan in Poland and similar plans in Czech Rep and Hungary.

There is apparantly a lot of necessary and good content within the new Tax Code, however there still remains a reasonable amount of content that could be improved.

I have some faith in Ms Akimova, she is one of the most able people in any form of government (past or present) in Ukraine…….I don’t have the same faith that she will be listened to for long enough to get something that is 90% right and 10% flawed……after all there is no such thing as a perfect tax system or everyone would have the same system…..which we don’t even within the EU.

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