Archive for November 23rd, 2017


ENP Summit, Brussels – Expectation Management

November 23, 2017

President Poroshenko arrived in Brussels on 23rd November ahead of the Eastern Neighbourhood Policy Summit on the 24th.

As of 23rd November, there was no agreement between Ukraine and the EU over the wording of the final declaration to be released at the conclusion of the Summit.  (Naturally the wording of such statements are usually negotiated ahead of a Summit – for what will be agreed or otherwise is also usually known ahead of the Summit.)

To be blunt, despite months of rhetoric about a Lithuanian devised “Marshall Plan” or as it is known “Europe Plan” for Ukraine, it seems doubtful that this will progress beyond rhetoric.  The failure of Ukraine to comply with the agreements it made for a €600 million macro-finance assistance programme (that concludes this year), will naturally not encourage those that have reservations about a proposed “Europe Plan” of €5 billion per annum over 10 years.

That is particularly so when previous agreements have been honoured with less than the integrity expected.

One of those agreements was the e-declaration of officials that still has no working and efficient verification mechanism to evaluate the e-declarations submitted.  This was a prerequisite of Visa-free for Ukraine.

The e-declarations system works.  About 1.5 million e-declarations were submitted by officials – of which about 100 have actually been thoroughly verified.  Thus the verification system doesn’t work.

Further, following whistle blower allegations last week from within the body tasked with those verification, there are alleged nefarious practices supported and instigated by the management relating to verification outcomes in concert with certain political bodies.   Criminal investigations have been opened.  Thus the verification system exists on paper (and in statute) but is simply (and deliberately) not implemented.

Thus, if there is to be any financial result for Ukraine from the ENP Summit, then it will be about just how much of the €600 million macro-finance assistance programme Ukraine can release from the EU before year end, without having fully upheld its side of the agreement.

The outcome is naturally not going to be optimal for Ukraine.  The President will blame the Cabinet, or the parliament, or both, and each in turn will blame the others too.  Collective finger pointing and ultimately no accountability.  Nevertheless, if one party to an agreement does not fulfill its obligations, then the other party of to the agreement has no obligation to fulfill theirs either.

This is not the only bone of contention.  The exasperation of the EU Ambassador to Ukraine, Hugues Mingarelli, over the stalling regarding the anti-corruption courts, and interference with, not to mention the resource starvation of the recently created anti-corruption bodies, is abundantly and unambiguously clear from recent his statements and speeches.  His words, naturally, are an expression of EU exasperation.

Clearly there will be little FDI into Ukraine from European corporations or SMEs without a reliable, predictable rule of law and anti-corruption measures.

Perhaps the EU can be persuaded to make available its “insurance scheme” for high risk investments/market entry that currently runs relating to Africa, in an attempt to encourage some to look to Ukraine?  It would be an accomplishment.

Depending upon which Ukrainian politician a reader may choose to believe (if any), the EU-Ukraine Association Agreement is somewhere between 15 – 20% accomplished (at least on paper via statute and/or regulation if not necessarily in implementation).  The EU-Ukraine Association Agreement, if or when thoroughly implemented, would take Ukraine a long way toward achieving the criteria for the 30(ish) chapters of the Aquis Communautaire – and the Aquis is the benchmark to meet for EU entry.

Unless there is mention of Ukraine’s legitimate rights under Article 49 of the Lisbon Treaty to join the EU (when it meets the benchmarks of the Aquis (and not the benchmarks of the Association Agreement)) for the sake of inspiration and/or motivation, then there is really not much point in mentioning at all.  With a fair wind and clear horizon it will take 15 years to achieve.  And there is neither fair wind nor clear horizon internally or externally of Ukraine.

Society and civil society remain light years ahead of the majority of the feckless political class – would they consider any such mention as “inspirational/motivational”, or delusional should President Poroshenko attempt to put tinsel and bells upon any such mention?

A reader, and no doubt those within the EU and its Member States, will also be aware that reform will probably now slow yet more.  Not across the entirety of the reform spectrum, but certainly in some critical areas.  Much of the low hanging reform fruit that did not impact too greatly on vested interests has already been plucked.  That which did encroach upon vested interests but was nevertheless reformed, occurred during a time when national economic implosion was imminent.  Matters have eased slightly (if perhaps temporarily).

Now however, the wiggle room to avoid the further conflict with vested interests is dramatically reduced.  Schemes and scams are actively being created to compensate those vested interests that lost out in other ways.  There is a constant battle to prevent a reversal of some reforms.  And there are presidential and Verkhovna Rada elections 15 months or so that will probably also slow meaningful reform.

Thus far a perhaps pessimistic and grim read – but that is not the intent.  The intent is expectation management.  So onward!

In any Summit declaration there will be positives.  Motivational quips.  There will rightly be acknowledgement of successes.

It will be interesting therefore to note any specifics and see which are new and ne’er used before.

As genuine as past successes are, running off tired and weary reform highlights such as banking sector policy, or progress in energy reform, or the reformatting of the police ( all long since overworked as motivational accomplishments) require an update.

What will be the new successes highlighted?

Structurally, decentralisation seems to be working fairly well (despite far too many corrupt Mayors running decentralised budgets).  It is often an understated reform, yet the structure and process appears to work as intended.

What else?

Medical reform exists only in very recently passed statute – effective implementation has not begun.  Education reform, also recently passed, if it appears in any Summit declaration, would have to be carefully worded to get the consent of certain EU nations.  Judicial reforms are far from perfect and it will be some time before the outcomes of them can be assessed.  (Ultimately it will be the Ukrainian constituency that suffers the Ukrainian judicial system that will itself judge.)

Something new and positive will be found.

Should a reader actually be looking at what is in the Summit declaration, or rather than looking for what is not in it?

Whatever the case, it would be prudent to limit (quite substantially) any expectations from the declaration that will be delivered from the ENP Summit.

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