EU to send ‘frank message’ in action plan for Ukraine

Date: 24/10/1996

RUSSIA has occupied the thoughts of many EU officials for the past year, and Ukraine wants its turn now.

And it will have it.

The European Commission is working on an action plan for the Ukraine to parallel the one drafted for Russia last year. The aim of the plan will be to give a boost to Ukraine's political status, but it will also be used to convey a few blunt words to Kiev.

“Ukraine wants a political gesture because Russia has one,” said a Commission official. “They want political dialogue, so we will have it, but we want to give the Ukrainians some frank messages. They have had very positive results in democratic and macroeconomic stabilisation, but

there are still problems to work on, particularly in opening its economy to the world market.”

The action plan, which should start making its way through the Commission next week, will recommend that Kiev increase its efforts to restructure the economy and open it to foreign capital, consolidate democratic reform and train a new generation of administrators.

Unlike the action plan for Russia, which was drafted largely by representatives of EU governments, the Ukraine plan is a Commission initiative.

Commission officials say they have been looking for a way to take EU-Ukraine relations beyond the partnership and cooperation agreement (PCA) signed with Kiev in June 1994.

The PCA contains clauses on cooperation in industry, research, agriculture, combating money-laundering and drafting legislation, but it has remained frozen because of ratification delays in 11 Union member states.

Ukraine's parliament and the European Parliament were quick to approve the agreement, but until all 15 EU nations have followed suit, it cannot take effect. Through an interim accord, however, the PCA's trade chapters have been operational since February.

While moving ahead on the action plan idea, Commission officials say that getting the PCA implemented should be the EU's first priority. Foreign Affairs Commissioner Hans van den Broek visited Ukraine in September to stress Union support for the country. While there, he pledged some 540-million-ecu worth of technical assistance for four years in a scheme to be run by the Commission's Tacis programme.

The Tacis money is aimed at helping Kiev build democratic institutions and teach administrative skills, supporting economic reforms and beefing up

the private sector through projects to privatise state enterprises and help small businesses.

But, said a Commission official, none of that help would be worthwhile if Kiev did not pull down the trade and investment walls still surrounding Ukraine in the form of rules hindering foreign investment and tax regimes which discriminate against foreign products.

“Tacis will not change their life, investment will,” he said.

This month, Union governments instructed the Commission to negotiate a new trade agreement with Kiev on some steel products, with the aim of gradually reforming the sector in Ukraine and opening the EU market to its products.

Despite the current focus on new ties with Ukraine, the Commission is still fulfilling its traditional role there.

Two weeks ago, it granted Kiev 1.3 million ecu for a vaccination campaign against a diphtheria epidemic and a test programme to detect cancer in residents of areas most affected by the Chernobyl nuclear disaster.

The ECHO office has been paying for medical supplies and vitamins for those affected.

In addition, some 500 million ecu has been earmarked in the EU budget to help Kiev cover the costs of shutting down the infamous power plant and finding alternative energy sources.

The European Bank for Reconstruction and Development (EBRD) is expected to give Ukraine a grant of 118 million ecu for the Chernobyl closure, and the G7 has already pledged almost 2.5 billion ecu to help meet the cost.