Delegation of the European Union to Ukraine
I would like to start by apologizing, because I am not able to express myself in your language. I do my best to learn Ukrainian and I hope that next time we meet I will be able to say a few words in Ukrainian.
I want to thank you for being here. It a real pleasure for me to meet all of you. I am grateful that you have been able to take a few minutes from your busy agenda and come here to participate in this exchange of views on what the EU is trying to do in your country.
I have been here for six weeks now. Before meeting the press, which is one of the most important actors in this country, I wanted to use these six weeks to meet with the political leadership, civil society, which is a very important actor as well, with activists and business community representatives. I also wanted to meet with Ukrainian partners to better understand what is going on in the eastern part of your country and the situation with IDPs, who are affected by the conflict and who are suffering from the aggression your country is a victim of.
After these six weeks of intense meetings, I must say that my overall impression is very positive. I have a feeling of being in a country, which is moving towards an open and democratic form of society. This does not come as a surprise to me, because, although I am here for only six weeks, I have first been to Ukraine a few months after the independence of the country in 1991. Since then I was a regular visitor, because I took part in negotiations on the first Partnership and Cooperation Agreement in the nineties and I was a chief negotiator for the Association Agreement between 2007 and 2010. I put in place a technical assistance to the countries of the former Soviet Union in Ukraine. So I’ve been involved into EU-Ukraine relations for more than 25 years.
Still, since I have been established here in Kyiv, I noticed that you have an extraordinary vivid civil society. What do I mean? Every day I receive a lot of mails from Ukrainian activists, NGOs and associations drawing my attention to draft laws in the Rada, proposals by the Prosecutor General and the statements of your ministers. Anybody in this town says something that puts at risk the reforms process, civil society reacts immediately. You have so many people who express their views spontaneously to criticize the government and apparently in a free way. They do not fear the oppression, otherwise they would not send emails to someone they do not know. I a country like that autocracy has no chances to come back.
My strong feeling is that the changes in Ukraine are irreversible. I am no telling you that everything is perfect. As in every society, you have people who will try to oppose the movement towards democracy, openness and equality between citizens. Then again, this is not a peculiarity of Ukraine; such people exist in every society. You have the reformers, who try to push the society towards more equality, more liberty, more freedom, better living conditions for the population, and you have those who try to protect their interests resisting the changes. Nevertheless, my feeling is that forces working for change are more and more powerful. Obviously, among these forces are civil society, trade unions, members of political parties that aim to modernise this country — and media as well. Media is a component that is completely indispensable if you want to support the reforms.
We need free and independent media. It is clear that businessmen try to control the media, but we have to make sure that media reflect the debates which exist in the society and most political parties can find a way to express their views through main media. In this regard you can always rely on the EU delegation. We will be extremely attentive to the media situation and we will mobilise all the means to help you.
My feelings are very positive, because over the last two years this government as well as the previous government of Mr. Yatsenyuk managed to achieve significant results. They managed to stabilise the microfinancial situation. I do not know many countries where the budget deficit has been cut from 11% to 3% in two years’ time, current account deficit reduced from 20% to 3,4%, and the national currency stabilised despite the armed conflict on its territory. I give a full praise to what has been done over the two years of Yatsenyuk and Groysman govenments.
Now it is necessary to work on the structure of reforms starting with the pensions system, which is not very viable and sustainable. You will also have to improve the cooperate governance of state-owned enterprises. At the same time, your authorities are to prepare the ground for an open and transparent privatisation. In the agricultural sector, where the potential of your country is huge, you also have to work on privatisation and land restructuring. You have to complete the clean-up of the banking sector. A lot has been done already: more than 40 banks were closed, and that is a remarkable achievement, but there is still a long way to go.
There were many reforms in energy sector like increasing tariffs for electricity and gas to bring the prices closer to the market level. Gas market law was redacted. Recently the law on an independent electricity regulator was adopted. We know as well that the preparations for the unbundling of Naftogaz are underway.
Over the last few months, the government has been working on moving things in the right direction. There are many important reforms have been conducted. Let me just mention the judicial sector, where steps were made to move towards the independent and effective judiciary.
New institutions in the anticorruption field—National Anti-Corruption Bureau, National Agency for the Prevention of Corruption, the Specialised Anti-Corruption Prosecution Office—have been established.
We know that there are problems and we can discuss them, but new institutions are being established and new legal framework has been put in place.
However, as we know, new institutions and laws are not enough in the fight against corruption. There is a third very important factor: mentality. Its change takes more time, it is not a question of months, or even years—it is a question of decades. Anticorruption is an endless fight, and it is extremely hard to get significant results. Still, your government has been doing a lot, and you can be sure that we will do our best to share our experience in this area with them.
Decentralization is a very important reform as well. We know that responsibilities and financial resources have already been shifted to local communities—this is important. I do not know any example of the successful transition process in a country where there is no efficient state apparatus. It is important to have strong and efficient state with efficient ministries. In this regard, your authorities has taken steps to reform the public administration. This reform is very important. We in the European Union have experience to share with you and we are allocating considerable amount of money to boost this reform and support in through our cooperation projects.
Deregulation is very important as well. You need jobs, and in order to get them you need domestic and foreign investments. For that you need the rule of law, achievements in a fight against corruption, environment conducive for business. For all that deregulation is essential. We are ready to share our experience with you when it comes to creating the climate that is favourable to business development.
It is important as well to favour the development of small and medium enterprises. In our modern economies most jobs are generated not by big companies, but by small entrepreneurs. Therefore, it is important to provide advice, training and financing to small and medium businesses, which are likely to create jobs you need in your country.
For me it is extremely important as well to pay attention to the social dimension of the transition process. We are in a country in which for 25 years living conditions for the population have decreased due to a number of reasons. Today large majority of Ukrainians live in a very difficult situation. We have to do everything to ensure that the most vulnerable segment of the population are those who benefit from the economic growth. This requires a strong political will, because in a market economy it is not something that is spontaneous. You can rely on us sharing our experience in building a social market economy, where inequality is not very clear, and the most vulnerable get the support from government and public institutions and foreign donors.
So, we are ready to share our experience in building sustainable growth in this country. You need economic growth to create new jobs. It has to be sustainable, respect the environment, should not generate inequality and suffering for the most vulnerable.
Answering the journalist´s question on possible changes to the e-declarations and whether there was any agreement reached with Ukrainian side Ambassador Mingarelli stated:
We have been informed by the Ukrainian authorities on the fact that they were reflecting on some amendments to the current e-assets declaration system. We were as well warned by the members of NGOs, human rights activists, reformers that these moves are to be interpreted as an attempt to weaken, to water down the e-declaration system. And we have been discussing this in a very open and frank way with Ukrainian leadership, including president Poroshenko.
And what we have been told is that Ukrainian authorities have no intention to weaken the e-declaration system, they are only worried about the fact that all declarations could be accessible to everybody without any restrictions. And, they said, basically we are about to inform criminals about the fact that Ukrainian citizens, not business people, oligarchs or political leaders, but middle ranking officials have in the house a jewel coming from their family—I do not know what. And therefore we are basically paving the way for increased activity by the criminals. And, they say, we are reflecting on how we can ensure the full access of the declaration to the law enforcement agencies, but, at the same time, how we can limit the access of certain type of information to the public. Now, our reaction is to say yes, but we know that members of the law enforcement agencies are not behaving in a very honest way. And we don’t know if you can really fight corruption if you limit the access of certain information to law enforcement agencies.
So we are discussing this issue with the Ukrainian leadership, but again the main message of EU has been: please, do not weaken the electronic assets declaration system. It will be a disaster if you would not allow this system to operate freely so that Ukraine becomes more transparent society with more efficient fight against corruption practices.
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