TCS Daily

Don't Fear the Ukraine

By Sascha Tamm - February 23, 2005 12:00 AM

In all his talks with EU officials and politicians of many European countries, Ukrainian President Viktor Yushchenko is pushing to start negotiations on the accession of his country to the EU as soon as possible. The formalized accession process, he argues, should start not later than 2007. Newly elected Prime Minister Yulia Timoshenko is even more straightforward in her speeches.

But the EU commissioner in charge of external relations, Benita Ferrero-Waldner of Austria, remains quite hesitant. The essence of her position is that the EU/Ukraine Action Plan from 2004 should be the framework for future cooperation. Ferrero-Waldner repeated this position during her visit in Kiev last Sunday. She pointed out that the "Action Plan" includes a lot of opportunities for the improvement of the political and economic relations. To become an accession candidate, the Ukraine still has a lot of work to do, Ferrero-Waldner added. She is supported by the major players in the EU such as Germany and France and by other high-ranked officials, including Javier Solana. The official standpoint of the EU seems to be appropriate. The Ukraine doesn't meet the so called "Copenhagen Criteria" for accession negotiations. Its economic and administrative shortcomings are obvious.

However, the EU position is not forward-looking at all. There are two main reasons that this policy which is not in the long-term interest of Europe. The first is a misconception about Russia and its influence, the second results from internal problems of the EU in areas like subsidies and foreign trade barriers.

1. The political thinking about the Ukraine (and other eastern neighbors as well) is still influenced by the idea of Russia having "special interests" in this region and that these interests require special attention. This is part of the "special relations" with Russia. On the part of the EU, these relations are characterized more by fear rather than by reason and courage. This policy is neither in the interest of Europe nor in the interest of EU's eastern neighbors. It is also not in the long-term interest of Russia, because it produces incentives for bad policies.

Following the media coverage and the political statements during the "Orange Revolution", there was much discussion of a the division of the country into a "Ukrainian" and a "Russian" part. This is a problem, but not a decisive one for the future of the country as a democracy and a market economy. The population of the eastern part of the country may have been influenced by the Russian government to some extent, but the Russian interference was successful for some time only because of the deep economic problems in many Ukrainian industries. If the Russian speaking population (besides, a lot of these people define themselves as Ukrainians) could trust in a perspective to join the EU, almost nobody would shout for Moscow, as has been demonstrated by the experiences of the Baltic States.

An accession perspective would give the Ukrainian government, the administration and the economic leaders and entrepreneurs strong incentives to modernize their country. This perspective helps to solve problems which are cited as barriers for the accession by the EU. Last but not least a fast movement towards accession negotiations would influence the political situation in Russia and Belarus - in a positive way.

2. The other reason for the EU's hesitation is an internal one. The financial re-distribution systems of the EU are not able to cope with the accession of Ukraine (nor of Turkey, for the matter). Farm subsidies, regional funds and subsidies for other industries are counterproductive for the European economy, but they are heavily defended by the bureaucracy in Brussels and the majority of European politicians. European farmers, shipbuilding companies, steel mills, etc., lack competitiveness because they were fattened by huge subsidies and protectionism over decades. All these industries fear new competition, for example from farmers producing on the world's most fertile soils in the western parts of Ukraine and from steel mills in the eastern part. Today a lot of goods from Ukraine are subject to anti-dumping measures of the EU.

The whole re-distribution system cannot work with more than 120 million new citizens - including Ukraine and Turkey. Politicians who trust in re-distribution and centralization will conclude from these facts that an accession will be unrealistic for a long time. Politicians who trust in markets would conclude that the EU needs far-reaching reforms and must open all its markets completely. Unfortunately the former are still in the majority.


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