Economic bonuses from our cooperation with Europe

The World Bank will help Ukraine prepare for the signing of the agreement on a free trade zone with the EU.

This announcement was made last week by Senior Economic Advisor of the World Bank Departments in Ukraine, Moldova, and Belarus Martin Reiser, who unveiled a project to provide Ukraine with the Program of Technical Assistance. The project stipulates the involvement of representatives from the Ukrainian group that is negotiating the creation of an advanced free trade zone (FTZ) with the EU.

Officials, European Commission experts, and specialists from countries that have already signed similar agreements will also be involved. They are all invited to attend joint seminars to work out a list of tasks and necessary reforms that are required for signing the agreement as soon as possible. The experts think that this will help identify the main problems on the way to the agreement, although they are convinced that the duration of the preparations for signing the agreement and its effectiveness will depend completely on the political stability in the country.

“The team of World Bank experts who are working in Ukraine will combine the knowledge and experience from different sectors, which will help to understand the consequences of trade integration and harmonization of the legal system through the entire spectrum,” Reiser said. Assistance will be given to eliminating technical barriers, adjusting Ukrainian phyto-sanitary standards to EU specifications, and regulating financial and banking markets, and customs issues.

Officials explain the cooperation with the World Bank by the need to analyze the situation from a non-Ukrainian expert’s point of view. According to Ukraine’s Deputy Prime Minister Hryhorii Nemyria, the government understands that “since the European political anchor (in the form of membership prospects) will not in the short- or medium-term remain as strong as it used to be for our western neighbors, this has to be compensated by strengthening the European economic anchor.” Simply put, as long as there’s no hope for us to become an EU member soon, we ought to get at least some economic bonuses from our cooperation with Europe.

How much time will this take? Officials and experts have different opinions. However, no one denies the impact of Ukraine’s political instability on this process. In Nemyria’s opinion, the more stable the situation in Ukraine is the more positive dynamics the negotiations will have. Still, their duration will also be influenced by the European parliamentary elections as well as the formation of the new European Commission. In general, EU negotiations on signing FTZ-creating agreements take between two and five years. “We will try to make it closer to two years, although it’s too soon to mark the red-letter day on the calendar,” Nemyria told The Day.

Vasyl Yurchyshyn, director of economic programs at the Razumkov Center, thinks that this prognosis is too optimistic. He has no doubt that the World Bank will ensure the maximum efficiency of the project. The question is whether the government, which even today is not following all the recommendations on introducing unpopular economic reforms, will take advantage of it.