Earlier this summer Croatia became the 28th Member State of the European Union. Other countries that were once part of Yugoslavia are working hard to follow in Croatia’s footsteps. Ukraine along with most other Eastern Partnership countries is hopeful that the Vilnius Summit in November will mark a new stage in its relationships with the EU. Meanwhile, the eurozone has returned to growth. So, after sixty years of existence, the EU continues to be a powerful vehicle for change, offering increased security and prosperity to the 500 million citizens whose countries are already Member States as well as those that wish to join our “club.”
It would be wrong to claim that the European Union does not have its challenges. That is why the British Government is working hard to make the EU more competitive and democratically accountable – and not just for Britain’s benefit, but also for all Member States.
The EU still accounts for a quarter of the world’s economy and its combined GDP totals more than 17 trillion dollars (by way of comparison, the GDP of the Customs Union stands at 2.1 trillion dollars). Many European companies are world leaders thanks to their cutting edge technology – look at Rolls Royce and BAE Systems in the aerospace sector. Look too at the success of European brands – witness the growing number of cars made in Britain – Minis and Range Rovers, for example – on the streets of Ukraine.
Of course, the European Union could and should do better. Hence Britain’s call for the EU to become more flexible, adaptable, and open. Developing the Single Market further is critical; for now it remains incomplete in services, energy, and digital – the very sectors that are the engines of a modern economy – and is therefore half the success it could be. Take energy as an example – the European Commission thinks fully integrated gas and electricity markets could yield savings of up to 65 billion euros (about 86 billion dollars) a year. European governments must grasp the nettle and deliver the much-needed reform that has been talked of for far too long.
And the European Union must keep its doors open to new members. Since the collapse of the Soviet Union, Britain has championed the entry into the EU of those countries that lost so many years to Communism. We hope that one day Ukraine will also become a Member State if that is what its people want. We therefore look at the Association Agreement, which will be signed in Vilnius if the Ukrainian government demonstrates determined action and tangible progress in addressing the reform agenda that it has agreed with the EU, as the first step which could in time lead to full membership for Ukraine.
The British government has yet to take a decision on whether we will sign the Association Agreement in November. Our decision will be based on an objective assessment of whether the changes introduced provide sufficient evidence of a genuine commitment to reform. We very much hope that we will be able to launch a new phase of EU-Ukraine partnership at Vilnius. But we need to be convinced that it is really going to work. So I would urge the Ukrainian government to use the few remaining weeks before the Vilnius Summit to redouble their efforts to address concerns about selective justice, the rule of law, the business climate, and electoral reform.
I know there are some in Ukraine who argue the EU is seeking to impose alien values and excessively demanding standards onto Ukraine. I disagree. The reforms that will flow from Association Agreement will be good for Ukraine. Consider how they have worked elsewhere. The rules-based economy that European integration has brought has helped to transform Ukraine’s neighbors, such as Poland and Slovakia, into dynamic and increasingly prosperous modern economies. In Poland, GDP per capita has grown from 2,406 dollars in 1991 to 13,463 dollars in 2011 and life expectancy has increased from 71 to 76 today. Such figures speak for themselves.
Some pessimists question whether Ukraine has what it takes to follow suit. No one can guess the future. But I am convinced that if Ukraine embraces the sorts of reforms that its EU neighbors have introduced – tackling corruption, cutting red tape, unleashing the potential of its young people, and freeing the hands of entrepreneurs and SMEs – the future looks bright. One recent Ukrainian-German study suggested that living standards in Ukraine could increase by more than 11 percent in the long term as a result of closer European integration. Why? Because Ukrainian companies will be able to trade with their EU counterparts on an equal footing, learning to compete and break into new markets as thousands of Polish, Czech, Slovak, and other firms have done. And more foreign direct investments should flow into the Ukrainian economy, bringing new jobs, modern technology, and better management. And I know the benefits that such investment can bring; since 2004, Britain has been the destination for one in five of all inward investments into Europe.
Closer European integration is not, of course, just about the economy. Ukraine will also benefit from the EU’s experience in areas such as improving water and air quality, road safety and phyto-sanitary standards. Ukraine’s membership of the Single European Educational Space will create new opportunities for greater cooperation between Ukrainian and European universities. And the European Union will not be an idle bystander. Support and assistance will continue, building on the 3.1 billion euros that the EU has already invested in Ukraine. When we work in partnership, we are “Stronger Together.”
Before I close, let me nail a couple of destructive myths once and for all. Firstly, a closer relationship with the EU does not mean that Ukraine will lose its identity. The British government believes passionately that differences between countries are one of the EU’s strengths and not a weakness. Nations will always want to nourish their distinct traditions and cultures. And, secondly, this is not a zero-sum-game. There is nothing in the proposed Association Agreement or the Deep and Comprehensive Free Trade Area that would hinder Ukraine’s existing ties with Russia. Indeed, we would fully expect such ties to grow and flourish.
Closer European integration opens up a vast array of new opportunities for Ukraine and its people. At the heart of those opportunities is an exciting agenda to transform Ukraine, its economy and institutions to build a modern and prosperous European state. Ukraine has a great opportunity to be a partner of increasing influence and value. Change will not happen overnight. But with commitment and determination, it will come. That will be good for Europe and Britain. Most importantly, it will be good for Ukraine.