Ukraine: Focus on foreign policy

Iurii Vdovenko, Foreign Policy Council "Ukrainian Prism" (Ukraine, Kyiv)

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While the domestic events in Ukraine were about the notorious corruption cases, on the foreign policy arena June brought quite a lot of success and a series of the important victories for Ukraine. As for its economy, the country deserved both praise and disapproval from its Western partners

Domestic Policy. Corruption fight and “bread truce

In June, the Office of the Prosecutor General of Ukraine, Specialized Anti-Corruption Prosecutor’s Office and National Anti-Corruption Bureau of Ukraine became the main newsmakers in the country. The Verkhovna Rada had to decide on the criminal proceedings for as many as five MPs  at a time suspected of the corruption: namely, the MPs from the presidential faction of the Petro Poroshenko bloc, the “People’s Will”, the Radical party and the “People’s Front”. Another high-profile incident included the detention of the web-based media resource “Strana” editor-in-chief who was suspected of blackmailing and getting of $10 thousand for a refuse to publish some materials compromising an MP.

Another high-profile scandals rather overshadowed the ongoing “trash crisis”, meaning the struggle of the city of Lviv in the West of Ukraine with its waste disposing and taking to the other landfills. Some “Samopomich” (or “Self Reliance”, a party led by the major of Lviv) MPs believe there is a political background for this situation, already threatening to become an environmental disaster, and thus they gone on hunger strike.

Some tensions remain in the ATO zone. There is still shellfire, despite the agreement reached on the so-called “bread truce”: a peace and quiet order covering the entire harvesting season. Every day the number of killed and wounded is growing, with a stated new concept of reintegrating Donbas becoming highly publicized. Its appearance calls for the concerns regarding the full-scale hostilities being renewed.

Therefore, the anticorruption remains a hot topic for Ukraine, and yet again the expectations are raised high as the initiated investigations are set to be finished. The demonstration of the results will be able to make a positive impact both on the rhetorics, and the Western partners support to become a turning point for the restoring trust to the incumbent authorities within the country.

Economy. One step back, two steps forward?

As for the Ukrainian economy, June saw the tensions intensifying in the Ukraine’s relations with the EU, as the Verkhovna Rada of Ukraine reduced the term for the raising export duty on black scrap metal.

Taking into account that this is a repeated situation, a strident reaction is expected from the European side. Just before the Verkhovna Rada adopted the law, the EU Delegation called on the Verkhovna Rada to respect the accepted international obligations and criticized it for the reform process blocking.

At the same time, in the frames of a sustainable energy week the EU Delegation registered some progress in this field of reforms. In June, adopting of the landmark laws on the commercial accounting for the housing and public utilities services and energy efficiency became yet another step on the way to the full-scale reforms. 

Starting 11 June the Ukrainians are able to enter 30 European countries without visas

The banking sphere also demanded some attention this month. The national currency keeps getting stronger, the foreign exchange controls are going down, and the “cleaning” of the market through the banking institutions liquidation is still going on, while a decision on UAH 38.5 bln (approximately EUR 1.3 bln) capital increase for PrivatBank, recently turned state-owned, was taken.

Since the Ukrainian economy is demonstrating some signs of a spotty economic performance, its attempts to act on-the-spot instead of the systematically fulfilling its obligations in the frames of the Association Agreement may have far-reaching consequences, connected particularly to limiting or postponing the aid granted to the country.

Foreign Policy. Bundle of success

June turned out to be quite full of the foreign policy developments proving important for Ukraine.

On 31 May the Stockholm Arbitration Court granted a major victory to Ukraine following a dispute between NaftoGaz (the national oil and gas company of Ukraine) and Gazprom (the Russian sated-owned gas company), rejected Gazprom’s “take or pay” claim, pointed out the necessity to revise the price in accordance with the market, and annulled the destination clause.

There is no doubt that the most important development of the month was the ending of the epic visa-free regime process with the European Union granted to Ukraine. Starting 11 June the Ukrainians are able to enter 30 European countries without visas.

Not least important was the President of Ukraine Petro Poroshenko’s visit to the USA. The success of this visit can be evaluated in various ways, however, the very fact of his meeting with the President Trump prior to the Trump’s meeting with Vladimir Putin is already a positive sign. The foreign policy activity later continued at a summit meeting in Paris, where the President Macron confirmed the consistent course for the support of Ukraine.

Another positive news came when the USA and the EU prolonged and broadened their sanctions, continuing to put Russia under pressure. In this context, the changes to the Ukrainian legislation should be mentioned. They include naming a NATO membership the Ukraine’s national priority.

The facts above provide a background for the optimism, while showing that there is still an international coalition to support Ukraine, yet leave no doubt about the necessity to reach further progress in the domestic reforms implementation agenda.