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EU preaches tough love for impatient Ukraine
November 22, 2017 / 10:54 AM / 22 days ago

EU preaches tough love for impatient Ukraine

* Ukraine seeks EU membership but West says reforms first

* Summit to highlight diverging path of eastern states

By Robin Emmott and Alessandra Prentice

BRUSSELS/KIEV, Nov 22 (Reuters) - Ukraine’s EU membership ambitions will collide with the West’s reform demands at a summit on Friday with EU leaders ready to admonish Kiev for failing to implement anti-corruption laws that would bring it closer to the West, officials say.

European Union leaders gathering in Brussels for the biennial “Eastern Partnership” summit with Ukraine and five other former Soviet republics are worried Kiev has lost interest in the reforms it began with zeal after its pro-European uprising in 2014.

At stake for Kiev is new funding to rebuild the corruption-ridden economy, including a possible donors’ conference, more EU financial-sector aid and a Lithuanian-led push for 10-year development fund.

“We have to show some tough love because friendly advice isn’t working” said a senior EU official preparing the summit with Ukraine, Georgia, Moldova, Azerbaijan, Armenia and Belarus.

Ukraine is the highest-profile test of the EU’s 15-year-old policy to build an outer ring of market democracies from the Caucasus to the Sahara without offering EU membership.

Backed by Washington, the strategy has so far worked by rewarding President Petro Poroshenko with attention, visa-free travel for Ukrainians and a free-trade deal with the EU.

But Ukraine remains perceived as one of the world’s most corrupt countries, according to Transparency International, ranked 131 out of 176 countries in 2016.

Olena Halushka of the non-governmental Anti-Corruption Action Centre in Kiev said the political elite was now trying to “fake” the reforms agreed with Western donors, including energy, judicial and police overhauls.

“We are also witnessing attempts to roll back the achievements,” she said of Poroshenko’s reforms since 2014.

EU leaders are expected to “acknowledge the European aspirations” of Ukraine, Georgia and Moldova in a summit statement - EU code for closer ties but not membership.

Kiev wants a promise of EU membership. Washington and Brussels say Ukraine would do well to follow the reformist-minded Baltic countries, now EU members, who as outsiders in the 1990s were told they had little chance of joining the bloc.

“Ukraine is at risk of taking our aid for granted,” said a second EU official involved in policymaking with Kiev.

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Poroshenko, whose country is battling with a Russian-backed insurgency in eastern Ukraine, says the country has implemented more reforms in the past three years than in all of the last 24.

But lately, the message from Poroshenko’s government is to back off in the run-up to the 2019 presidential elections, which will be the focus now, EU officials and diplomats say.

“A year ago, things were looking promising, but now vested interests are fighting back,” said a third EU official. “We can’t plough more money into Ukraine on that basis.”

There are achievements, including a revamped police force, a wealth declarations database for officials and modernisation of the banking sector and state-owned energy firm Naftogaz.

But some proposed laws, such as to legalise agricultural land sales and set up an independent anti-corruption court, have been pushed back, while some existing reforms are under threat.

The wealth declarations register, launched in October 2016, is ineffective because authorities have not introduced software that would cross-reference data and identify malfeasance.

Slow progress on the anti-corruption court and backtracking on gas pricing commitments have also stalled funding under Ukraine’s $17.5 billion IMF programme.

Accusations that Ukrainian officials have tried to undermine anti-corruption investigators are a concern, EU officials said.

With no threats other than withholding aid, the EU has few new incentives, having granted visa-free travel and market access to Ukraine.

“We definitely need to look for new carrots, which would be linked to reforms,” said activist Halushka. (Reporting by Robin Emmott and Alessandra Prentice; Editing by Richard Balmforth)

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