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How Could the EU Accelerate Reforms in Ukraine?

03:54 26.11.15
The policy paper was prepered by Sergiy Solodkyy, First Deputy Director of the Institute of World Policy, and Vitaliy Sharlay, expert of the Reanimation Package of Reforms.

To download the full text of publication, please, click here.

It is a discussion paper, so we invite Ukrainian and foreign experts to share their opinions on this matter. The final document will be published later

Though it does not say so publicly, the European Union considers Ukraine’s success in implementing reform as perhaps the only viable alternative to aggressive confrontation with Russia. Successful reform in Ukraine would mean the victory of the European Union’s “soft power.” A defeat for Ukraine would mean not only a loss of reputation for the EU, but an increase in the threat to the eastern part of the continent. Without outside help, Ukraine cannot avoid a deep crisis. This help cannot only be financial: both the opinion leaders of Ukraine and the average Ukrainian citizen is that financial assistance is not the main priority. Yet there is a perception within the EU that Ukrainians want only money, and therefore will become a burden (IWP’s public survey, conducted in 2015 in six EU member states, demonstrated that 22 per cent of the Europeans this argument)1.

Our analysis shows that such suspicions are completely groundless. The main conclusion of our data study is the following: only a tandem approach of support by the EU, combined with determined non-governmental initiatives in Ukraine, can catalyze major change in the country. EU assistance to date has not impressed Ukrainians. The Ukrainian authorities are asking the EU for greater urgency and flexibility that takes into consideration Ukraine’s needs. Ukrainian experts are insisting that the EU should increase pressure on the Ukrainian authorities to ensure the success of reforms. The opinion of average Ukrainian citizens is the same: the majority of Ukrainians believe that the EU should put more pressure on Ukrainian leaders to make the process of change more intensive. Obviously, opinion leaders in the European Union will not support all the opinions of Ukrainians - and not least of all because Ukraine must first demonstrate the same determination to ensure change. This analysis is based on confidential interviews of decision-makers, experts survey (65 persons participated), and the unique public poll representing expectations and perceptions of ordinary Ukrainians.

1. WHY IS THE SUCCESS OF UKRAINE SO IMPORTANT TO THE EUROPEAN UNION?

Ukraine’s political behavior has put the EU in an awkward position at least three times. The first time was in 1991, when some European leaders tried to persuade Ukraine not to withdraw from the Soviet Union. There were those who did not believe in the durability of the new nation, suggesting that sooner or later it would be absorbed again by Russia. The second shock to Europeans was the Pomarancheva revolyutsiya (the Orange Revolution) of 2004. EU leaders were so accustomed to authoritarianism being accepted in Ukraine that they had not even bothered to provide any prospect of membership to the Ukrainian authorities. Public opposition to the political intrigues of former President Leonid Kuchma was a cold shower for the EU, as the leaders of the member states lost any real justification for excluding Ukraine from eventual membership. The lack of reform in the country after the first revolution, however, provided the EU with new arguments to refuse Kyiv. The Revolution of Dignity of late 2013-early 2014 posed an even greater challenge, as it drew forth far deeper problems not just regionally, but globally. The Ukrainian desire to change, to overthrow the system of clans and oligarchs, and to establish a responsible government, has provoked much enthusiasm in the EU. The “Euromaidan” gave the EU regulatory structures new evidence of their effectiveness, but the inspiration did not translate into an ambitious project to transform Eastern European countries (primarily Ukraine, Moldova and Georgia) into models of democracy.

Stakeholders justify the importance of turning Ukraine into a European success story for a number of reasons:2

Demonstrating the EU’s “soft power” in action. Successful Europeanization in Ukraine, with implementation of democratic reforms and an economic recovery, would be a powerful tool for self-actualization within the EU. European politicians would have additional arguments to counter their citizens’ skeptical attitudes towards Europe.

Expanding the area of stability. The transformation of Ukraine into a stable and prosperous nation would guarantee the security of the EU’s eastern borders. The current refugee crisis should make even clearer that the problems of Ukraine today could be the problems of the EU tomorrow. A transformation in Ukraine would be the best step possible for regional security.

New economic opportunities. Ukraine is a country with competitive human resources and is a massive market. It could be a profitable partner for mutual economic initiatives.

Alternative to the Russian authoritarian model. The transformation of Ukraine into a successful country would stimulate broader democratic processes across the former Soviet Union. A democratic Ukraine would dispel Russian arguments about the uniqueness of “Slavic Civilization” and its consequent failure to move towards Western standards of democracy. A successful, democratic Ukraine would undermine the foundations of Moscow’s “sovereign democracy” argument.

These arguments notwithstanding, the demands and maximalism of the active community in Ukraine can sometimes conflict with the opportunities and the unwieldy system of the European Union. In Ukraine you often hear the argument that the EU has no moral right to refuse Ukrainians who died for the European idea. Some opinion leaders (and apparently the average EU citizen) in turn believe that Ukrainians idealize the European Union too much; that Ukrainians have become the victims of a kind of self-deception – it was not worth dying for what many French, British, or Germans have been frustrated by for a long time3. Perhaps the EU representatives do not fully understand the scale of the issues present during the corrupt authoritarian regime of Viktor Yanukovych, when all sectors of Ukrainian society outpaced even the most negative indicators. Ukrainians have never idealized the European Union, and in certain issues they are perhaps even more skeptical than the Europeans themselves. Without massive support from the EU, Ukraine could achieve success only much more slowly, if at all. The EU has knowledge and experience that Ukraine does not have, as well as success stories like the Central European countries and the Western Balkans. Ukraine could be an addition to this list. To do so, however, it is important to understand which mechanisms could be used as a possible way to accelerate the reform course of Ukraine.

2. A BRIEF ASSESSMENT OF CURRENT EU SUPPORT FOR REFORM IN UKRAINE

Current EU support to implementation of reform in Ukraine consists of various types of financial and technical assistance in relatively small volumes. The creation of a number of unique mechanisms of assistance has enabled the suggestion that in the EU there is a will to find new ways to stimulate reform. However, Ukrainian experts often complain that the EU in the post-revolutionary period has been more focused on the development of the formats than on how these formats actually contribute to the transformation of Ukraine. The EU has given a truly important symbolic signal of their readiness to support Ukraine, but if it does not extend the mandate of these mechanisms, the support of the European Union will remain more symbolic than practical.

The political creativity of the European Union after the Revolution of Dignity has resulted, in particular, in the creation of the following unique mechanisms of support:

Ukraine Support Group within the European Commission chaired by Peter Balazs.4 This should be providing basic coordination for the European Commission to support Ukraine, and attracting experts from EU member states. In informal conversations, even diplomats from the embassies of EU member states express their skepticism, calling it a “mysterious body” in relations between Ukraine and the EU. In their view, the mandate of the group from the very beginning excluded the possibility of significant impact on developments in Ukraine. Representatives of the Ukrainian authorities have expressed their wish for the group to work in Kyiv on a regular basis in such a way that it can be a part of the reform process and take part of the responsibility. According to observers, the representatives of the group are more engaged in gathering information and its analysis for the EC than in providing actual direct advisory support for reform efforts. Representatives of the group, however, point out that their mandate does not allow them to exercise more influence.

The EU Advisory Mission for Civilian Security Sector Reform Ukraine (EUAM Ukraine), tasked with supporting the rule of law in Ukraine. The mission was established following an official request from Kyiv. It deals with reform of the police, the National Guard, security services, the judiciary, and the prosecution service. Observers comment on the long periods before EUAM Ukraine initiatives start. It did not manage to get involved in the large-scale project undertaken to re-establish the new police force, where the key role was played by the United States.5 Representatives the mission occupy themselves with too narrow a mandate, which reportedly prevents them from more effectively influencing reforms in Ukraine.

Support of reforms in the judiciary in Ukraine6 is a project that assists in developing the overall strategy for reform in the judicial sector. The initiative, lasting for three years, brings together most of the institutions of Ukraine involved in justice in order to develop and implement a general and collective strategy for reforms. The project itself was presented in October 2013, a few weeks before the Vilnius summit and the Revolution of Dignity. The Ukrainian non-governmental sector responded positively in general to the initiative, which was particularly important in the post-revolutionary period.

“European Agenda for Reform”7 is a road map for EU assistance that covers a wide range of activities, including priority areas for reform like political and economic questions in education, and science and technology issues. EU representatives have to connect provision of macro-financial assistance with the implementation of this document. Thus the “European Agenda for Reform” can be regarded as one of the mechanisms of conditionality policy for Ukraine, which was successfully applied to the countries of Central Europe. The main “carrot” for reformers of the former socialist bloc, however, was the prospect of EU ship and access to the considerable resources of the EU. Ukraine by contrast has received rather modest approach

This list of programs, initiatives, and support framework components for Ukraine is not exhaustive. There are many others, including separate ones from the EU member states, but the above have been the most noticeable during reform implementation. Support from the European Union is split between 250 projects carried out in Ukraine in a wide range of industries and regions.8 The EU is one of the largest donors to the country. Since 1991 EU assistance for Ukraine (not including that from individual member states) has amounted to over 3.5 billion euros, comparable to that of the US, which has given over 4 billion USD. European assistance volumes have grown every year, and over the past 15 years they quadrupled from 47 million euros in 2002 to 186 million euros in 2014.

In order to get a better understanding of the effectiveness of EU support for reform in Ukraine, the Institute of World Policy conducted a survey of experts, opinion leaders, and persons involved in the development and coordination of reform in Ukraine. The total number of respondents, 65, assessed different areas of EU assistance on a ten-point scale.9 Respondents assessed the EU’s level of support for reforms in Ukraine at 6.28 points. This level seems quite high, taking into consideration respondents’ generally critical replies during the interviews. However, Ukrainian opinion leaders are much more critical than European ones of the willingness of the Ukrainian authorities to consider reform proposals from EU experts, rating such willingness at 4.28 points. In these circumstances, EU representatives have a reason why they cannot find common ground with Ukrainian reformers.

Most respondents urged the EU to follow these principles in supporting reform in Ukraine:

- “More for More:” link political pressure and financial assistance

- Target and coordinate advisory assistance for specific reforms

- Support civil society

2.1. “More for more:” link political pressure and financial assistance

the experts surveyed were positive about the principle of conditionality, and the follow-on of financial support from the EU in return for the implementation by Ukraine of specific commitments based on pre-agreed criteria. The principle of “more for more” needs to continue. After the revolution, the EU announced the possibility of providing Ukraine with general funds of 11 billion euros, predominantly in loans. This is not a one-time allocation, but would come in several tranches over the next few years.

Financial leverage can be bolstered by the public activity of representatives of the EU. Statements by EU diplomats and politicians can help to strengthen the public’s pressuring of the authorities to implement reforms. Representatives of the EU should avoid the excuse of saying they cannot influence the reform process in Ukraine, because it is the prerogative of the Ukrainians, and the citizens have the sovereign right to influence its politicians. Combining the efforts of EU representatives and the community in Ukraine is the best approach to promote change, as has been demonstrated repeatedly.

Recently however, it has become evident that the EU has started to adjust its approach. Efforts to reform the civil service, including through EU financing for the national budget, only gained momentum after firm statements from the EU. Pressure from Brussels to fight corruption and establish transparent government is extremely important, especially in the context of dialogue regarding the ending of the necessity of the visa regime. Clear statements from the EU on the activity of the EU Delegation in Kyiv, operating in unison with NGOs, could eventually make progress on many issues concerning a visa-free regime between the two parties. For example, the EU representatives recently sided with civil society when the Prosecutor General of Ukraine opposed them by fighting the creation of a specialized anti-corruption prosecutor’s office.10

2.2. Target and coordinate advisory assistance for specific reforms

EU experts have provided great assistance during the drafting of resolutions of working groups in the ministries. Successful examples include the participation of EU experts in working groups on Civil Service reform, institutional reform of the law enforcement system, and constitutional reforms regarding decentralization.

The experience has not always been so positive, however. Many of the stakeholders interviewed stated that EU experts sometimes provide general information that can be obtained without the work of a specific project. In addition, disparate donors often operate as if in isolation from each other. The EU may not know about projects with Canada, and US officials may not be aware of assistance from certain EU member states. But sometimes even such knowledge may not necessarily improve the situation, as donor governments often apply their own long-term priorities irrespective of duplication. Foreign governments need to develop mechanisms for closer coordination of assistance allocation. Representatives of aid organizations understand this as well, though in practice such objectives remain only desires. Obviously, an internal audit conducted by the European Commission, other donors could allow an analysis of the feasibility of amending the planning of assistance. Such analysis would have levelled criticism from both the recipient of such assistance, Ukraine, and EU taxpayers. It is important to permit the possibility of rapid changes in priorities for assistance, given the dynamic processes in the Eastern European region.

2.3. Support civil society

During their interviews, opinion leaders evaluated highly support from the EU for civil society, specifically in the areas of expert consultancy aid, advocacy on socially important decisions, expert judgments, and legislative analysis. Some experts expressed a desire to expand the list of organizations designated for partnerships in order to promote reforms.

Communication between the heads of EU institutions and civil society representatives plays a crucial role in keeping EU leaders informed about civil society’s expectations or concerns. It is important that Brussels calls on Ukraine’s leadership to work together with civil society. Some experts also stressed the importance of visa liberalization of involving NGOs in monitoring the implementation of key reforms alongside the publication of results for the implementation of the Association Agreement.

2.4. Observations

Experts drew attention to the fact that the Ukrainian government does not always know how to use EU funds or for what purposes they can be used. As a result, these funds may not be used at all, or are allocated to non-critical tasks. Government officials have spoken in private about Ukraine’s inability to use the assistance of hundreds of millions of euros (a precise calculation is not attempted even in private conversations). Government officials say that the EU provides assistance to Ukraine, even without consulting as to whether it is actually necessary in a given area, and that everything is done from the position that Brussels knows best. This creates among Ukrainian officials a lack of responsibility for the assistance received, increasing the chances that money will be wasted.

One of the issues is an excessive system of bureaucracy for EU assistance provision, combined with the lack of skills on the Ukrainian side for planning and working within the EU system. The Ukrainian side, both civil servants and NGOs, are used to solving problems ad hoc and are not always aware of EU procedures for receiving specific assistance. One of the solutions to the problem is to send in advisers from the EU not only to help deliver the most needed assistance, but to control the efficiency of its use. The problem could be resolved by creating a joint working group that would identify the priorities for reform in Ukraine, and match those with the required types of assistance for faster implementation of any changes. However, this raises the question of whether the EU is ready to take responsibility and whether the government of Ukraine is ready to share areas of responsibility. Our communication with representatives of EU institutions and government officials indicated there is no enthusiasm concerning this issue yet.

Meanwhile, among Ukrainian experts there is strong concern about the ineffective use of assistance by the Ukrainian side. That is why organizations (especially those specializing in the war against corruption) are offering to create additional mechanisms to verify the use of EU funds by Ukraine. However, there is skepticism among experts, not only concerning the government of Ukraine, but also concerning Brussels’ own funding for its own institutions, and projects undertaken by citizens of EU member states. Certain stakeholders interviewed in Ukraine angrily suggested that the implementers of some EU programs arrived more to make money than to provide real help. Some Ukrainian experts refer to this category of project managers from the EU who receive large salaries as “casual workers.” Officials suggest that such project staff are interested not so much in prompt reform in Ukraine, but in the longer-term continuation of their lucrative projects, because if reform is successful, then their project may be closed down. The EU needs to be scrupulous in dealing not only with its partners from Ukraine, but also with its own staff deployed in Kyiv and the regions.

Another problem is the following: the EU is not always ready to quickly change its priorities regarding assistance; often proposals concerning assistance are too general. A possible way out of the problem could be better definitions of assistance – for example, not to direct funds to “rule of law” or “human rights” in general, but to define narrower areas that will actually help to achieve specified strategic objectives. Another important way out of the problem is to provide special funds for prompt response with simplified procedures for reporting.

3. THE MAIN SUCCESSES AND FAILURES OF REFORMERS OF UKRAINE

After the Revolution of Dignity the word “reform” has become one of the most fashionable in Ukraine. Although in most areas the process has been significantly delayed, for the sake of objectivity we should mention certain positive examples.

Combating corruption. Anti-corruption reform is one of society’s highest expectations after the revolution, but the Ukrainian elite still does not have the political will for a massive battle with corruption by means of a so-called blitzkrieg (as happened in Georgia). Only pressure by the EU and civil society has allowed the government to report some fundamental successes in preparing to combat corruption. Ukraine has created a National Anti-Corruption Bureau, which thanks to non-governmental organizations is less subject to political influence than it would be otherwise. Although the establishment of such institutions does not eradicate corruption, this initial stage does give cause for optimism.

Transparent tenders. A noticeable success is the change in public procurement, with the launch of a transparent public procurement system for government, i.e., the ProZorro system for disclosure of property registers and naming the final beneficial owners of legal entities. Average Ukrainians may not directly experience the benefits of such decisions, but the new legislation will save millions if not billions of euros in the area of public procurement. According to available data, 50 billion UAH every year (5 billion euros at the pre-revolutionary exchange rate11) were misappropriated in Ukraine through public procurement equal to half of Latvia’s annual budget. International observers, businessmen and community representatives have noted significant progress in the strengthening of the transparency of tenders in Ukraine in 2015.

New police. The introduction of a new police force has greatly increased citizen trust. The first results of the reform started with the transparent competitive selection procedures for police officers, training, and a successful launch in Kyiv, Lviv, and Odessa. According to opinion polls in the autumn of 2015, 81% citizens in Kyiv believe the police to now be an effective service.12 In May 2014, 67% of Ukrainians did not trust to the Ukrainian police.13

The emergence of the new police force was accompanied by a burst of supportive emotion among citizens as Ukrainians took massive numbers of selfies with police and posted them on social networks. Up to that point, the law enforcement system was considered one of the most corrupted sections of society, and violations of human rights in the country’s law enforcement agencies were not the exception but the rule. The launch of the new police force is the reform that has been the most highly visible to all Ukrainians. However, we should also recognize that police reform is still at a starting stage. To complete the changes will require at least another five years.

The project office of the National Reforms Council considers the following reforms to be successful: State property management (82% performance), agriculture (80%) and decentralization (76%). Least successful were health care (55%), public administration (33%) and energy (31%).14 The percentages show the level of acceptance of planned legislation, not just the effectiveness of the implementation of certain changes. Thus we can see that Ukraine as a whole is still very far from reaching even 50% of the reforms required. Among experts, there is a sense that changes should happen as soon as possible, even though there is no coherent strategic approach, with the result of fragmentation in the reforms implemented. The political elite often act as a brake, not a driver of change implementation. Only one thing can be stated in defense of the government: unlike all previous administrations, the current leadership demonstrates a higher degree of willingness to communicate with the public, and to work with it mutually on the implementation of certain reforms. The problem is also in the fact that the authorities in Ukraine suffer from weak communication and coordination of reforms.15 Therefore, observers both in the country and especially abroad often do not even know about the above-mentioned first steps toward successful change.

Summarizing the list of problems impeding the progress of reform in Ukraine, we can highlight the following:

Lack of political will to implement reforms. On the one hand, the nation’s leadership constantly declares its commitment to change. On the other hand, quite often the greatest degree of change comes only after external pressure. A striking example of the complexity of promoting reform is the adoption of the draft law on the civil service in its first reading (!) at the 20th attempt;16

Difficulty of coordinating and monitoring quality assurance of reform. Ukraine has adopted five strategic documents that complicate reform implementation:

Strategy of Sustainable Development “Ukraine – 2020”;

Coalition Agreement;

Cabinet of Ministers of Ukraine activity program;

Association Agreement between Ukraine and the EU;

Memorandum of Economic and Financial Policies between Ukraine and the IMF

Their effective implementation requires a large amount of accommodation and harmonization between the documents, which makes coordinating reform harder. The National Reforms Council was founded to solve this problem; it provides communication, coordination and monitoring of reforms at the highest political level. However, there is some lack of coordination at the middle and lower levels of implementation of reforms, and monitoring of the implementation of reforms requires a qualitative component;

Passivity of executives in the civil service. The problem of the passivity among civil servants was aptly commented on by Roman Waschuk, Ambassador of Canada to Ukraine, when speaking about the work of “middle authorities” at a conference of the Institute of World Policy in June 2015: “I have some advice to Ukraine: do not appoint snail’s-pace people to posts overseeing working with NATO.”17 This remark is appropriate to virtually all areas of implementation of reforms (not only with regards to cooperation with the Alliance), since any reform has administrative restrictions and requires changes of behavior on the part of executives.

3.1. EU tools in Ukraine: “Carrot and stick” and others

One of Ukraine’s greatest achievements in the near future may be the elimination of visas for travel to the EU. This “carrot” should be given only after significant success in the fight against corruption. Pressure on Ukraine on this issue could ultimately produce a sense of ownership for reforms n the part of the authorites. So far most of the reforms concerning the elimination of visas were came about through use of “the stick” by civil society and the EU. Only after the interference of the EU at the request of civil society did the nation’s leadership decide to replace a number of representatives of the General Prosecutor in the competitive selection commission for the establishment of a specialized anti-corruption prosecutor’s office. This model does not require much money. It only requires greater involvement from key stakeholders.

This example serves as the best evidence that the EU should pursue such policies in the future. At present, however, it seems that this approach is fragmented, inconsistent and more based on the enthusiasm of individual diplomats in the EU Delegation in Kyiv than of the EU as a whole. The governing institutions of the EU should follow the example of Ambassador Jan Tombinski and adopt mechanisms of influence on reforms in Ukraine.

4. WHAT ARE UKRAINE’S EXPECTATIONS FROM THE EU?

4.1. What do Ukrainian decision-makers want?

The political elite in Ukraine is interested in getting help, but because of the lack of clear coordination and monitoring of aid they often cannot figure out for what they can ask for and how the EU can help. Ukrainian officials mostly are not aware of the types of assistance available, to whom they can be addressed, under what conditions, and for which projects. The EU should better organize the process of informing the Ukrainian side about the possibilities by conducting, for example, appropriate introductory trainings. Government representatives said that the lack of a quality planning system for receiving assistance was a common problem among civil servants. Getting help from the EU requires a rigorous approach and knowledge of complex application and subsequent reporting procedures. The government should explore more properly the possibilities offered by the European Union. At the same time, Brussels is not required to provide support to Ukraine. However, Ukrainian authorities have drawn attention to another problem, which is in some cases the imposition of aid that may ultimately not have any impact on reforms in Ukraine. Thus, the government criticized multimillion-dollar EU loans to small and medium businesses and Ukrainian farmers. These loans are provided at high interest rates and therefore they are not highly appealing. This problem requires further analysis by the EU.

Most Ukrainian officials said they desired the following types/methods of EU assistance:

- Joint planning to ensure international technical assistance meet Ukraine’s real needs.

- More flexibility to reduce bureaucracy when obtaining assistance or to better inform on possible areas of support and explain the procedures to obtain the necessary technical assistance.

- Joint infrastructure projects to improve communication and people’s mobility through investment in railways and roads and development of the air transportation market.

- Joint control to involve Ukrainian experts in EU assessment missions to avoid communication problems while monitoring. Such joint control would help to eliminate mutual suspicions and misunderstanding related to Ukraine’s implementation of its obligations.

Debt revision through partial restructuring of the accumulated external debt to accelerate economic growth. This proposal was not among the dominant ones (perhaps because Ukraine has partially managed to obtain such restructuring). However, it is clear that the current level of restructuring might not be enough.

Ukraine needs a massive support plan – a sort of “Marshall Plan.” Ukrainian decision-makers believe that the current support programs are not strategic or comprehensive. They recognize that this is partly due to the lack of concrete results from reforms. But they say they do not believe the EU would provide the resources even if Ukraine were to be recognized as leader in reforms. For instance, the German ruling party CDU/CSU in their statement on September 30, 2015 said that Ukraine needed 100 billion euros for modernization.18 Obviously, this amount is not even remotely comparable to the 11 billion euros of EU assistance envisaged for the first five years after the revolution.

4.2. What do Ukrainian experts want?

Political pressure. Increasing EU political pressure on the Ukrainian authorities is one of the most common asks from Ukrainian experts. Civil society admits that alone they cannot force the necessary reforms. At the same time, the Ukrainian elite’s dependence (political and financial) on the EU encourages them to be responsive to EU pressure. NGOs hope that the EU will focus its leverage primarily on reform of the judiciary and prosecution system. Expectations for pressure intertwine with expectations for financial support, or “more for more.”

Increased financial support. Most experts recognize that without adequate financial support Ukraine will not be able to quickly implement the reforms agenda. The experts acknowledge that the current conditional approach should continue: there must be a clear linkage between future macroeconomic aid tranches, sectoral budget support, and results in key areas (anticorruption and judicial and law enforcement agency reforms). When providing financial support, the EU should introduce control over the spending of funds for reforms. Experts suggested an idea of organizing annual conferences of EU donors and Ukrainian NGOs to prioritize actions. Perhaps then the government will not complain that some projects are rather aimed at supporting so-called “guest performers” (see above).

Cooperation with civil society. NGOs hope that the EU will extend support to think tanks involved in the reform process. The civil sector can be involved not only in gathering information and promoting reforms, but also in implementation by creating joint advisory bodies under Ukrainian authorities. Establishment of NGO resource centers across the country could be an important step in strengthening democratic traditions in Ukraine. So far, Kyiv seems to be the favorite site for EU aid; initiatives in regional centers are lacking. That said, it seems the EU is increasingly focusing attention on the South and East of Ukraine. This policy should be continued.

Increased monitoring and control of implementation. Experts hope that qualitative and quantitative monitoring of the implementation of the Association Agreement will be introduced. The first step is creation of a basic reform strategy. For now, even representatives of the government admit that the existing strategic documents cannot be considered deep and well thought-out. Such a strategy could be used for providing EU aid that would meet Ukraine’s expectations. Representatives of the country’s non-governmental sector must participate in such audit.

Support for certain reforms. Experts hope that in the short term the EU will focus its assistance on the following areas: introduction of mechanisms to prevent and combat corruption, revelation of corrupt officials’ and elites’ foreign accounts, reform of state and local administration, and acceleration of decentralization. There are needs in adapting governance standards, deregulation and decentralization, but there are not enough resources and personnel for training in these areas right now. Some experts suggested providing financial support for the implementation of civil service reform, including partial initial financing of the salaries of those agencies that have undergone substantial restructuring.

In the context of specific support, civil society representatives stressed the need for EU assistance/recommendations to improve the investment climate in Ukraine, to assist the creation of small businesses, and to teach entrepreneurship. However, the EU should take into consideration some cautions from the government and examine cases where such aid has not brought about the desired results. Experts also talk about the importance of developing new programs to support electricity market, integration into ENTSO-E, and creation of a regional electricity markets association with the participation of Ukraine.

Programs to support young people. Representatives of the non-governmental sector drew attention to the need for large-scale and long-term support to young people in Ukraine, who became and will continue to be the main driver of changes in the country. It is long past time to include Ukrainian students in European exchange programs. Investment in education will not bring quick results, but it will ensure sustainable development and continuity of democratic traditions in the country.

4.3. What do average Ukrainians want?

Before Russia’s aggression in Ukraine, there was no vast majority of citizens who supported Ukraine’s European integration. The annexation of the Crimea and destabilization in the East of the country changed the situation dramatically: many Ukrainians became disillusioned with Russia. Ukraine’s European trajectory is uncontested.

Thus, currently 51% of Ukrainians support Ukraine’s accession to the EU, and 17% are for integration into the Eurasian Economic Union of Russia, Belarus and Kazakhstan. Three years ago (in 2012), a similar survey showed that 42% of citizens supported joining the EU and accession to the Customs Union was supported by 32% (The Fund “Democratic initiatives” and the Razumkov Centre) 19.

The population’s assessment of the progress of reforms remains predominantly negative. In the list of top priority reforms there are:

- The fight against corruption (65% of Ukrainians);

- The reform of law enforcement agencies and courts (58%);

- Pension and social security system reform (40%);

- Health care (36%);

- Defense sector (31%).20

Ukrainians also named corruption as an absolute evil in a survey conducted by the Institute of World Policy. Almost 85% of Ukrainians consider corruption to be the main obstacle to Ukraine’s integration into the EU. The second obstacle named is oligarchs (72.5%), and the third is insufficient economic development (57%). Both the Ukrainian government and the EU share a clear understanding of the priorities of Ukrainian society concerning reforms.21

The Institute of World Policy has unique data on the views of Ukrainians concerning EU assistance.22 In particular, we asked citizens two questions, with the second one scored on a ten-point scale:

1. What, in your opinion, should the EU do to accelerate reforms in Ukraine?

2. How do you evaluate EU assistance in reforming Ukraine on a scale from one to ten?

Ukrainians generally do not know how to evaluate EU assistance to reform in Ukraine. Perhaps this is due to the fact that citizens have generally a skeptical attitude to Ukrainian authorities’ achievements and therefore perceive EU assistance the same way. Thus, 5.04% of Ukrainians rated EU assistance the lowest (1 point); roughly the same number of respondents gave it 2 points. About 10% of Ukrainians rate EU efforts a 3 or 4. The middle to upper range from 5-8 points was given by almost the same amount of Ukrainians: 12.9%, 11.3%, 10.07% and 9%, respectively. Only 2.8% and 5% gave EU aid the top “nine” and “ten” respectively. The average score was 5.36 (it was calculated by adding up all the scores and dividing the total by the number of respondents).

Ukrainians, in general, do not expect money from the EU (financial assistance came in 11th on the list for the first question), but they do seek greater EU involvement in Ukrainian affairs. One-third of Ukrainians, more than any other position, said that the EU should put more pressure on Ukrainian authorities. Almost as many Ukrainians (26.93%) believe that the EU has already done a lot and it is time for the Ukrainian authorities to start acting. Third place went to a radical position (22.12% of Ukrainians, and 46% of respondents in northern regions): the EU should cease giving money because it gets stolen anyway.

Perhaps the Ukrainian government, rather than EU representatives, will find these results useful. The EU at a minimum should be aware how deep the citizens’ mistrust is, and that further deepening of this despair could threaten the stability of the region as a whole.

5. RESTRAINTS OF KEY ACTORS

5.1. What are the EU’s limitations?

On the one hand, the EU’s approach to neighboring countries is quite clear. It is the principle of “more for more:” if a country makes more progress in democratization, it can expect more support from the European community. On the other hand, if there is some progress in the neighboring countries, it is not thanks to this approach but primarily due to internal dynamics. In Ukraine this concerns above all the importance and activity of the civic sector, which actually makes the EU more determined regarding Ukrainian authorities’ compliance with the reformist course.

Interlocutors from European institutions often say in informal conversations that they do not want to interfere in Ukrainian processes, because ownership belongs to Ukrainians. Such arguments sound more like an excuse and unwillingness to take responsibility for changes in Ukraine. Indeed, in Central Europe the EU has never used the concept of “ownership” when introducing the policy of “conditionality.” In addition, some EU leaders still occasionally violate the supposedly strict rule of non-interference. However, it happens in a peculiar way: in such cases EU functionaries draw the attention of Ukrainian authorities to civil society’s remarks. This was the case when the authorities were unwilling to meet specific conditions in the visa dialogue with the EU (particularly, in the corruption fight area). Finally, EU Ambassador Jan Tombinski was forced to publicly draw the attention of the authorities to the “justified concerns of civil society.” After a call from European Commission President Jean-Claude Juncker the case eventually got off the ground: Ukrainian leaders became more cooperative with regard to taking NGOs’ proposals into account. EU functionaries should adopt this tactic, which has already proven its efficiency: applying pressure for reforms through close cooperation with civil society.

Among the other obvious factors restraining EU large-scale support to Ukraine there are:

- Internal EU problems (the Greek crisis, the refugee crisis, terror threat)

- Fear of Russia’s reaction

- Fatigue among ordinary EU citizens of member countries with ambitious foreign policy projects

- The unanimity of the EU concerning Ukraine has withstood already many ordeals, but nobody knows how long this situation will last. Business would like to see restoration of trade ties with Russia; marginalized groups of both right and left wings are gaining increasing public support in the EU and providing support to Russia’s aggressive foreign policy. All this may, eventually, adversely affect EU support for Ukraine.

- The EU lacks speed and flexibility in its decision-making: overall excessive bureaucracy slows reactiveness down. Furthermore some member countries, primarily in Southern Europe, do not understand the importance of the Ukrainian issue.

5.2. What are Ukraine’s limitations?

Ukraine’s main challenge is that it has to fight on two fronts at once: against Russia’s intervention and against the old system. Supporters of post-revolutionary Ukraine often repeat that you will hardly find a country that has had to restrain an aggressor and implement reforms at the same time. The main constraint and challenge for Ukraine today is time. The window of opportunity for Ukrainians has been open unprecedentedly long. However, it is already evident that the reserve of patience of ordinary Ukrainians and of Ukraine’s friends abroad is becoming exhausted. An International Republican Institute survey from September 2015 found that 83% of Ukrainians disagree with the current reforms movement, just as 83% of people do not agree with the activities of the Prime Minister of Ukraine, Arseniy Yatsenyuk, and 69% consider the actions of the President Petro Poroshenko to be erroneous.23

Ukrainian elites appear to not be ready for radical changes in the country. Old rules are being actually cemented: most reforms stop at the point of legislative approval. Behavioral models and management habits of the state apparatus in Ukraine are still largely based on a lack of initiative and indifference. Innovations in the field of anti-corruption have not produced notable results yet.

Ukrainian officials do not possess the necessary knowledge of the EU’s available assistance mechanisms. This contributes to the EU providing assistance without considering Ukraine’s real needs, which results in it seeming as if the European Union imposes its assistance without considering local realities. The authors of this document did experience cases where ministry staffs did not understand the value of EU assistance. Some staff saw EU programs as blatant profligacy, which should be a subject of further analysis for the EU. At the same time, the Ukrainian political and administrative elite is accustomed to pretend activities and successes in the style “Potemkin villages.” This behavior usually raises the question for European partners: “Why should we give funding for something that we do not see?”

5.3. What are the role and limitations of civil society

in influencing reforms in Ukraine?

After the Revolution of Dignity, a large number of volunteer and civil initiatives were formed in Ukraine to focus on influence and interaction with authorities (Reanimation Package of Reforms, Civic Platform “Nova Kraina,” and others). These initiatives include experienced and influential social activists, famous journalists, advocates, progressive judges, and politicians from different regions of the country. Such initiatives were the first on this scale in the 25 years of Ukraine’s independence and they strengthened the overall impact of civil society on the state. Over the past year and a half some public initiatives have been performing functions of a parallel public service. Ukrainian society has started to create from scratch an efficient state, one that would meet public aspirations. The world is watching in real time the process of nation-building and institutionalization in Ukraine.

It is worth noting that after the events on the Maidan many members of influential NGOs entered government positions. On the one hand, this strengthened the democratic reforms movement, but on the other, it partly weakened the non-governmental sector. However, according to the Civil Society Organization Sustainability Index, NGOs’ sustainability and capacity increased in 2014 compared with previous years.24 Many organizations, however, have outstanding common problems:

A lack of high-quality analysis of public policy and consequences of draft decisions. Civil society’s active involvement of advocacy initiatives in the legislative process has not improved the qualityof law-making, because very often certain decisions lead to unintended consequences even for civil society organizations themselves.

Poor communication with the society. Events on the Maidan have lead to civil activists being more visible in the media, but this is not enough to ensure high-quality communication campaigns on reforms implementation. Meanwhile, Ukrainian NGOs are much more liberal in regard to values than Ukraine’s society in general: the discussion on amendments to the Labor Code and the rights of sexual minorities is one of the manifestations of this.

Problems of interaction in regions. Only recently, with the support of international donors, organizations have begun to implement projects in the East and South of the country and develop regional organizations. However, even major initiatives have very weak contact with regional organizations and few organizations have a regional network or a sufficient number of contacts in regions.

Public initiatives are not yet strong enough to completely remake the political field. The state apparatus is still strong enough to resist demands from outside. Reasonable assistance from the European Union can help reform-minded civil society win against the amorphous and unenthusiastic state apparatus.

6. RECOMMENDATION

1. Closer cooperation with civil society. The EU should strengthen the institutional and professional capacity of the most active non-governmental organizations that contribute to reforms in the country. Cooperation between the EU and the non-governmental sector is one of the most important drivers for large-scale change in the country.

2. Higher degree of conditionality. Financial support should come along with rigid control over compliance with obligations, and should involve civil society organizations in that process.

3. Higher flexibility and responsiveness. The EU cannot demand rapid changes in Ukraine while remaining inflexible.

4. Better coordination. The EU, Ukrainian authorities, and civil society should work more closely together to better define Ukraine’s needs for reforms and provide appropriate assistance.

5. Higher engagement. In spite of the common perception that Ukrainians only seek money from the European Union, the polling here has shown the opposite: citizens of Ukraine expect political engagement rather than financial support.

6. More strategic thinking. The EU must change its approach from crisis management to strategy. The idea of developing a major support program for Ukraine (a “Marshall Plan”) is still relevant, to go along with a clear blueprint for reforms developed jointly by Ukraine and the EU.

7. Bigger ambitions. Giving Ukraine a clear European perspective would be a strong political signal of support and the most appropriate response to Russia’s actions against Ukraine.

This project is implemented under Ukraine National Initiatives to Enhance Reforms (UNITER) program, which is funded by the United States Agency for International Development (USAID) and implemented by Pact Inc. IWP also expresses its gratitude to International Renaissance Foundation (IRF), Think Tank Fund (TTF), and Embassy of Sweden in Ukraine (SIDA) for conducting the research.

Foreign Policy Forum
On 21st of December, on the eve of the Day of Diplomatic Service of Ukraine, IWP will hold the Foreign Policy Forum, summing up “Audit of Ukraine’s Foreign Policy ” project.
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