Combating corruption in Ukraine – the beginning of a long march. OSW COMMENTARY Number 170, 06.05.2015

From a public opinion point of view, corruption has been the gravest problem of today’s Ukraine, excepting the armed conflict in the east of the country. The government might be able to delay certain key reforms such as the constitutional reform or the reform of local government structures, however, without stepping up measures to combat corruption they would face the risk of losing social support which has already been weak. There is no single strategy for combating corruption in Ukraine. What has been implemented is a series of often contradictory concepts and actions (initiated by the president’s office, the government, civil society institutions, or launched to meet the requirements of donors). The successes of the new government have included efforts aimed at fighting corruption at the middle level of government and the introduction of legislative changes in compliance with international practice. The main weaknesses, on the other hand, have been the lack of efficient mechanisms to implement the adopted legislation to ensure that an individual charged with corruption (regardless of political connections) could be effectively tried and the money received as bribery could be returned to the state. Similarly, the judiciary system has not been prepared to actively handle corruption cases.

The harsh reality of Ukraine's fiscal arithmetic. Bruegel Policy Contribution ISSUE 2015/07, June 2015

Ukraine is struggling with both external aggression and the dramatically poor shape of its economy. The pace of political and institutional change has so far been too slow to prevent the deepening of the fiscal and balance-of-payments crises, while business confidence continues to be undermined. • Unfortunately, the 2015 International Monetary Fund Extended Fund Facility programme repeats many weaknesses of the 2014 IMF Stand-by Arrangement: slow pace of fiscal adjustment especially in the two key areas of energy prices and pension entitlements, lack of a comprehensive structural and institutional reform vision, and insufficient external financing to close the expected balance-of-payments gap and allow Ukraine to return to debt sustainability in the long term. • The reform process in Ukraine must be accelerated and better managed. A frontloaded fiscal adjustment is necessary to stabilise public finances and the balance-of-payments, and to bring inflation down. The international community, especially the European Union, should offer sufficient financial aid backed by strong conditionality, technical assistance and support to Ukraine’s independence and territorial integrity.

Ukraine on the financial front – the problem of Ukraine’s foreign public debt. OSW COMMENTARY NUMBER 178|05.08.2015

One of the key challenges that Ukraine is facing is the scale of its foreign debt (both public and private). As of 1st April it stood at US$ 126 billion, which is 109.8% of the country’s GDP. Approximately 45% of these financial obligations are short-term, meaning that they must be paid off within a year. Although the value of the debt has fallen by nearly US$ 10 billion since the end of 2014 (due to the private sector paying a part of the liabilities), the debt to GDP ratio has increased due to the recession and the depreciation of the hryvnia. The value of Ukraine’s foreign public debt is also on the rise (including state guarantees); since the beginning of 2015 it has risen from US$ 37.6 billion to US$ 43.6 billion. Ukraine does not currently have the resources to pay off its debt. In this situation a debt restructuring is necessary and this is one of the top priorities for the Ukrainian government as well as for the International Monetary Fund (IMF) and its assistance programme. Without this it will be much more difficult for Ukraine to overcome the economic crisis.

Reform #1. Why Ukraine has to reform its gas sector. OSW COMMENTARY NUMBER 181/01.09.2015

In April 2015, the Ukrainian parliament passed a long-awaited law on the gas sector which paves the way for the extremely difficult process of reforming and de-monopolising the Ukrainian gas sector. The law will come into force on 1 October 2015 and involves the break-up of the state-owned company Naftogaz, the current monopolist, and the gradual creation of a competitive gas market in line with the so-called Third Energy Package. At the same time, a threefold increase in the price of gas paid by individual customers and the public sector was introduced. The price had been subsidised for years and no previous government had ever decided to raise it.

The Ukraine crisis and the demise of the European Security order. EPC Policy Brief, 1 December 2015

The annexation of Crimea by Russia and the subsequent war in the Donbas have delivered a severe blow to the European security order, and have increased tensions between the West and Russia to a level unprecedented since the end of the Cold War. In this context, it would be difficult to start negotiating a new commitment to the principles of the European security order. In this Policy Brief, Paul Ivan analyses the Ukraine crisis and its effect on European security and calls for the EU and NATO to stand firm on their own principles, but also to engage carefully with Russia to develop mechanisms to contain risks and avoid escalation and military confrontation, whether in Syria, the Baltic, the Mediterranean or the Black seas. The recent shooting down of a Russian jet by Turkish forces makes clear the need to prevent such incidents with potential rapid escalatory dynamics.

The bumpy road. Difficult reform process in Ukraine. OSW Commentary, Number 192|30.11.2015

The post-Maidan Ukrainian government found itself forced to launch a comprehensive state reform process due to both the deep crisis in all the key areas of the state’s operation and the enormous demand for change among the Ukrainian public. The promise to carry out structural reforms based on the European model became a key point in Kyiv’s political rhetoric. However, one year after the formation of the second cabinet led by Arseniy Yatsenyuk (2 December 2014) and one and a half years since the inauguration of Petro Poroshenko as president (7 June 2014), it is clear that the reform process in Ukraine is moving at a snail’s pace and is far from fulfilling its post-Maidan declarations. It has also provoked increasing frustration among the public due to the lack of expected effects.

A challenge for liberal democracy: How to understand the Russian intervention in Ukraine. Bertelsmann Policy Brief, 16.10.2014

The Russian intervention in Ukraine has provoked a deep crisis which will likely last for years, with profound consequences not only for Ukraine, Russia and Eastern Europe, but also for the internal situation in the European Union. The current Russian aggression is frequently seen as a profound violation of international law, breaking the rules that are fundamental for relations in Europe. It is perceived as perhaps a step towards rebuilding imperial Russia or, at the very least, an attempt to keep Ukraine within Russia’s sphere of influence. However, one very important aspect is virtually neglected, namely, that Russia’s Ukraine venture may have a significant impact on the future of liberal democracy in Europe and beyond.

The Dutch Referendum on the EU-Ukraine Association Agreement: Legal options for navigating a tricky and awkward situation. CEPS Commentary, 8 April 2016

In an advisory referendum held in the Netherlands on April 6th, over 61% of the voters rejected the ratification of the Association Agreement (AA) between the EU and Ukraine. If the Dutch government were to act on the outcome of the referendum, which had a low turnout of 32%, an unprecedented situation would emerge in which an EU international agreement cannot enter into force because a member state is not in a position to ratify it. Although the political character of this referendum and the Dutch Advisory Referendum Act (DRA) and the geopolitical implications of the AA itself have already been the subject of heated discussions in the Netherlands and beyond, the legal implications of this referendum remain unclear.

The shadow of Chornobyl. Ukraine thirty years after the disaster. OSW COMMENTARY NUMBER 210/22.04.2016

Thirty years after the Chornobyl nuclear power plant disaster, its aftermath and consequences are still a permanent element of the economic, environmental and social situation of Ukraine, Belarus and some regions of Russia. Ukraine, to which the scope of this text is limited, experienced the most severe shock because, among other factors, the plant where the accident took place was located just 100 km away from Kyiv. Its consequences have affected the course of political developments in the country, and have become part of the newly-shaped national identity of independent Ukraine. The country bore the huge cost of the clean-up effort but did not give up on nuclear energy, and today nuclear power plants generate more than half of its electricity. The system of social benefits for people recognised as disaster survivors, which was put in place by the Soviet government, has become a huge burden on the country’s budget; if implemented fully, it would account for more than 10% of total public spending, and is therefore being implemented to only a partial extent. This system has reinforced the Ukrainian people’s sense of helplessness and dependence on the state. The disaster has also become part of the ‘victim nation’ blueprint of the Ukrainian national myth, which it has further solidified. The technological and environmental consequences of the disaster, and hence also its economic costs, will persist for centuries, while the social consequences will dissipate as the affected generation passes away. In any case, Chornobyl will remain an important part of the life of the Ukrainian state and society.

Information Guide: Ukraine

A guide to information sources on Ukraine, with hyperlinks to information within European Sources Online and on external websites.

Ukraine, Russia and the EU. Breaking the deadlock in the Minsk process. CEPS Working Document No. 423 / June 2016

Although the Minsk process brought about a de-escalation of the conflict in Eastern Ukraine, not all of its 13 points have been implemented, including a ceasefire and withdrawal of heavy weaponry. In the absence of a military option, economic sanctions have become the core instrument of the EU and the US, to respond to Russia’s aggression. At the end of June 2016, when EU Heads of State and Government meet to discuss the extension of sanctions against Russia, they should bear in mind that Russia did not implement the commitments it took upon itself in the framework of the Minsk agreements. Given the persistent deadlock in the Ukraine crisis, the leaders of the EU ought to agree to prolong the sanctions against Russia, push for the renegotiation of the Minsk II agreement and widen the ‘Normandy format’ to include the US and bolster reforms in Ukraine.

The EU's External Action towards the Middle East: Resolution required. CEPS Commentary, 7 January 2012

Among the many foreign policy challenges the EU will have to address this year, such as cultivating workable ties with Ukraine, Russia and other neighbours in the east, reviving the transatlantic partnership in trade, rebalancing alliances with Asian countries, and pooling and sharing defence capabilities, the number one challenge that will take up most of the Foreign Affairs Council’s time is the Middle East. After months of half-baked unilateral attempts at resolving the foreign policy challenges posed by this troubled region, the moment has now come for the EU to take bold and concrete action, argues CEPS Senior Fellow Steven Blockmans in this new Commentary.