Ukraine’s EU membership candidacy would be a powerful signal for business

25/ 05/ 2022

That collective business opinion was addressed to Matti Maasikas by Anna Derevyanko, the Executive Director of the European Business Association. On 24 May, the EBA member companies met with the Head of the European Union Delegation to Ukraine - Ambassador of the EU to Ukraine Matti Maasikas to discuss EU-Ukraine cooperation in political, diplomatic, and military areas, as well as Ukraines prospects for candidate status and further path to EU membership. Mr. Maasikas noted that over the past three months, Ukraine and the EU had strengthened incredibly their connection. Without exaggeration to say, it has reached a new level. The EU has recently announced a new tranche of 1.5 billion euros in military aid for Ukraine, bringing the total to 2 billion euros. According to Mr. Maasikas, the EU is doing everything it can to help Ukraine win this war. According to the most modest estimates, the war-induced losses amount to 500-600 billion euros for the Ukrainian economy, while the damage to infrastructure has already been set at 100 billion euros and, unfortunately, this number is growing daily. The government is reporting about $ 5 billion in budget deficits, tax revenues have halved, Ukrainian ports on the Black Sea remain blocked, and millions of people have left Ukraine or their region of residence, all of which are colossal challenges posed by the war. The international community is actively discussing the solutions to unblock the Black Sea ports of Ukraine, including the UN and other partners. Alternative ways to export agricultural products cannot compensate for ports, so a solution needs to be found promptly to help Ukraine unblock exports and prevent soaring world food prices. So now, the financial and economic support of the partners is more necessary than ever. We are grateful to the European Union for providing € 1.2 billion in macro-financial assistance (loans) and € 1.5 million in humanitarian aid. The EU has also proposed additional macro-financial assistance of around 9 billion euros which would ideally reach Ukraine in 2022. Besides, the G7 countries have agreed to transfer about $ 18 billion in financial assistance to Ukraine. In recent weeks, the European Investment Bank has provided 668 million euros to support Ukraine, as well as opened credit lines for business. Also, there are another 120 million euros in grants and 330 million euros in programs for assistance to internally displaced persons. We are convinced that the allocated funds will help many companies stay afloat during these challenging times. Apart from financial support, the European Commission has taken an unprecedented step in liberalizing trade with Ukraine by abolishing all tariffs and quotas on access to the EU market. It is expected that Ukrainian producers and exporters will be able to take advantage of this opportunity in the summer. Significant liberalization has also taken place for auto transport. Before the war, there was always a lack of permits for road transportation through and to EU countries. However, now this problem has been resolved at the EU level. With a view to the post-war period, the European Commission has already announced a recovery program for Ukraine worth hundreds of billions of euros. Mr. Maasikas expressed hope that despite the significant destruction, the post-war reconstruction will be a big step forward towards a more modern and sustainable Ukraine. Now is undoubtedly a historic moment for Ukraine as it fights for its chosen democratic pro-Western development course. In the first days of the full-scale war, Ukraine took an important step in this direction – it applied for EU membership. However, Mr. Maasikas assesses the prospects of accelerated EU accession with caution, given the large amount of work that Ukraine still has to do to unify standards across areas and integrate into the single market. But surely, Ukraine deserves to hear a clear message from the EU in June on the membership prospects and to develop a roadmap for the membership. In turn, Anna Derevyanko noted that granting Ukraine the candidate status for EU membership and outlining its prospects for eurointegration would be a very strong positive signal for business and Ukrainian citizens who have shown great courage, resilience, and motivation by working, helping, and defending borders of sovereign Ukraine. We also sincerely thank the EU Delegation to Ukraine, personally the Ambassador and his team, as well as all the European institutions for their unprecedented support for Ukraine and cooperation for a better future.

Mr. Maasikas noted that over the past three months, Ukraine and the EU had strengthened incredibly their connection. Without exaggeration to say, it has reached a new level. The EU has recently announced a new tranche of 1.5 billion euros in military aid for Ukraine, bringing the total to 2 billion euros. According to Mr. Maasikas, the EU is doing everything it can to help Ukraine win this war.

According to the most modest estimates, the war-induced losses amount to 500-600 billion euros for the Ukrainian economy, while the damage to infrastructure has already been set at 100 billion euros and, unfortunately, this number is growing daily. The government is reporting about $ 5 billion in budget deficits, tax revenues have halved, Ukrainian ports on the Black Sea remain blocked, and millions of people have left Ukraine or their region of residence, all of which are colossal challenges posed by the war.

The international community is actively discussing the solutions to unblock the Black Sea ports of Ukraine, including the UN and other partners. Alternative ways to export agricultural products cannot compensate for ports, so a solution needs to be found promptly to help Ukraine unblock exports and prevent soaring world food prices.

So now, the financial and economic support of the partners is more necessary than ever. We are grateful to the European Union for providing € 1.2 billion in macro-financial assistance (loans) and € 1.5 million in humanitarian aid. The EU has also proposed additional macro-financial assistance of around 9 billion euros which would ideally reach Ukraine in 2022. Besides, the G7 countries have agreed to transfer about $ 18 billion in financial assistance to Ukraine.

In recent weeks, the European Investment Bank has provided 668 million euros to support Ukraine, as well as opened credit lines for business. Also, there are another 120 million euros in grants and 330 million euros in programs for assistance to internally displaced persons. We are convinced that the allocated funds will help many companies stay afloat during these challenging times.

Apart from financial support, the European Commission has taken an unprecedented step in liberalizing trade with Ukraine by abolishing all tariffs and quotas on access to the EU market. It is expected that Ukrainian producers and exporters will be able to take advantage of this opportunity in the summer. Significant liberalization has also taken place for auto transport. Before the war, there was always a lack of permits for road transportation through and to EU countries. However, now this problem has been resolved at the EU level. With a view to the post-war period, the European Commission has already announced a recovery program for Ukraine worth hundreds of billions of euros. Mr. Maasikas expressed hope that despite the significant destruction, the post-war reconstruction will be a big step forward towards a more modern and sustainable Ukraine.

Now is undoubtedly a historic moment for Ukraine as it fights for its chosen democratic pro-Western development course. In the first days of the full-scale war, Ukraine took an important step in this direction – it applied for EU membership. However, Mr. Maasikas assesses the prospects of accelerated EU accession with caution, given the large amount of work that Ukraine still has to do to unify standards across areas and integrate into the single market. But surely, Ukraine deserves to hear a clear message from the EU in June on the membership prospects and to develop a roadmap for the membership.

In turn, Anna Derevyanko noted that granting Ukraine the candidate status for EU membership and outlining its prospects for eurointegration would be a very strong positive signal for business and Ukrainian citizens who have shown great courage, resilience, and motivation by working, helping, and defending borders of sovereign Ukraine. We also sincerely thank the EU Delegation to Ukraine, personally the Ambassador and his team, as well as all the European institutions for their unprecedented support for Ukraine and cooperation for a better future.