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3

What’s the EU

Chapter І.

1. The EU's Relations with Ukraine

1.1 The Partnership and Co-operation Agreement

The PCA came into force in March 19981. It highlights respect for shared fundamental values as an essential element for the relationship; provides an appropriate framework for political dialogue; sets the principal common objectives in terms of harmonious economic relations, sustainable development, co-operation in a number of areas, and support to Ukraine’s efforts towards democracy; as well as creating an institutional framework for pursuing these goals.

The PCA is an important instrument in bringing Ukraine in line with the legal framework of the single European market and of the WTO system. It also contains a number of evolutionary clauses, including the prospect of establishing a free trade area.

1.2 The EU Common Strategy on Ukraine, and Ukraine’s Strategy for European Integration

The EU Common Strategy was adopted in December 1999 at the Helsinki European Council in response to the recognition that more coherence was needed between the EU and the Member States’ policies certain partner countries. It covers a period of four years.

The Strategy aims at developing a strategic partnership between the EU and Ukraine on the basis of the PCA, while acknowledging Ukraine’s European aspirations and welcoming the country’s European choice. It sets three principal objectives:

• To support the democratic and economic transition process in Ukraine
• To meet common challenges on the European continent (stability and security in Europe, environment protection, energy and nuclear safety)
• To strengthen co-operation between the EU and Ukraine in the context of enlargement; assist Ukraine’s integration into the European and world economy; enhance co-operation in the field of Justice and Home Affairs.

1.3 EU Assistance to Ukraine

The EU is the largest donor to Ukraine; over the last 10 years, total assistance amounted to €1.072 billion from the EC while the Member States disbursed around €157 million in the period 1996 – 1999. This consists of technical assistance through TACIS, macro-financial assistance, and humanitarian assistance.

The overall amount allocated directly to Ukraine in 2002 is €47 and in 2003 €48 million. In addition, Ukraine benefited from a number of specific and regional Tacis programmes, totalling some €126 million that year. The National Indicative Programme for the years 2004−06 foresees 212 million Euro on further assistance.

With the closure of Chernobyl at the end of 2000 and pending alternative sources coming fully on stream, EU assistance in the energy sector has included additional support for Ukrainian fuel imports (Fuel Gap programme), along with a major contribution to the Chernobyl Shelter Fund managed by the EBRD.

Since 1998, the Commission has also contributed about €10 million to the Science and Technology Centre of Ukraine (STCU).

1.4 The Institutional Framework

The PCA establishes a number of bilateral institutions and provides the basis for taking further decisions as necessary:

Co-operation Council at ministerial level (EU-Presidency, European Commission, High Representative, Government of Ukraine)

Co-operation Committee (senior civil servants level, chaired alternately by the European Commission and the Ukrainian side)

Sub-Committees (experts level; supporting the work of the Co-operation Committee).

The political dialogue is conducted through yearly Summits, at the Co-operation Councils, and in Ministerial and Political Directors’ meetings in the Troika format.

The last summit (6th) Summit was held on 7 October 2003 in Yalta. The EU side presented its "Wider Europe - Neighbourhood" initiative, stressing the broad range of new opportunities, which should facilitate Ukraine's progressive participation in the EU’s internal market and in EU policies and programmes, taking into account Ukraine’s strategic goals and priorities. The EU side has made clear that this initiative is separate from the question of possible future accession to the EU, regulated by article 49 of the Treaty on European Union. President Kuchma reiterated Ukraine’s long-term strategic goal is to be fully integrated into the EU. The Summit leaders agreed to launch consultations on the development of a Wider Europe Action Plan for Ukraine. In addition, the Summit agreed that specific attention in future dialogue should be given to the effects of the forthcoming EU enlargement for EU-Ukraine relations. Both sides reiterated their strong determination of both sides to avoid any new dividing lines in Europe.

2. Highlights of the bilateral agenda

2.1 Priority Areas

Both sides co-operate closely on the specific priorities endorsed by the 4th Co-operation Council, i.e.: approximation of Ukraine’s legislation with that of the EU, energy, trade, Justice and Home Affairs, environmental protection, transport and science, and technology. Investment and cross-border co-operation were added as priority areas at the Fifth Co-operation Council.

Legislative approximation is, in accordance with the objectives of the PCA, a permanent feature of bilateral discussions. From the Ukraine perspective, it is also tied to its European integration strategy. The Tacis-financed, Kyiv based, Ukraine-Europe Policy and Legal Advice Centre, which has provided a source of expertise on a range of policy issues for several years, is now focused on this field.

Energy and nuclear safety is one of the most important areas of EU’s co-operation with Ukraine. Measures taken in the aftermath of the Chernobyl disaster continue to be a priority, ranging from the financing of the intended shelter for the nuclear reactor (for the ‘Shelter Fund’ managed by the EBRD a total amount of € 100 million has been decided for 2001 to 2004), over replacement production capacity in new nuclear power stations (‘K2R4’), to dealing with shortcomings in energy supply (the ‘fuel gap’ programme).