In a report published on Wednesday 7 December, the European Court of Auditors (ECA) stated that the European Union's financial aid to Ukraine over the 2007-2015 period had had limited impact. Despite new momentum since the reforms, the results obtained thus far remain fragile, the ECA says.
The court focused on three areas: the management of public finances, the fight against corruption, and the gas sector (important for the security of EU supply).
On the whole, the EU's aid was partly effective in transforming Ukraine into a well-governed state in these three areas, the court says, believing that the instability of the country's political, legislative and administrative context limited the effectiveness of European aid during most of the 2007-2015 period. While EU-Ukraine cooperation made progress following the Maidan Square events in 2014, the difficulties the country is facing continue to weigh heavily on the reform process, and the risks posed by the old and new oligarchs remain high, the ECA adds.
Between 2007 and 2015, the EU's financial aid comprised subsidies of a maximum of €1.6 billion, half of which were granted as budgetary support, and macro financial aid of a total of €3.4 billion. Szabolcs Fazakas, who was in charge of the ECA report, regretted that European funding was provided as financial support to the budget because such a procedure does not allow control over the use of the funding once the transfer has been made. Furthermore, while the EU responded promptly to the 2014 crisis by mobilising €11.2 billion, it granted and paid considerable sums of funding quickly without establishing a strategy beforehand, the court states.
In its report, the ECA says that the dialogue between the EU and Ukraine on fighting corruption has improved considerably since 2011. However, the results of the anti-corruption measures are not yet visible, according to the court.
Dialogue on the management of public finances has much improved since 2013. The ECA believes that the shortcomings in establishing the conditions for assistance affected the design of the budgetary support and financial aid. However, monitoring the implementation of the aid proved very effective and the suspension of payments under the budgetary support enabled priorities in the management of public finances to be promoted from 2011 to 2013.
In the gas domain, the ECA says that the dialogue has suffered from Ukraine's shilly-shallying and from differences in view between the different parties concerned within the EU. The European aid included vague arrangements in its design, that were difficult to understand, according to the court, which adds that the quality data needed for monitoring the aid were lacking until 2014. Until the start of 2015, European aid did not enable any major progress in the Ukrainian gas sector, the ECA states, but some important steps forward have been made since then, it adds.
In the court's view, the European Commission and European External Action Service (EEAS) should give greater importance to the management of public finances in dialogue with Kiev so as to improve the effectiveness of EU aid for Ukraine. They should also improve the formulation of the conditions for financial aid and its payment. In addition, they should strengthen the monitoring of how the aid is implemented, the ECA adds. The Commission and EEAS should also grant greater importance to the effective implementation of the reforms and their sustainability, and they should take measures to make aid in the gas domain more effective, ECA concludes. (Original version in French by Camille-Cerise Gessant)