At the EU/Ukraine Business Summit in Brussels on Thursday 10 April, the European Commissioner for Enlargement, Marta Kos, and the Ukrainian Prime Minister, Denys Shmyhal, launched a new EU/Ukraine Business Partnership, “a high-level platform to mobilise the private sector and align EU capital, innovation and expertise with Ukraine’s long-term needs”, according to Ms Kos.
The two parties have decided to step up their efforts in three areas. Firstly, in the implementation of reforms to the business environment in Ukraine. “We are determined to also accelerate sectoral integration of Ukraine into the EU Single Market, particularly through mechanisms under the Deep and Comprehensive Free Trade Area (DCFTA)”, stress the EU and Ukraine in a joint declaration.
In addition, Europeans and Ukrainians underscore the need to maximise the potential of the ‘Ukraine Investment Framework’ (UIF), as part of the ‘Ukraine Facility’ “aiming to de-risk private investments, unlock private equity, and encourage foreign direct investment in Ukraine’s recovery and reconstruction”. The €9.3 billion UIF is expected to unlock at least €40 billion of public and private investment over the next three years. “By leveraging financial instruments such as guarantees and blended finance, we will incentivise private sector involvement in Ukraine’s recovery, reconstruction and modernisation”, the two parties promise. According to the latest figures, at least €500 billion will be needed to rebuild Ukraine.
Finally, Europeans and Ukrainians want to promote Ukraine as “a thriving investment destination for investments in strategic sectors, including particularly in the area of defence”, but also energy – Ukraine will be fully integrated into the European electricity market by 2027 – and green infrastructure.
At a press conference, Ms Kos and the Ukrainian Minister for European Integration, Olha Stefanishyna, stressed the importance of Ukraine’s integration into the EU economy. “Ukraine is gradually integrating into the Single Market. Energy, digital, transport, industrial standards: the trajectory is clear”, emphasised Mrs Kos.
Transport. On the same day, the European Commission announced the extension of the road transport agreement until 31 December 2025 “in order to facilitate Ukraine’s access to world markets by allowing smoother transit through EU countries and strengthening trade links with the EU market”. This agreement was put in place on 29 June 2022 and extended in June 2024. Since its entry into force, according to the Commission, EU road imports from Ukraine have increased by 42% in volume and 28% in value. EU exports to Ukraine increased by 37% in volume and 50% in value.
Trade. But the full integration of Ukraine into the EU’s internal market still raises questions. The European Commission has yet to publish its proposal for deciding the fate of Ukrainian exports to the EU after 5 June. The autonomous trade measures (ATMs) that liberalise trade expire after this date. In the absence of a solution, certain Ukrainian agricultural products will once again be subject to tariff quotas and customs duties at European borders, as provided for in the DCFTA.
Last year, the European Commission promised not to extend the autonomous trade measures, but rather to propose a solution under the DCFTA for the period after June 2025. The aim is to show support for Kyiv by opening up the European market a little more, without upsetting Member States that fear an influx of Ukrainian agricultural products.
With less than two months to go before the deadline, Ukraine is concerned that such a proposal has not yet been published. “It’s very clear that liberalisation should continue, because the war is still on, our ports are still occupied and the aggression continues. So nothing has changed since the original decision was taken [ATMs in 2022, editor’s note], and what’s more, Ukraine will become a Member State. So backing away from liberalisation is not consistent with the accession process”, said Olha Stefanishyna.
Like her Prime Minister the day before, Ms Stefanishyna sought to reassure about the future joint Ukraine/United States investment fund. “I am not in a position to reveal the details, but I think I can confirm that nothing in the agreement can be negotiated in a way that would undermine Ukraine’s existing obligations, including its financial obligations under the ‘Ukraine Facility’ and macro-financial assistance”, she promised, adding that technical discussions would be held this Friday in Washington. (Original version in French by Camille-Cerise Gessant and Léa Marchal)