The Future of EU-Ukraine Relations: Speech by PM of Ukraine Mykola Azarov

Chairman, Members of the European Parliament, Excellencies and ladies and gentlemen,

I would like to express my gratitude to the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament and to the Kyiv Centre for International and Comparative Studies for the opportunity to address this distinguished and esteemed audience.
Just prior to the opening of the conference Mr. Martin Schulz and I signed the memorandum of co-operation between the Party of Regions of Ukraine and the Group of Socialists and Democrats in the European Parliament

The relationships between the two political forces that we represent are those of partnership and co-operation. The memorandum, without doubt, shows the significantly enhanced European dimension of policy in my party which is the leading political force in Ukraine, as well as in the policy of the Ukrainian government in general.
The memorandum marks the end of a rather long period in the Ukrainian history when our political opponents did their best to create the image of the Party of Regions as an anti-democratic, anti-European political force in hope it would be rejected by the rest of Europe. They worked hard at that, and there are still those who believe these misrepresentations.

But that is behind us. Today we have turned a new page in Ukrainian-European relationship.

Let me ask a direct question: did the Party of the Regions have a vision of Europe that guided it when it took part in this year’s democratic elections and when it formed the new government?

Some believe that our only motive was to serve the interests of our electorate, as well as of the political and business community of the eastern regions of Ukraine situated along our border with Russia.

We are certainly acting on to the mandate of our voters. But we did get support all over Ukraine - in the east and in the west, in the south and in the north. This support was greater in some regions than in others, but people supported us across the country.

That is why I will give you a totally different answer. I expect some are going to find this answer rather surprising in view of the stereotypes about people who come from the Donbass area and speak Russian – the language I am addressing you in.

My answer is – we see our goal first and foremost in creating a truly European order in Ukraine, in creating the European spirit – the goal that our opponents liked so much to speak about and did nothing to achieve.

Let me explain our vision in greater detail.

First, in order to start implementing the policy of “transformation towards Europe” we had to win the democratic elections in a dignified, truly European manner. Our candidate Viktor Yanukovich did that. And let me emphasize a very important fact – it was not a victory in a so called “third round” conducted due to a court order. It was a victory in elections conducted in full compliance with Ukrainian legislation and with European standards. This fact is confirmed by multiple election observer missions, that of OSCE among them

Secondly. Having won the country’s leadership in a transparent, democratic and European manner it is absolutely in our best interests, never mind any other party, to consolidate that approach.

This approach is now facing a further test: the local elections to be held on October 31st this year. These elections should and will be conducted as free, democratic, dignified European-like elections. As the head of the leading party, I personally invited European institutions to take part in missions observing the pre-election period and the elections themselves. Speaking to you here on the ground of the European Parliament, I am inviting all of you as well: visit Ukraine and see with your own eyes what is going on in our country. You will find the situation as I have just described it.

Third. We all know that transparent electoral procedures are necessary but not sufficient for a European-type democracy to function. To function, a European-type democracy needs to be efficient. This kind of efficiency can be achieved through the president, the government and the parliament majority working together, in harmony. We have succeeded in establishing this kind of cooperation in Ukraine - this is a real achievement.

Let me assure you: as long we are in office, the rest of Europe is not going to witness unsightly situations like those that took place in Ukraine not long ago, when the president could officially instruct the foreign minister and Ukrainian diplomatic missions abroad to launch a campaign traducing the acting prime-minister. I am sure such embarrassing events will never happen again as long as we are in government.

I am happy to say that the Group of Socialists and Democrats in the European Parliament has promised to support us in pursuing the goal of strengthening society, of overcoming the divisions that had formed in the past years. Let me repeat that the memorandum we have signed today says that our European friends will support “the endeavour by the Party of Regions to overcome the current partisan and political divisions and to establish a climate of democratic consolidation in Ukraine”.

Fourth. It is characteristic of the European democratic model that a political force that has won leadership as a result of democratic elections focuses effort and resources towards reforms aimed at a vibrant, dynamic advancement of the society. If this policy is not followed, parties once leading rapidly slip into political oblivion. This slide is what is happening now with the parties of the “orange” political sector in Ukraine.

Naturally, we are not ready to follow them into their unfortunate fate. This is not the choice we make. That is why, from our very first days in office, we took upon ourselves the difficult task of launching sometimes uncomfortable reforms aimed at bringing Ukraine close to the European standards.

I am not going now to elaborate on the purely economic reforms. We have described all the reform process in great detail in the agreement we signed with the International Monetary Fund. This important institution, by the way, had declined any cooperation with the previous Ukrainian leadership, has renewed support and credits for Ukraine. This demonstrates the IMF’s faith in the new Ukrainian leadership, a leadership that is not just good not at writing attractive plans on paper, but also at keeping promises. The IMF experts are sure: our leadership team will not use a cent of the money they lend on anything else but the realization of deep structural reforms.

Recently we have been discussing a truly revolutionary new tax code. In this regard, let me give you just one but one very important fact – during all the nineteen years of Ukraine’s independence there had not been a single political force that had enough political will to present and adopt a document that significant.
I also would like to mention that we adopted the law "on the basic principles of the functions of the natural gas market", a law fully in compliance with EU norms and standards. Adopting this law made it possible for Ukraine to join the Energy Charter treaty.

I would like to say a few words about our social reforms. Our team has taken up the challenge of eradicating the greatest evil, the main obstacle on the way to Ukraine’s Europeazation - the evil of corruption.

We started with the reform of our judicial system which, in the unanimous view of both Ukrainian and European experts, is the sphere that is most heavily affected by the canker of corruption.

Last July we adopted a law on the judiciary and the status of judges that is essentially European. The process of improving the health of the judicial system started almost immediately. Law-enforcement structures got to work efficiently, and during the past few months more top officials faced charges of theft and corruption than had been the case during the whole 5-year period of the previous government.

We have considerably expedited the process of the judicial reform. The President formed the relevant working group in August. The group has been efficiently working on a new version of the criminal code of Ukraine and a new law on the public prosecutor's office, the work being guided by the recommendations of the GRECO group of the Council of Europe. We have also been working hard on the development of the newly proposed package of anti-corruption bills, the main focus being made at working out the mechanisms for effectively enforcing those laws since these mechanisms had been very not clearly formulated in the previous versions of the bills.

Fifth. European democracy is the democracy of the middle class, of the sector of population with an economic stake in society. Poverty is the main enemy of democracy, since it provokes the emergence of dictatorships and authoritarian regimes and stimulates the growth of extremist and nationalist attitudes among the population.

As back we did in the midst of the electoral campaign, we again state it clearly: the Party of Regions is totally against the populist answers to the problem of poverty. We see the only way of fighting poverty to be ensuring steady economic growth, with the priority going to the development of high-tech sectors.

There is a point I would like to emphasize especially: upon winning power, we faced the severe consequences of the preposterous – and this is not an exaggeration – preposterous populism of the previous government, when any ready cash used to be wasted in order to patch the holes constantly emerging in the state budget or thrown in to the abyss of buying food. As a sad result we had an unprecedented 15% fall in the general economic growth and a 25% fall in the industrial production.

We have managed to stop this disastrous policy, to stop the plundering of the state budget or spending it “on food”. The result was almost immediate: within the first half year alone we have achieved GNP growth of 6% and the industrial production growth of 12%. We have not yet caught up with the rapid pace of “the Asian tigers”, but we are seriously ahead of the EU states in this aspect. The Ukrainian stock market is now one of the world’s top five most intensively developing markets. Investors’ faith in Ukraine’s economy is steadily growing.

Alongside tax reform and the pension system reform this steady economic growth provides us with the opportunity for a balanced approach towards industrial development and technological advancement, while enabling the growth in peoples’ income and social protection for the vulnerable. We are fully determined to create a wide and vigorous middle class of well-to-do Ukrainians – people who will never cast their votes for dictators and populists out of poverty or despair.

And finally - sixth. European-type democracy is inconceivable without guaranteeing human rights and freedoms. During our term as the parliamentary opposition we did not allow our opponents to shrink the spectrum of democratic freedoms in Ukraine. All the gains that the young Ukrainian democracy has achieved during the years of independence have been fully in effect. Having won national leadership, we advocate the rigorous observance of essential human rights and freedoms, including the freedom of press and the establishment of independent public TV.

We have also promised our voters to enhance the range of language and humanitarian rights. Ukraine is a multi-ethnic country, and the duty of the government is to guarantee for all the minorities and ethnic groups the right to enjoy a wide variety of state services in one’s mother tongue. To solve this problem, we turned to the European example of dealing with issues of this kind, namely the European Charter for Regional or Minority Languages. The Charter was ratified in Ukraine long ago – but on paper only as it was practically ignored by the previous government.

On the basis of the Charter - that is already being actively implemented by our local authorities - and taking into account the recommendations offered on the issue by the Council of Europe, we are going to adopt a new law on languages. We expect this law to provide wide guarantees for language, educational and other humanitarian rights for the entire Ukrainian population.


Let me focus now on our international policy.

The goal we intend to pursue is to bring a true European sense into Ukraine’s foreign policy, not just in warm-worded speeches but in reality.

What do I mean by stressing “in reality”? Let me dwell on five important issues in this regard.


Issue 1. As regards national security, we have been taken into account both our own experience and the experience of those states that in the past found themselves on the front line of geo-political confrontation. To ensure our security we have chosen a European model, the model of non-participation in any military-political alliances. In our internal political language, we call this priciple “vneblockovost”, meaning being out of any block.

Let me emphasize this: we have chosen this model because it represents a European tradition and is widely understood and successful. History has shown us the fruits of this approach – neutral European states enjoy stable and succuessful development. Having said this, I want to point out that Ukraine is going to contiunue her active cooperation with NATO, the EU and other regional institutions to propote further enhancement of international security.

Issue 2. We have absolutely rejected the previous government’s approach to Ukraine’s relations with Russia, our neighbor and our largest economic partner. We consider the previous political attitude to be confrontational and deeply anti-European in essence.

Why do we claim that the previous policy was in fact anti-European?

By way of example, look at the official website of the President of Russia. You will see that Germany’s Chancellor Angela Merkel, one of the most respected European leaders and representing a major European state, found the time and the opportunity to meet with the Russian leader sixteen times within the past two and half years. Keep this figure in mind when you hear that during the same two years there was only one meeting between President Yushchenko and President Medvedev. Moreover this was a short informal meeting during a CIS summit.

When one hears voices saying that Viktor Yanukovich has been meeting with his Russian counterpart too often, one should take into account that we have dropped far behind many European countries as regards the intensity of the agenda in of our dialogue with Russia; we are also behind when it comes to investment from and trade with Russia. That is why we have set a, rather ambitious, goal of reaching the pre-crisis level of $40bn in Russian-Ukrainian trade turnover, while German-Russian trade turnover in 2008 alone was estimated at $63.7bn.

Issue 3. In the recent years Europe has been enhancing its presence in developing world markets. In contrast, during the past five years there has not been any state visit by a senior Ukrainian leader to countries such as India or China. Today we are doing our best to make up the lost ground, and we do it following the European experience.

I have recently read in the press that during the latest visit of the Chinese prime-minister Wen Jiabao to Italy the agenda included signing trade contracts for the total sum of € 2.25bn. As we don’t have time to wait for the Chinese leaders to visit Kyiv, our President paid a visit to Beijing this September, heading an impressive group of Ukrainian entrepreneurs. As a result, a number of documents were signed, bringing a potential total investment of $4bn. You see, we have even succeeded in getting a little ahead of Italy in this aspect. But on the whole, our new policy towards Russia and China shows we are ready to follow the lead of our fellow Europeans.

Issue 4. Mistakenly, in recent years Ukraine positioned herself on the front line of the geo-political confrontation, the government justifying this choice by sloganizing about “the export of democracy” and “the orange revolution”. Ukraine’s previous position on joining NATO finished in Europe being split in half on the issue and it seriously damaged our relations with many countries.

For this reason, one of the goals of our leadership team is to exclude any repetition of this scenario regardless of other political developments. We are determined to contribute to turning Eastern Europe away from a battlefield for spheres of influence and into a region of security, stable development and cultural dialogue.

Kyiv supports political initiatives aimed at the enhancement of Europe’s security system, be it steps initiated in Moscow or in any European capital. In this respect, it is not co-incidental that the issue of Ukraine’s role and place within the modern geo-political, economic and security space was one of the major topics discussed during the meeting between Presidents Viktor Yanukovich and Nicolas Sarkozy in Paris on October 7th this year. The EU intends to work on this issue in full cooperation with Russia.

Ukraine is determined to vigorously promote the initiatives for enhancing the system of European security during the term of Ukraine’s presidency in the OSCE in the year of 1213.

And finally, the fifth issue is developing the Ukraine-European Union relationship.

While we were in political opposition, our party did learn some important lessons from Europe. One of these lessons is choosing an appropriate approach towards our bilateral relations.

For years we have seen “the orange leaders” beg Europeans to give them “a perspective on EU membership” or for ’“some political hints”. This, frankly, could hardly be considered as proper European behaviour against the background of economic and political destabilization in Ukraine.

We are convinced that our relations with the EU should be established politically and reflected in agreements. If we set off on a route we should know what the final goal of our destination is. This is the logic of life. But we well realize that it is unwise to concentrate all our efforts on the final goal alone – there is a whole way to go. That is why we support the pragmatic approach suggested by the EU and, from the very beginning, have focused on realistic and practical steps, have been willing to compromise and have worked to reach mutually binding formal agreements reflecting those compromises.

There are three important points I would like to discuss in this regard.

The first point is political association and political dialogue. We view the association as the best form of relationship with Europe think that it will serve both parties for a long time being to come based as it is on compromise.

The second point is the free-trade zone. Yes, there has been some slow down in the talks on free trade, but we should not over-dramatize this fact. Our standpoint here us quite clear: we should move forward towards well-known “four freedoms”: that is the free flow of goods, services, capital and labor. If, in order to ensure these freedoms, we need to change the approach, let’s go ahead and change it. If not, let us seek goals that are a bit less ambitious and reach agreements wherever they are reachable.

Let me illustrate this point with an example. Recently a free-trade agreement has been signed between the EU and South Korea. It took South Korea several decades to develop its powerful economy, its high-tech industry, to gain its international reputation before this country came to the conclusion that free trade with Europe is more profitable than protecting South Korean market from competition. Ukraine has been independent for just 19 years, and only now has approached a point when technological advancement can become a part of the country’s agenda.

Another example is Malaysia, a country that is ready to start free-trade negotiations with the EU, a country that is far ahead of Ukraine in its economic and technological development. I have recently read an interview of my Malaysian counterpart Najib Tun Razak who said: Our strategy is high-quality economic advancement, and this is the reason why we are not ready to accept any kind of investment indiscriminately, as, for example, investments in mass-production of consumer goods involving hard human labor. And on the contrary, we will give priority to investments raising the value of human input and stimulating innovative technologies.

I have given these examples to emphasize that Ukraine, just like our colleagues from Europe and Asia, wants the free trade with Europe to become a powerful stimulus for innovative technological development.
What we cannot allow is the death of whole branches of our economy that could be swallowed by the new competition.

And finally, the third point – a plan of action concerning visa-free entry to Europe for Ukrainian citizens. I want to make our standpoint towards this issue absolutely clear. We consider the visa-free entry to the EU a powerful stimulus for the Europeanisation of the Ukrainian people, helping them get move towards a true European outlook, attitudes and values.

Unfortunately, the requirements that the EU often imposes for Schengen visa applicants from Ukraine are far too severe, and this impedes Ukraine’s Europeanisation. In fact, we see an absurd situation today: Ukrainian citizens, who have enough money to travel over the world, give up European travels facing the mega-bureaucratic and often humiliating red tape they have to go through seeking Schengen visas.

Instead they choose to go to Turkey, Egypt, Thailand or the Arab Emirates - countries that do not impose such visa obstacles. Sure, we want our citizens to travel all over the world, to learn about many different cultures. But let me ask you: isn’t Europe interested in welcoming Ukrainian tourists and thus providing them an opportunity to learn European values and ways first hand, directly from Europeans themselves? That is it surely in the EU’s best interests and the current approach of erecting a visa fence against fellow Europeans is a disservice to Europe as a whole.
Having said all this, I want to make it clear that I am far from saying we are moving ahead “super-smoothly”, without errors and difficulties.

My goal is to promote the understanding of our agenda, aimed – let me repeat what I said before – aimed at creating a common European homeland, not in speeches but in practice.

We will greatly appreciate any assistance, any criticism concerning errors and shortcomings in our work – we do have them, in just the same way as any party, any leadership.

This is the goal of the agreement with Group of the Progressive Alliance of Socialists and Democrats in the European Parliament that we signed today – to launch the relationship of partnership and to exchange both constructive criticism and support that is so important between partners.

Thank you for your attention. I will now appreciate your questions, your criticism and your comments.