Pirkka Tapiola
21-01-2010
I was listening to this discussion and I saw a lot of emphasis on what different organisations have been doing in this region. The EU is not, of course, an organisation, it is something else. I am not going to define it. We have had the Lisbon Treaty, and you can read it and try to define it for yourselves. I’ll start by our outlining our vision of the region. In the context of economic crisis, there are a lot of very important changes that are taking place.
You have seen the European Security Strategy of 2003 which defines what we would like to see around the EU (I would not even say “around the EU” because it places strong limits). We would like to see a ring of well-governed countries. We believe that for security, for stability and for the future, the idea of well-governed countries is probably the most important. You have seen European Neighbourhood policy. (I know this is a bad word in Ukraine). This is a tool box and it should be used as a tool box. You have seen the Eastern Partnership that brought certain bilateral aspects into the European Neighbourhood policy. Now, we have Association Agreement negotiations, and we have deep and comprehensive free trade negotiations. Everything is there to support reforms and help these countries become modern, strong and well-governed.
The global economic crisis brought about a paradigm shift: now, we have moved from discussions on what the EU can do for Ukraine and other countries to discussions of what these countries can do for themselves.
The paradigm shift is very important. Let’s look at what we have seen in terms of economic management and in terms of reforms. We have seen fantastic reforms in terms of democracy. In the last five years, we have seen free and fair elections. Sometimes, they may have happened too often, but we have seen them. We have seen a vibrant civil society. In Ukraine, we have seen freer media than anywhere else in the former Soviet Union. These are fantastic things. What we have not seen is a real focus on certain reforms. Now, we hope that after January we will see stabilisation that will pull people together to push these reforms forward. In the context of economic crisis, there are very deep issues that have to be addressed. These are issues that will have implications for both the strengthening of political sovereignty (this is a very important security factor) and for the strengthening of economic sovereignty, competitiveness and globalisation compatibility.
The crisis has given us a real opportunity. We have seen the lack of separation between business and politics. We have seen weak politics, strong business and even chaotic politics. (I say this in my personal capacity.) It was fine as long as the global market was functioning, as long as things were going forward and as long as the economy was growing. The governance factor was not needed that much for economic growth. Now, that’s gone. In the time of crisis, business needs governance and countries need governance to build their future. Now, there is a fundamental opportunity: not just for Ukraine specifically, not just for the region, but for transition economies in general. I am not criticizing anybody; I am just trying to make a point. There is a demand for governance and there is a demand for reforms. Actions must be taken now.
The EU has been there to help. You have to understand that Eastern Partnership, or other instruments, were never meant to be answers. I remember how one former Head of State compared Eastern Partnership to the billions that could be gotten from somewhere else: Eastern Partnership, “ýòî òîëüêî êîíôåòû” (it’s just candies). No, it means reforms. EU support comes via its very tight link with international financial institutions: the EU is a major donor of the IMF. This year, we have doubled our contribution to the IMF. The conditionality is painful, but it should be seen as part of the EU global support package. My former boss, Javier Solana, used to say that ”this crisis is global, solutions must to be global as well”. Therefore, the leading position of the IFIs has been very important.
Let me get back to the question of political sovereignty and globalisation compatibility. Here are a couple of impressionistic comments. We’ve often seen a tendency in many countries to look for the easiest way to meet conditionalities: Are there any other funding sources than those with strong conditionality? What’s the mix that could be made in order to muddle through? This may work for some time. In the context of elections it is maybe necessary. Sometimes, I compare this type of thinking to a morphine shot: it makes you feel better, but it does not cure you and it doesn’t prevent major surgery. This is also true for more industrialised countries as well. Now, we are about to go for major surgery, and transition economies even more. The question of reforms and conditionality must be taken very seriously. As long as you take half-measures that help you to muddle through (especially in countries that are still consolidating their statehood), your country will not become a strong equal partner. I’ve heard the term “equal partners” many times here. Our major strategy is to support countries in becoming stronger, more reformed and, therefore, with a more consolidated sovereignty. And when we talk about sovereignty, it is easier to talk about countries that are strong, less vulnerable.
What about the question of globalisation compatibility? Belarus is a good example; Ukraine - to a lesser extent; Moldova has its own issues. Heavy industry is still very important in the countries of Soviet traditions. This heavy industry, however, needs to be modernised. It needs to become more energy efficient and more competitive, especially when there is no cheap gas.
What is the niche of these countries? What is their development strategy? When I was a diplomat here, I went to visit a large city in Western Ukraine. And I asked about their development strategy: What’s your SMEs strategy? How are you going to develop small and medium size enterprises? The mayor looked at me and said: This is Ukraine. We have rocket industries. We have aircraft industries. We have heavy industries. Are you trying to offend me with this SMEs strategy? I responded: Fine. This is Eastern Ukraine. What is your regional development strategy? Now, the idea of the niche is there. Asia has already been mentioned. These countries pay a lot of attention to the question of their own development niche.
Ukraine is clearly European. We talked about what brings the EU and Ukraine closer. After the Orange Revolution, when Solana and Kwasniewski returned from Kyiv, they were asked by the press: What brings us closer? At that moment, the answer was “the quality and depth of relationship between Ukraine and the EU”. It also depends on the quality and depth of democratic reforms in these countries and their transformation into well-governed countries. This is what European identity means. Thank you very much.
