A day after it increased sanctions against Russia, the European Union on Friday signed the political part of the Association Agreement with Ukraine, which was scrapped by that country’s former President Viktor Yanukovich last November.
The signing of the agreement recognised the “aspirations of the people of Ukraine to live in a country governed by values, by democracy and by the rule of law, where all citizens have a stake in national prosperity,” said the President of the European Council, Herman Van Rompuy, at the signing in Brussels, alongside Ukraine’s Prime Minster Arseniy Yatsenyuk.
Protests against Yanukovych’s scrapping of talks on the deal, were the trigger that set off a wider protest movement in Ukraine that eventually led to the ousting of the Yanukovych Government earlier this year.
The political chapter of the agreement commits both sides to political dialogue, reforms to promote democracy and respect for minority groups, and greater convergence in security and foreign policy. The not-yet-adopted trade chapter aims to establish a free trade agreement over a ten-year period, including the elimination of custom duties and export subsidies between the regions. Separately, the EU is set to temporarily remove customs duties on Ukrainian exports to the 28-member region. It is also set to agree on the provision of at least €11 billion in assistance to Ukraine. Yatsenyuk has put the country’s total requirements for the next two years at $35 billion.
Reuters report adds: Ukraine’s Prime Minster Yatsenyuk urged European leaders to move decisively to contain Putin with economic pressure or risk the conflict — the most bitter East-West confrontation since the Cold war — spilling elsewhere into Europe.
“The best way to contain Russia is to impose real economic leverage on them,” he told reporters after the signing ceremony.
On Thursday, EU leaders began preparations for economic sanctions if Russia expands its footprint in Ukraine, but failed to detail what measures the bloc could take.
Underscoring divisions in Europe, which have hampered its response to the crisis in Ukraine, French President Francois Hollande said late on Thursday that Kiev could count on tightening relations with the EU but not on membership.
“I have always considered that Ukraine should be associated with the EU. It couldn't aspire to be a member of the EU,” he told reporters. Some European policymakers have pushed the EU to open its doors to countries in the east as an incentive to reform and resist Russian pressure on those states to shun Europe.
But many EU governments, wary of goading Russia with which they have had major commercial ties, are loath to so much as suggest Ukraine could one day join the bloc.
As well as the closer political ties, the European Commission has agreed to extend nearly €500 million ($689 million) worth of trade benefits to Ukraine, removing duties on a wide range of farm goods, textiles and other imports.
Access to market Once Ukraine has a new administration and signs a free-trade agreement with the European Union, it will have unfettered access to the EU’s market of 500 million consumers.
That has the potential to strengthen Ukraine's shattered economy, but also runs the risk of provoking retaliatory steps from Russia, which has already imposed stricter customs checks on trade with Ukraine.
The other burden for Kiev is meeting the obligations that come with EU political association. These include instituting changes to the rule of law and justice in a country long plagued by corruption and repressive governance, and adopting business and environmental standards that will require hard work and long-term investment to meet.