UKRAINE’S INTEGRATION INTO THE EUROPEAN UNION

УДК 339.923:061.1ЄС(477)

Танковська К.І., студентка 1 року ОС магістр
ХНЕУ ім. С. Кузнеця

The relevance of this article lies in the fact that today the European Union is entering a new phase of integration. There are major changes in the sphere of unification of tax systems, the convergence of legislation, introduction of the euro as a single currency, political, social and environmental problems, the problems with human rights and security are on par with economic ones. This association is very attractive for Ukraine as a young European state. Therefore, one of the most urgent tasks for Ukraine is the associated membership in the European Union.

Ukraine’s relations with Europe’s largest integration alliance, the European Union, require a special strategy. This is explained by the fact that the image of modern Europe is mainly determined by integration processes that unite 28 states into the European community. There are no analogues of the EU all over the world [1].

Based on the unity of the economic and political interests of Ukraine and the real steps that has already been taken, it is possible to speak about an entirely definite tendency of expansion and development of its integration into European structures.

The strategy of Ukraine consists of approaching the pan-European structures using two parallel courses – direct and through the membership in the Central European institutions.

Today, there is no clear position in the EU regarding to the further development of relations with Ukraine. On the one hand, Ukraine’s aspiration for European integration is not rejected. However on the other hand, the EU practically does not take any concrete steps towards Ukraine. Probably, the reasons for this inaction are the extremely difficult economic situation and low progress in the implementation of reforms by the Ukrainian leader. Also, it can be the war in the Donbas, because particularly of, the fact that most of the obligations under the 2015 Minsk Agreements are not met by Kiev. It reinforces the critical position of the EU in relation to the current leader of Ukraine.

In relations with the EU, Ukraine hopes for:

  1. resolving issues regarding Ukraine’s accession to individual European programs, in particular in the fields of energy, transport, science and technology, environmental protection, education etc.;
  2. ensuring non-discriminatory access of the main export goods of Ukraine to the EU markets;
  3. activation of financial and technical assistance of the EU countries to Ukraine etc.

The main advantages and disadvantages of joining the EU. Advantages are as following:

  1. The EU products are cheaper. Customs duties will be removed, making the EU goods cheaper by 10-15%. This applies mainly to those products that are available on the shelves today. It is also expected to increase the cost of dairy and meat products from Eastern European countries.
  2. European production in Ukraine. Perhaps, this is the main advantage of integration into the EU for Ukrainian economy, but it will only appear in five years, when Western companies adapt to the working conditions in Ukraine (or its rules will be adapted to theirs) and begin to transfer their production to Ukraine because of cheaper and more skilled labor force. People will get jobs, entities of the European level, “white” salaries.
  3. The opening of the EU market. The biggest winners will be Ukrainian companies supplying raw materials and semi-finished products to Europe: they are already in demand in this market, and if duties are canceled, they will increase production and profits. It will be harder for manufacturers of finished products to find their place on the European market due to strong competition. Also, in the process of integration with the EU there will be nuances that may limit the possibility of Ukrainian products entering the EU markets.
  4. Profitable loans. International financial institutions are generally more loyal to countries whose economies are interconnected with the US or the EU economies. Therefore, the likelihood of obtaining loans from the IMF, the World Bank and the EBRD significantly increases, and today it is the most favorable loan conditions in the world.
  5. European perspective. This is not about joining the EU – it will remain a distant prospect. Integration with the EU will give Ukraine more preferences in obtaining visas to the EU, expanding the free trade zone – in particular, freedom for the services market and movement of labor (Ukrainians can get the official right to work legally in Europe). If Ukrainian companies are able to provide services on the European market (in particular, transport or IT), and the citizens are free to work in the EU, this will have a positive effect on the Ukrainian economy [2].

Disadvantages are as following:

  1. Decrease of production. Increased competition and sanitary or environmental standards of the EU can lead to the fact that in the first two years many Ukrainian producers will close (especially in the light and food industries). This is threatened with a deterioration of the social situation and a shortfall in budget revenues. However, the situation will change for better when plants and factories adopt European standards.
  2. The threat of hryvnia. The decrease in exports to the countries of the Customs Union (which may at least temporarily close its borders) and the increase in imports from the EU will worsen the trade balance. Itmay lead to a fall in the hryvnia exchange rate. Investments from Europe or a significant expansion in exports of its metal, raw materials and manufactured goods to Europe can save the situation.
  3. Prices increase. The opening of the EU market can causean increase in a price of the products that are cheaper in Ukraine than abroad, since it will be much more profitable to export than to sell locally. In particular, this concerns the prices of electricity and gas of Ukrainian production. However, the state can regulate this process.
  4. Unemployment. The fall in production is fraught with rising unemployment. However, the Ukrainians will have the opportunity to work in Europe.
  5. Coordination of issues. The Association Agreement and the FTA envisages that the EU decides by itself which articles of the agreement enter into force immediately, and which after their ratification. A joint commission will be created to regulate Ukraine’s trade with the EU [3].

The integration of Ukraine into the EU has both positive and negative sides. Therefore, the issue of Ukraine’s entry, like any other country, into the EU is a very difficult and complex problem. Obviously, the European Union is not in a hurry to undertake obligations to open the door to Ukraine, due to a poorly developed economy. In addition, it is possible to say that the policy of the European Union today is largely determined by the increasing security problems caused by political instability on the European continent, existing and potential regional conflicts. Therefore, under these conditions, the entirely natural interest of the EU to Ukraine has mostly a political nature, and Ukraine is consideredmainly as a strategic foothold on the European continent.

REFERENCES

  1. The Decree of the Cabinet of Ministers of Ukraine (2014). On Approval of the Concept of Local Governance and Authorities’ Territorial Organization Reforming in Ukraine.

  2. Hurnyak І., Datsko О., Yaremchuk I. Added value as the basis of territorial communities’ economic development. – Regional economy. – 2015. Vol. 1. – Pp. 37-47.

  3. Agreement between the European Community and Ukraine on the facilitation of the issuance of visas.

Науковий керівник

старший викладач Михайлова Л.З.