On June 23, 2022, at the EU Summit, 27 member states voted to give Ukraine and Moldova candidate status for European Union membership. This positive decision comes as a symbol that Europe stands with Ukraine and a new impetus for Ukraine’s victory in the war.
According to European Commission, as regards the political criteria, Ukraine has reached the stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities. Concerning the economic criteria, Ukraine has demonstrated a noteworthy resilience with macroeconomic and financial stability ensured also after Russia’s invasion in February 2022. This reflects not only a very strong political determination, but also relatively well-functioning institutions.
As regards the capacity to fulfil the obligations of membership, Ukraine has worked since 2016 on the implementation of the EU-Ukraine Association Agreement, including a Deep and Comprehensive Free Trade Area (DFCTA). It has an overall satisfactory track record of implementation.
Overall, the European Commission has made clear that the accession process will follow the same criteria and rules for all candidates. There’s no existing fast-track path to speed up the membership criteria. Therefore, Ukraine should continue structural reforms by implementing legislation on a selection procedure for judges of the Constitutional Court, strengthening the fight against corruption, and ensuring that anti-money laundering legislation is in compliance with the standards of the Financial Action Task Force.
However, granting Ukraine the status of a candidate is foremost a signal for Western private investors, private businesses, that the EU believes in Ukraine and its economic potential. That European modernization of Ukraine is beneficial not only geopolitically and in terms of values, but also economically. That Ukraine can be and should be invested in.
Prime Minister of Ukraine, Denys Shmyhal, noted that EU candidacy status testifies to the success of the reforms and significant progress in approaching European standards. Ukraine has already begun integration into the EU internal market, signed a visa-free regime in the aviation, energy sectors and has approached to integrating customs regime, industrial and digital sectors regulations. “In addition, it opens Ukraine wider access to the EU programs and funds, as well as to attracting new investments, as business will now consider Ukraine as a potential member of the European Union and a promising platform for startups,” said the Prime Minister.
It is obvious that the post-war reconstruction of Ukraine will become the largest European modernization project of the 21st century. And it is fundamentally important for Ukraine that the reconstruction should become not only a humanitarian mission of the West, but largely an investment one. Therefore, there are positive expectations that Ukraine’s candidate status will open up investment opportunities for European business, specifically, in agriculture, manufacturing and renewable energy sectors and will direct private investments towards reconstruction effort. The post-war investments in Ukraine are to upgrade its physical capital, improve educational outcomes and spur innovation.
Overall, the further accession of Ukraine to the EU would be beneficial for all parties. Ukraine can guarantee European food security, accelerate the green transition and reduce energy dependence on Russia, as well as make a significant contribution to the economic development and digitalization of Europe. For European business, the candidate status is a signal to take a closer look at investment opportunities in Ukraine. It will create conditions for private European investment in Ukraine, reduce the weight of public finances and make the future recovery of Ukraine not an additional burden on European budgets, but an added value to European business.
And for Ukrainian business, the EU candidacy has become the final and irrevocable signal that it is time to learn to compete at the European level and work according to European rules.
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