Sunset reforms: why the coalition of torpedoing the Association Agreement

The events of this week proved that even the risk of termination of assistance the West can force the Ukrainian authorities to refuse from the usual schemes.

Ukraine’s relations with the West seem to be in the lowest point since the revolution of dignity. Two weeks ago Poroshenko in Brussels pathetic stated about the “fall of reform”. But autumn calendar ended, but instead to reform it’s “cold”. And in some areas the government even tried to abandon the progress made.

The idea of the leaders of the coalition to subjugate all anti-corruption bodies, NABOO, NACP, RRT and SAP caused the greatest reaction from Brussels and Washington. Threats from the IMF and the prospect of suspending the visa-free regime with the EU was effective. The controversial initiative was withdrawn from consideration.

However, the “festival of the absurd” in Parliament was not confined to this initiative.

Thursday 7 December, Council adopted a number of decisions that create new problems in relations with the EU and the IMF.

Black Thursday

First of all, the Council extended for another year the moratorium on sale of agricultural land. The beginning of the operation of the land market is one of the conditions of cooperation with IMF, which will further complicate future negotiations with the IMF.

And before that, the deputies adopted two decisions, directly violates the provisions of the Association Agreement with the EU.

First of all, Parliament has allowed the President to temporarily (for a period of not more than three months), to conduct a competitive selection process, to appoint members of the national Commission, carrying out state regulation in spheres of power and utilities (NKREKU). Thus, the independence of the regulator was questioned – now, the President may, if desired, to block the competition, regularly perenaznachen “their” members of the national Commission.

But the most controversial vote of the day was the adoption of the (fortunately – so far only in the first reading) the bill “Buy Ukrainian, pay Ukrainians”.

This bill was developed by deputies of the Radical party, actually destroys the system of public tenders ProZorro, setting incentives for companies whose products have the confirmation of the domestic production of not less than 20% of the cost of production.

Such companies will have an advantage over competitors, even if their proposed price of products is higher by 43%.

“This law will be a jet engine of our economy, to taxpayers ‘money worked for the Ukrainian economy”, – said during the discussion of the initiative by the party leader Oleg Lyashko. According to him, against the bill are only those “who sells national interests on all continents”.

No wonder Lyashko is not supported by all. And among economists resistance to this initiative is almost unanimous.

Important point – for the first time in a long time, the Ministry of economic development made a statement about the parliamentary bill, urging them not to vote for him. Still even when considering initiatives that could cause problems with the EU or the WTO, the Ministry chose not to oppose publicly. As a maximum, the criticism heard from some officials, who stressed that Express only the opinion.

However, the statement of the Ministry is not convinced deputies. And personally, to present its case in Parliament officials did not want to. They say that voting for this bill became a “pay” radicals for their support of the budget.

Support of national corrupt

So, what threat this bill?

“European Pravda” has already published a detailed legal analysis of the initiative. Conclusions disappointing – it contradicts both the Association Agreement and the WTO agreement on government procurement.

The economic development Ministry adds that foreign companies among the participants of Ukrainian tenders and so almost no import component in government procurement – only 27%.

Consequently, the promised economic effect from implementation of this initiative seems extremely doubtful. But these rules should lead to increased state budget expenditures.

“The greatest harm, the authors will cause those who supposedly undertook to protect. In fact, bill No. 7206 significantly difficult for Ukrainian manufacturers participating in the public procurement system, offering some endless additional list of supporting documents-certificates for participation in the tenders”, – said Deputy Prime Minister Ivanna klympush-Tsintsadze.

In fact, ironically the first Deputy Chairman of the MEDT Maxim nefodov, the law provides incentives not so much to domestic producers, as those “who will collect 23 information”.

“The plan is just copied from Russia, there they periodically present a “Russian phone or tablet”. Of course, to sell it at exorbitant prices only to the state,” adds nefodov.

The Progress Of Europe

After providing Ukraine bezveza the EU there is not a lot of leverage on Kiev. The main tool of now – macro-financial assistance, i.e., long and cheap loans that Brussels has the right to provide its key partners.

In November, after the summit of “Eastern partnership” Ukraine’s President Petro Poroshenko announced agreement with Brussels on a new program of MFD, the cost of which could reach 2 billion euros.

But don’t expect that after the Council of the Association Groysman will bring the money to Ukraine. The Treaty on “Microfine” is still there and still long enough will not.

“Macro-financial assistance rules saying we can negotiate it only with a country that has an active cooperation program with the IMF. So, until you resume with the IMF, there will be no movement” – said the source in the structures of the EC.

This means in particular that the Europeans will give money only after the creation of the anti-corruption court, because it is one of the key requirements of the IMF.

A condition for the granting of one of the first tranches will also automatically checks for declarations. This is not required by the IMF, but it is a key point for Europeans

By the way, earlier the EU has made a mistake in relations with Ukraine, making concessions to the issuance of the second tranche of money was issued without fulfilling the conditions. In particular, the Ukrainian government has not solved the problem with a moratorium on the export of unprocessed timber.

Now the EU are looking for, how to avoid old mistakes. As assured EuroPride several interlocutors in Brussels, the terms of the withdrawal will be registered very in detail. But the round timber in the new Treaty may not mention. At least this idea is being discussed in Brussels.

What was it?

Why three days Rada adopted a number of decisions that radically worsened the image of our country? Especially doing it defiantly before the Council of the Association.

This question has several possible explanations.

The first – the traditional new year’s auction budget. The coalition has no enough votes for the budget, and therefore it needs to attract them by paying if possible.

This is a relatively optimistic explanation. At least it leaves hope that, after voting for the state budget for 2018 (and on the night of Friday, he was still approved) common sense to the coalition will be back. Perhaps it will avoid new populist decisions, and some have already been taken to eliminate or minimize.

But there is a deeper problem.

December 2017, in fact, was the start of the race.

Although the next election is almost a year and a half, the tension is felt now. We are waiting for a year or two the bitter populism, to counteract which it will be very difficult even the EU, US and IMF combined.

Even though these two versions does not explain the attempt to destroy the independence of anti-corruption bodies, a step that does not bear campaign bonuses, but causes severe reaction of the West.

Most likely, the Ukrainian government sometimes falls into the illusion that support for the EU and the USA is guaranteed, macro-financial assistance to Ukraine is still willing, but the abolition bezveza is empty threats.

Therefore, without fear of consequences, she “tests” the red lines of the EU, one after another. Failed to “push through” innovations at NAB – will try to “upgrade” a system of tenders.

This is a very dangerous path. As you know, sooner or later, the straw breaks the camel’s back. In recent days, the Ukraine was very close to it.

Related posts