EU cancels EUR 70 mln in reforms financing for Ukraine

The European Union (EU) has canceled a EUR 70 mln payment to the Ukrainian government to finance reforms to the state bureaucracy, the Kommersant-Ukrayina newspaper reported on July 12, citing anonymous sources in the European Commission. Legislation approved in November 2011 didn’t offer enough of a foundation to create an independent, professional, depoliticized state service, Kommersant reported. The Ukrainian government ignored requests to change the law by the end of 2012, resulting in the funds being canceled.

Zenon Zawada: The Kommersant report mentions that the Ukrainian government lost the EUR 70 mln a half-year ago, yet EU leadership didn’t draw attention to it for political reasons. The EU addressing this issue now is a signal to the Ukrainian government that it could lose a lot more, particularly in the context of the Association Agreement, if it doesn’t heed the advice of EU experts in pursuing reforms. In addition, the EU is expecting Ukrainian reforms in spheres such as administering state finances in order to decide whether to renew financing for Eastern Partnership programs.