by
Martin Banks
While "huge" reforms are underway, German MEP Ingeborg Grassle cautions,"There is a clear danger that as soon as we turn our backs, everything will be as it was before." er comments come after a delegation of MEPs visited the country from 16 to 19 May. The Christian Democrat said, "On the one hand, we see a unique setup of new anti-corruption agencies and law enforcement bodies. On the other hand, life is made as hard as possible for these new bodies and agencies, due to missing equipment and cars and inadequate office space." She added, "Therefore, we need to continue empowering the reformers. Ukraine is a country at war. We see huge reform efforts, in particular as regards the judiciary and public procurement. Some of the results are truly impressive. "It seems that our money is in good hands whenever it goes directly to beneficiaries. At the same time, we need to devote ourselves to the follow-up of these projects."
Since the Maidan revolution, the EU has been providing financial assistance to support Ukraine's stabilisation and reform process. Some €3.4 billion of EU funds go for macro-financial assistance, €900 million for bilateral development assistance, €500 million on regional assistance, €50 million for stability and peace and €60 million is spent on humanitarian aid.
The delegation, which visited the Lviv region to monitor EU funded projects and trans-border cooperation with the EU, met the central authorities in Kiev. There were also meetings with civil society and anti-corruption watchdogs. Meanwhile, the former Finance Minister of Slovakia, Ivan Miklos, says that radical reforms to Ukraine's energy market now aligns the country with EU energy policy, especially on energy prices. Ukraine's energy sector has been riddled with serious problems and characterised by many as one of the biggest sources of waste and corruption in the country.The escalation of Ukraine-Russia tensions in 2014 aggravated the energy situation as well as its economic recession. However, Miklos, now one of the key advisors to the Ukraine government on economic reforms, says the Ukrainian government has made "significant progress" in terms of implementing legal reforms in line with the EU Third Energy Package and its obligations under the European Energy Community Treaty which it joined in 2011.
Recent legislative changes widely seen as "significantly" improving the situation include an October 2015 law on the natural gas market that sets principles for gas market reform. Legislation, including reorganisation of the state-owned oil and gas company, Naftogaz, is being drafted and Ukraine's government also adopted a "Corporate Governance Action Plan". A draft law on the electricity market, addressing electricity reform, has also been approved by the government. A key milestone in progress towards energy market reform came last month when Ukraine's Electricity Regulator - the National Energy and Utilities Regulatory Commission - approved the wholesale market and retail prices of electricity for 2016 for both industrial and consumer use.
Commission head Dimitry Vovk said the prices were calculated according to a new mechanism "used in most countries of the world" and this, he said, will now bring the pricing mechanism for Ukraine into line with the rest of Europe. Energy is the most important sector for integrating the Ukrainian economy with the EU's single market.
At their recent meeting in Japan the G7 energy ministers also voiced support for Ukraine's current reform of the energy sector, saying, "We welcome the ongoing significant reforms in Ukraine in the field of energy policy,including energy tariff reform in the gas sector." Energy sector reforms, they said, demonstrates the government's "significant political courage and willingness" to further reforms.
Ukraine's government is expected to continue and complete itsenergy market reforms,including the gradual abolishment of subsidies and enactment of legislation to carry out liberalisation of gas and electricity markets.
By: N. Peter Kramer
