Speech by Commissioner Johannes Hahn at Investors' business forum, Lviv, Ukraine
Ladies and gentlemen,
I'm delighted to have the opportunity to
speak to you today about what needs to be done to give renewed confidence to
the business community in Ukraine and also, what we in the EU are doing to improve
the business climate in your country.
In 2015, Ukraine has worked hard to
ensure macro-financial stability. Following a deep recession, macroeconomic stabilisation is gradually taking hold. It is still too
early to relax, but the outlook is better than before.
In 1991, Ukraine and Poland had a
similar GDP per head. Now Polish GDP per head is three times higher than in
Ukraine. Change in Poland required political will and tough choices, and
cooperation between political parties, Government and opposition. It required
technical capacity and teams in place, able to work over sustained periods on
seeing work through. It required wide support throughout society.
Ukraine can do the same.
BUT the only way to unlock this
country's potential is through reform: Reform to create confidence in rule of
law; reform to create a business climate in which enterprise can flourish;
reform to put in place a public administration that really works.
We recognize the efforts made by the
government. A great deal has been achieved in a short time. There is still a
long way to go, but success is possible.
Despite the massive pressure on the
economy and the fragile situation in the east, I see no reason why this country
cannot sweep away the other disincentives to do business in and with
Ukraine.
That is why we're backing Ukraine with
an unprecedented range of support. Last year we and the European financial
institutions committed 11 billion Euro to support
Ukraine’s political, economic and financial stabilisation
and since then another 1.8 billion has been added.
Today, I want to focus on the business
climate – how can Ukraine become attractive to
investors, and how will the EU help?
What Ukraine needs to do
The EU is ready to help with promotion
of investment in Ukraine. But we can only complement your own efforts to
establish a solid reputation for Ukraine as a good destination for investments.
That is perhaps one of your biggest challenges.
Next year, the government hopes to move
on from securing macrofinancial
stability to achieving economic growth, by launching a number of reforms. This
is good news. We encourage the government to make full use of the expertise
available in the EU Delegation in Kyiv, the IMF Office and World Bank so that
these reforms can be carried out in line with best practice and commitments
undertaken.
There are two issues,
that will determine whether today's Ukraine can make a
breakthrough. Tackling corruption and judicial reform.
These are "make or break" issues without which nothing else can
succeed. Legislation is worthless if it is not upheld by the courts. No amount
of deregulation will compensate for corrupt practices among officials.
We support reforms in these key areas by
attaching conditions to the disbursement of funds that we supply in grants and
loans. But in the end, change has to be planned and carried out by
the Ukrainian government.
And the change has to go deep.
Anti-corruption efforts and judicial reforms are not concessions to the EU. They
are crucial to the interests of the Ukrainian people, and the business
community working here. This change has to be made and owned by
Ukraine.
Customs is an area in which
anti-corruption is important and which is of utmost importance to a successful
development of business activities in Urkaine. Much
too often, Ukrainian customs in the past has been associated with artificial
queues at the border and the need to pay so-called "acceleration
fees" to clear goods through customs. To obtain a modern and
efficient economy, Ukraine also needs a modern and efficient customs service
that is dedicated to high standards of law enforcement and ethics and
facilitates legitimate business.
AND alongside these efforts, Ukraine
must also deliver proper implementation of
reforms in key areas for the DCFTA like Technical Barriers to Trade, Sanitary
and Phytosanitary standards, and Public Procurement).
These are measures that can quickly deliver
tangible short term economic benefits for Ukraine.
What the EU is doing
Having said this, the European Union can
help. We have put in place a number of measures to support business.
The Deep and Comprehensive Free Trade
Area which will enter into force on 1 January will not change your economy
overnight – but over time it will help you find new markets and new
opportunities for business in Europe and beyond.
It will contribute to a better business
climate, because it offers predictability. Investors will know what regulatory
environment will be in force in Ukraine.
The keyword again is ownership. The
Ukrainian government needs to implement the agreement, of course, and we are
jointly reaching out to companies to explain what the changes mean, so that the
business community can play its part.
We have launched a facility to help SMEs
in particular to take advantage of the new
opportunities for trade with the EU. We will improve access to finance to help
SMEs and we will also help them to comply with new technical and environmental
rules. We expect the facility to unlock around
a billion Euros of new investments in Ukraine.
"EU for Business" is intended
to help change the business environment, by working with regulators to reduce
burdens on business. And to provide advice and help Ukrainian producers
find markets in the EU.
Now – I have heard Lviv
being called the most European city in Ukraine. You are just 60 km from the
border and are already a magnet for tourists. You have three quarters of
a million citizens with a high skills base.
I want to come back and visit Lviv towards the end of my mandate as Commissioner and see Lviv not just one of the most innovative cities in Ukraine,
but taking its place among the success stories of Europe.
I hope you will invite me back to see
this: I am sure you can make it happen!
Thank you.
European
Commission