European Union grants Ukraine a loan, but defers associate membership (10/25/98)

European Union grants Ukraine a loan, but defers associate membership

by Pavel Politiuk and Roman Woronowycz

KYIV - President Leonid Kuchma met with European Union leaders in Vienna, on October 16, looking for financial aid and associate status for the country within the European structure.

The European Union was very forthcoming with the money - granting Ukraine a $182.5 million balance of payments loan to encourage economic reforms and strengthen the country's currency reserves, and agreeing to provide $203 billion for the Chornobyl Shelter Fund - but less so with President Kuchma's request for associate status.

European Commission President Jacques Santer said the EU would continue to support closer ties with Ukraine, but stopped short of proposing associate membership. "We are building and deepening a genuine cooperative partnership relationship with those countries with whom we are not in an enlargement process at the moment," said Mr. Santer.

The meeting was attended by President Kuchma, European Commission President Santer, EU Foreign Affairs Commissioner Hans van der Broek and Austrian Chancellor Victor Klima, who currently presides over the European Union.

During the one-day state visit billed as a Ukraine-EU summit, the two sides discussed economic and trade relations as well as the chances for Ukraine to secure associate membership status.

"Ukraine will not change its European choice," said President Kuchma. "Ukraine's priority is to reach associate status first, and later full membership." He added that there is no other way for Ukraine.

Although Ukraine sees integration into European structures as a strategic goal, with associate membership in the EU as an initial step, Ukraine has not yet met a key minimum requirement that it show it has completed the transition to a market economy.

Before the EU could even consider Ukraine's request it would have to give Ukraine market country economic status, an acknowledgment that Ukraine has fully reformed its command economy, a legacy of the Soviet period.

President Kuchma's press secretary, Oleksander Maidannyk held out hope that the process would be completed quickly. "The president has no illusions that the integration process will be rapid," said Mr. Maidannyk.

Ukraine received a boost for its cause when Austrian President Thomas Klestil expressed his support for Ukrainian membership. "We note with great joy that Austria, as we have learned from the Austrian president, supports our efforts to be integrated into Europe," said President Kuchma after his meeting with the Austrian leader.

In their joint communiqué, the European Union and Ukraine expressed agreement that the strategic partnership is a major factor in strengthening peace and stability in Europe.

During the summit - the first since Ukraine and the European Union signed a treaty on friendship and cooperation in May 1997 in Kyiv - Ukraine expressed concern that EU enlargement would throw up barriers for travel and trade with Poland, its western neighbor and strategic partner, which is due to join the EU.

"The problem does exist, and it troubles us from the point of view of this new splitting of Europe," said President Kuchma.

European President Santer assured Mr. Kuchma that travel and trade agreements between Poland and Ukraine would be well considered as Poland moves into the EU sphere. "We are not building dividing lines in Europe," said Mr. Santer.

Mr. Santer said the EU is prepared to continue financial support for Ukraine and to help the country achieve membership in the World Trade Organization.

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