Community News

Thursday, March 4, 2010

EU: Ukraine needs reforms for closer ties

Thu Mar 4, 2010 12:00pm GMT

* EU expects stability, energy system reform in Ukraine

* EU says Ukraine should resume talks with IMF, pass budget

By Marcin Grajewski

BRUSSELS, March 4 (Reuters) - The European Union is ready to deepen its ties with Ukraine in the areas of trade, energy, visas and others, if the country's new authorities push ahead with reforms, the bloc's senior official said on Thursday.

The EU hopes Viktor Yanukovich, the ex-Soviet republic's newly elected president, will prove to be pragmatic, despite his strong relations with Russia, capable of restoring political stability and overcoming the economic crisis.

Yanukovich faces a difficult task of stitching together a new ruling coalition after Ukraine's parliament dismissed the government of his rival, prime minister Yulia Tymoshenko.

On Thursday his party proposed changing the law on the formation of a majority coalition to speed the process, a move Tymoshenko's bloc called a "constitutional coup d'etat". [ID:nLDE62314C]

"Presidential elections and the likely formation of a new government provide both opportunities and challenges for the EU," EU Enlargement and Neighbourhood Policy Commissioner Stefan Fuelle, told a seminar on the bloc's relations with eastern European countries.

"We need to convey a strong message to the new administration: the Commission is committed to having strong relations with Ukraine," he added.

But for that to happen, Ukraine needs to put its political and economic house in order, notably renewing its cooperation with the International Monetary Fund and passing the 2010 budget that would help the country dig itself from deep recession.

It should also overhaul its energy infrastructure, Fuelle said.

"The president should be ready to cooperate with a wide political spectrum, including the opposition," he said. "Ukraine must be serious in its efforts to fight corruption."

A new association agreement with Ukraine, still being negotiated, could include free trade, strong cooperation in energy issues and "a roadmap to a long-term goal of a visa-free travel," he said.

Political rows before the presidential election have thrown Ukraine's economy into disarray, contributing to a crisis that saw gross domestic product contract by 15 percent in 2009.

They also led the suspension of talks with the IMF on a $16.4 billion bailout package.

Yanukovich chose Brussels for his maiden foreign trip as president this week to signal his readiness to boost ties with the 27-nation bloc despite pro-Moscow views and opposition to joining the NATO military alliance.

The EU is eager to see political stability in Ukraine, a country of 46 million that is a transit route for natural gas from Russia to the bloc. Rows between Moscow and Kiev over gas have twice interrupted supplies to the EU in the past. (Editing by Philippa Fletcher)

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