Ukrainian agricultural exports to the European Union (EU) countries in January-May 2019 grew by 30.8% compared with the same period in 2018, to $2.97 billion, Acting Minister of Agrarian Policy and Food of Ukraine Olha Trofimtseva has said. “Export of Ukrainian products to the EU during the reporting period increased 30.8%, to $2.967 billion. Import increased 12.1% and amounted to $1.227 billion,” she wrote on her Facebook page on Friday.
The share of the Netherlands of goods turnover between Ukraine and the EU countries was 17.6%, Spain’s – 13.7%, Poland – 13.1%, Germany – 10.8%, Italy – 10.8%, France – 5.7%, the U.K. – 4.1%, Belgium – 3.2%, Portugal – 2.9%, Hungary – 2.9% and Ireland – 2.7%.
The main products in the structure of exports to the EU are cereal grains – $1.4 billion, vegetable oils – $610.5 million, leftovers and waste from the food industry – $272.8 million, oilseeds – $177.4 million, meat and edible offal of poultry – nearly $86 million, fruits, nuts and zest – $53 million, grain products and cereals – $36.4 million, honey – $34.6 million.
The State Fiscal Service (SFS) has announced that authorized exporter status has been granted to 239 enterprises that supply goods to the European Union. “In Ukraine, 239 enterprises that export goods to the EU countries received authorized exporter status as of July 2, 2019,” the agency said on Facebook.
As explained by the SFS, these companies can process goods at customs, using a simplified procedure, that is, without issuing a EUR.1 certificate, they can independently declare the preferential origin of goods in commercial documents.
In addition, the SFS noted that a Finance Ministry order amending the procedure for granting and cancelling such status by the customs came into force on June 21 this year.
European Union Foreign Policy Chief Federica Mogherini has assured Ukrainian President Volodymyr Zelensky that the EU will continue to support Ukraine.
“The High Representative congratulated President Zelensky on his election victory and underlined that the European Union continues to stand by Ukraine, supporting the country on its reform agenda and with respect to its independence, sovereignty and territorial integrity,” an EU spokesperson said in a statement.
During their meeting in Brussels, Mogherini and Zelensky discussed possible ways to make progress in implementing the Minsk Agreements for Donbas.
“Federica Mogherini stressed that the European Union is ready to support the Minsk implementation with all available means. This can include the EU’s help in support of President Zelensky’s stated objective for an inclusive approach towards the Ukrainian citizens living in the non-government controlled areas in eastern Ukraine,” according to the statement.
“High Representative Mogherini also confirmed the EU’s socio-economic support to the Azov Sea region,” the EU spokesperson said.
“The European Union continues to expect that Russia will immediately release the 24 detained Ukrainian servicemen and return to Ukraine’s custody the three vessels,” the spokesperson said.
The sides also discussed the need to continue reforms in Ukraine.
“They look forward to continue the discussions and common work at the next EU-Ukraine Summit which will take place on 8 July in Kyiv,” the spokesperson said.
Ukraine in 2018 used 11 out of the 40 quotas for duty-free exports under the free trade area (FTA) agreement with the European Union, while export quotas for processed products from oil, sugar syrups, and an additional quota for exports of mushrooms were not used at all, according to the Ministry of Economic Development and Trade.
Ukraine has not yet received permission to export red meat, therefore its companies also did not use the quota for pork, lamb, and beef. The remaining quotas were used partially, the ministry said.
In 2018, the country fully used quotas for exports of corn, honey, corn flour and granules, grape and apple juice, processed tomatoes, processed malt and starch, soft wheat, wheat flour and granules, barley grits and starch flour, and the major quota for exports of poultry and semi-finished products from it.
In 2018, the main quota for exports of mushrooms was used by 0.03%, the quota for exports of cigarettes by 0.01%, food products by 0.9%, processed products from dairy cream by 4.2%, ethanol by 10.4%, processed products from sugar by 13.9%, milk, yoghurt and cream by 15%, barley by 16.6%, dairy products by 22.1%, milk powder by 24.1%, and oats by 36.5%.
In addition, Ukraine has used the basic quota for exports of eggs by 74.6%, and an additional one by 48.3%.
The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are opening the EU4Business-EBRD credit line with the limit of EUR 60 million to finance projects of small- and medium-sized enterprises (SME) in Ukraine, EBRD Managing Director, Eastern Europe and Caucasus Matteo Patrone said at a presentation of the project in Kyiv on Friday.
He said the credit line with a limit of around EUR 60 million is intended for SME for using opportunities opened in relation with the Deep and Comprehensive Free Trade Area (DCFTA) Agreement signed by the EU and Ukraine.
Patrone said that borrowers using this credit line will be able to receive long-term loans in the amount of up to EUR 3 million. The loans will be issued in hryvnias.
The credit line is integration from the point of geography and economy, he said. After the establishment of the DCFTA between the EU and Ukraine, local companies obtained many opportunities. The launch of the EU4Business-EBRD credit line allows local SME, which provide almost 80% of jobs in Ukraine, but generate only around 40% of GDP, to have an additional access to financing to develop, become more competitive and meet EU standards, Patrone said.
For projects within the EU4Business-EBRD credit line that will meet certain requirements, incentive grants are also provided to cover up to 15% of the cost of projects.
Patrone said that the funds under this credit line will be provided through state-owned Ukreximbank, which received the equivalent of EUR 22 million for this program, and OTP Leasing, which received EUR 10 million in equivalent. Additional credit resources of around EUR 28 million will be available for other local financial institutions to join this program.
Head of the EU Delegation to Ukraine Hugues Mingarelli said during the presentation of the project that similar credit lines are opened to Georgia and Moldova.
The EU is trying to ensure that these credit lines benefit Ukrainian SME, as well as promote economic growth in Ukraine and strengthen economic relations between the country and the EU. In 2018, exports of Ukrainian goods to the EU grew by 15%, while imports of goods from EU by 11.5%, he said. The EU believes that the DCFTA credit lines contribute to the preservation of these positive trends, Mingarelli said.
CREDIT LINE, EBRD, EU, FINANCE, SME
Minister of the Cabinet of Ministers Oleksandr Saenko expects that the next tranche from the European Union (EU) in the amount of EUR 10-20 million for governance reform could arrive in April or May 2019. “We had a very good political dialog with our European partners. They already have an official position regarding readiness to continue supporting this reform. We expect the next tranche in April-May,” he said in an interview with Interfax-Ukraine.
According to Saenko, the amount of the tranche will depend on the criteria, but according to forecasts, next year Ukraine will receive about EUR 10-20 million for this reform.
“Next year, much will change in the remuneration of civil servants. The remuneration of new reform specialists is a prototype of the remuneration model of civil servants, where the fixed part is at least 70%. This model is laid down in the law on public service. For specialists on reform issues, these parameters have already been established. We have limited the bonuses to 30%. This makes it impossible to establish sky-high bonuses,” the minister added.
Saenko said that now there is still a big imbalance in the system itself, when the position salary is minimal, and total wages and salaries increase significantly due to allowances and bonuses. This, according to the minister, creates dependence on the political biased will of the chief with all the attendant consequences.
“The new system will be more transparent and balanced, and we will gradually transfer the financing of the reform at the expense of the main programs of the ministries’ central offices,” Saenko said.
