Business news from Ukraine

POSSIBLE INTEGRATION INTO EU DIGITAL SINGLE MARKET TO RESULT IN GDP GROWTH OF 2.4-12.1% – STUDY BY UKRAINIAN MINISTRY

The gradual approximation of the regulatory environment and digital development of Ukraine to the level of the European Union as part of integration into the EU Digital Single Market will affect the productivity and economic growth of the country, according to a Tuesday statement on the website of the Ministry of Digital Transformation.
The study entitled “Ukraine’s integration into the EU Digital Single Market: potential economic benefits” was carried out by the Trade+ Center for International Trade Analysis at the Kyiv School of Economics and NGO Ukrainian Center for European Policy and was ordered by the Ministry of Digital Transformation.
The results of the study contain expert assessments and real calculations of the potential profit for the country’s economy from integration into the EU Digital Single Market.
According to the study, the gradual approximation of the regulatory environment and digital development of Ukraine to the EU level within the framework of integration into the EU Digital Single Market will influence bilateral trade: an increase in exports of goods from Ukraine to the EU is expected by 11.8%-17% ($2.4-3.4 billion), services – by 7.6%-12.2% ($302.5-485.5 million).
It will also impact the productivity and economic growth of Ukraine: GDP growth in Ukraine is expected at the level of 2.4-12.1% ($3.1-15.8 billion), the welfare of citizens – by 3.6-7.8%.
It is also expected that the export of goods from the EU to Ukraine will grow by 17.7-21.7% ($4.1-5 billion), and services by 5.7-9.1% to ($191-305 million).
According to the study, an increase in the level of digitalization by 1% will lead to an increase in Ukraine’s GDP by 0.42%.
“Various scenarios of integration into the EU Digital Single Market show that the size of potential benefits will depend on the scale of regulatory and digital transformations in Ukraine. The faster and more efficiently we implement the necessary transformations, the faster we will be able to realize the benefits of integration into the EU Digital Single Market,” Deputy Minister of Digital Transformation for European Integration Valeria Ionan said.
According to the study, the main economic benefits for Ukraine from integration into the EU Digital Single Market are: reduction of transaction and trade costs in trade in goods and services between the EU and Ukraine; growth of business efficiency, economic productivity and GDP of Ukraine; growing well-being of citizens of Ukraine and the EU: better access and lower prices for digital innovative goods and services, consumer protection; development of innovative products and services of digital infrastructure.
In addition, bringing Ukraine’s legislation and standards closer to EU legislation and standards will reduce regulatory differences between Ukraine and the EU in the digital sphere and accelerate Ukraine’s digital development.

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UKRAINE AND BRUSSELS AGREE ON FURTHER ECONOMIC INTEGRATION

Ukraine and the European Union have agreed on further economic integration and regulatory convergence in a number of areas.
A joint statement by the leaders of Ukraine and the EU, adopted at the end of the summit in Brussels on Tuesday, says.
“We looked forward to further enhancing economic integration and regulatory approximation within the framework of the Association Agreement in the following fields: on digital, we took note of the on-site assessment of the implementation of Ukraine’s commitments in the AA/DCFTA. We also discussed the EU’s engagement in further supporting Ukraine and its institutions in approximation with and gradual implementation of the EU Digital Single Market acquis and institutional capacities, to fully benefit from the Association Agreement. We agreed to prepare by the end of 2020 a joint working plan for co-operation between EU and Ukraine on electronic trust services with a view to a possible agreement which must be based on approximation to the EU legislation and standards,” the statement reads.
The leaders welcomed progress on the update of the Annexes on telecommunication, environment, climate and financial cooperation of the Association Agreement. “Welcoming Ukraine’s ambition to approximate its policies and legislation with the European Green Deal, we stressed the importance of progress in Ukraine’s commitments in the areas of climate change, environment, marine ecosystem, education, energy, transport and agriculture, building on existing established sectoral dialogues, and agreed on a focused dialogue on the necessary steps in these areas,” the statements says.
In addition, they acknowledged the importance of fully complying with DCFTA commitments, notably in the areas of intellectual property rights, public procurement, trade defence, and sanitary and phytosanitary standards with a view to building an open and predictable business and investment climate in Ukraine. “We agreed to further discuss and review the ways to improve DCFTA implementation in order to further develop and facilitate bilateral trade,” the leaders said.
They also welcomed the launch of the pre-assessment on Ukraine’s preparedness on an Agreement on Conformity Assessment and Acceptance of Industrial Products.
The EU also welcomed Ukraine’s willingness to associate to the incoming EU’s Research and Innovation Framework Programme Horizon Europe and EU4Health Programme, which will be a significant enabler for green and digital post-COVID recovery.
“We recalled the importance and reaffirmed our commitment to concluding the Common Aviation Area Agreement at the earliest possible date,” the statement notes.
What is more, the EU reaffirmed Ukraine’s role as a strategic transit country for gas and welcomed the agreement on gas transit to the EU after 2019. “We underlined the importance of pursuing the modernization of the Ukrainian national gas transmission system and further cooperation on strengthening European energy security. We stressed the importance of Ukraine’s cooperation with the EU, with a view to its integration with the EU energy market based on effective implementation of the updated Annex XXVII of the Association Agreement as well as coordination of further steps for the integration of gas and electricity markets,” it says.
The parties also agreed to improve connectivity between Ukraine, the EU and other countries of the Eastern Partnership with a view to facilitating trade, further developing safe and sustainable transport links and supporting people-to-people contacts.
“We welcomed the participation of Ukraine in EU programmes and underlined the importance of Erasmus+ for education, training, youth and sport and Creative Europe for culture. We looked forward to intensifying the relevant cooperation in the framework of current and future programmes,” the leaders said.

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46% OF UKRAINIANS SUPPORT EU INTEGRATION

Some 46.1% of Ukrainians believe that the country should strive to join the European Union, 13.1% in the Eurasian Economic Union, while 28.3% do not want Ukraine to join any economic alliances.
Those are the results of a survey conducted by the Kyiv International Institute of Sociology (KIIS) from April 26 to April 30 and presented at the Interfax-Ukraine agency.
Survey results show 41.9% of Ukrainians believe that Ukraine should strive to be a NATO member, 34.7% – a neutral state and 12% – a member of the Collective Security Treaty Organization.
If offered U.S. or EU citizenship, 27.1% said they would leave the country to live there, while 65.1% would remain in Ukraine. Only 6.3% said they would leave for Russia. Some 86.3% said they would refuse to relocate to Russia. Offered a “bonus” of $100,000, 11.2% of respondents said they would move there.
The KIIS survey was conducted from April 26 to April 30, 2020 using the CATI method (computer-assisted telephone interviews) based on a random selection of mobile phone numbers. Some 1,500 interviews were included in the survey.
The sample is representative of the adult population of Ukraine (aged 18 years and older). It does not include Russia-occupied areas in Donbas and Crimea. The statistical error of the sample (with a probability of 0.95 and without taking into account the design effect) does not exceed 2.6% for indicators close to 50%, 2.2% for indicators close to 25%, 1.7% for indicators close to 10% and 1.1% – for indicators close to 5%.

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INTEGRATION OF UKRAINIAN POWER GRID WITH EUROPEAN NETWORK IS STRATEGIC DIRECTION OF COOPERATION

The harmonization of the Ukrainian power grid with the European Network of Transmission System Operators (ENTSO-E) is a strategic direction of cooperation between Ukraine and the European Union (EU) in the electricity sector, Director General of the Directorate-General for Energy of the European Commission Dominique Ristori said at a press conference in Kyiv on Friday. He said that for the merger of the power grids additional studies of static and dynamic stability are to be conducted and some technical measures are to be taken to ensure the full integration. Amendments to the market legislation and integration of the power grids should move as synchronously as possible.
As reported, in June 2017 Ukrenergo Head Vsevolod Kovalchuk signed an agreement on the conditions for the future integration of the energy systems of Ukraine and Moldova with ENTSO-E. In July the agreement came into force after it had been signed by the necessary number of European system operators.
The deadline for Ukraine’s fulfilling the requirements for accession to the united energy system of continental Europe is July 2022.
The document consists of three main parts: a catalog of requirements (unconditional fulfillment of which is necessary for making a decision on the merger of the power grids); a list of necessary additional research; and a road map.

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