When the Kyiv Post interview turned to whether Ukrainian President Petro Poroshenko is one of the “good guys” or “bad guys” — meaning is he a genuine reformer or not, Hugues Mingarelli avoided the question the first time.
When asked a second time whether he thought Poroshenko is acting in the interests of the Ukrainian nation or serving the oligarchs, the European Union ambassador to Ukraine put the president in the “good guy” camp.
“My feeling is yes,” Mingarelli, a French citizen who has represented the 28-nation bloc in Ukraine since September, said.
Any hesitation or tentativeness from Mingarelli is understandable to Ukrainians and foreigners alike. Polls show that most Ukrainians put Poroshenko in the anti-reformer camp while a fervent minority think he’s doing a wonderful job.
More than three years after the EuroMaidan Revolution that drove President Viktor Yanukovych from power on Feb. 22, 2014, big lists can be drawn up of the nation’s accomplishments and failures.
Establish rule of law
In fact, the list of failures is shorter but no less serious: Ukraine has failed to combat corruption and establish rule of law.
This is why the fundamental questions about Ukraine’s future as either a modern European democracy or backwater post-Soviet oligarchy involve the morality and motivations of Ukraine’s political leadership.
While not a publicity hound, the French national Mingarelli has distinguished himself in 10 months of service — replacing Poland’s Jan Tombinski — as a veteran E.U. official who is not afraid to speak his mind if he thinks it will help.
And so he does on the question of why Ukraine attracts paltry amounts of investment to power its small and sluggish economy.
“Ukraine has exceptional assets to attract foreign or even direct investments. These extraordinary assets are: a very highly skilled population, a long industrial tradition — these people have been producing satellites, airplanes and missiles for decades, exceptional land, exceptional location, big size, a big market,” Mingarelli, a 30-year EU veteran, said. “But foreign direct investment is still not there and investors do not come for one main reason — the absence of rule of law, which some people call corruption.”
The prescription is simple yet hard for Ukraine to achieve.
“Reduce corruption and increase rule of law to levels comparable to European countries and this country will get the maximum level of foreign direct investment and be a prosperous country,” Mingarelli said.
To do that, Ukraine needs to transform its judicial system, making the law enforcement institutions effective, independent and trusted. Without an anti-corruption court and a new slate of judges, he said, rule of law is not possible in Ukraine.
Fight oligarchy
One of Mingarelli’s more apt assessments is worth repeating time and again.
“This country has been a cash machine for about 10 or 15 people and the whole country has been shaped for the benefit of these people,” Mingarelli said of Ukraine’s elite. He felt no need to call out the oligarchs by name, telling the Kyiv Post “you know the names” and that they track with the rankings of richest Ukrainians.
“The economics of the country and society have not been shaped for the benefit of the collective, like in most countries,” Mingarelli said. “It has been to the contrary. It has been shaped for the benefit of a few people and the collective was basically totally ignored. This is a terrible legacy.”
This legacy will take time to undo. It will also take commitment from the people and politicians, a strong civil society and international backing to transform.
A starting point would be justice against those who are guilty of crimes against the state, he said.
“We cannot say it’s in the past and we can forget about it,” the ambassador said of Ukraine’s history of unsolved crimes and unpunished corruption. “Those who have stolen from the country should be brought to justice and pay for it. Otherwise, you cannot rally the citizens behind the reform process. You cannot expect people to accept (difficult reforms) unless you take the necessary steps to punish people who have been stealing all these years.”
Ukraine has taken giant steps towards the European Union this year, gaining visa-free travel and ratification of a political and free trade agreement. But the Russian bear is always next door – and sometimes in Ukraine’s yard, as in Crimea and parts of the eastern Donbas.
This is why he said that the E.U. is closely watching what happens to ex-State Fiscal Service chief Roman Nasirov, accused of robbing $74 million from the state by abusing his tax powers, and ex-lawmaker Mykola Martynenko, who allegedly embezzled $17.3 million through an agreement to sell uranium at inflated prices to a state-run plant.
“It’s important that Nasirov and Martynenko can go through a really fair process where Ukrainian citizens can realize there is now justice in the country,” MIngarelli said. “It’s very important, not for the sake of revenge, but to rally people to reestablish trust or confidence between the people and the political leadership.”
No increase in sanctions
The West, including the U.S. and the E.U., have shown remarkable patience and unity with trying to persuade Russia to call off its three-year war against Ukraine and return the Crimean peninusula, stolen in 2014.
There is no end in sight to Russia’s war, which has killed 10,000 people and displaced 1.5 million people. The Kremlin is not honoring any of the key elements of the 2015 Minsk peace agreement — namely a cease-fire, withdrawal of troops and weapons and return of eastern borders to Ukrainian control.
While the E.U. is likely to stick to the current economic sanctions against Russia, including bans on short-term credit and some types of investment, Mingarelli said he’s seen no political support for tougher sanctions.
“I haven’t heard anybody says sanctions should be removed,” Mingarelli said. “The Minsk agreement has stalled.” At the same time, “now a large number of member states consider the current sanctions are enough.”
The Ukrainian passport became much more powerful when visa-free travel with most nations in the European Union took went into effect on June 11. Ukrainians can now travel to 119 nations of the world visa-free or by receiving visa upon arrival, putting Ukraine ahead of Russia in the ranks of privileged world travelers. (Stella Shabliovska)
No illusions
Mingarelli said that he also doesn’t see “any change” in Russian behavor, attitudes, and military activities.
“Their objective is to prevent the modernization of this country and a direct rapprochment with the E.U. that turns Ukrainian society into a European, Western society,” he said. “It’s clear that some in Russia do not accept this decolonization process.”
Spurring trade
The goal of transforming Ukraine into a European democracy requires greater economic prosperity. Ukraine has a big tool to achieve wealth — a free-trade agreement with the E.U. among other nations, including Canada.
However, with the E.U. at least, Ukraine is lagging in adoping the standards, norms and regulations required to trade freely (or with low tariffs) to the 28-nation bloc.
Instead of implementing those standards, Ukrainians tend to complain about low duty-free export quotas for many products. Ukrainian reaches its quotas early in the year for many agricultural products, such as honey. After that, however, the tariffs on Ukrainian exports are applied by the E.U. in line with World Trade Organization standards.
The E. U. is close to raising duty-free quotas on 16 products, Mingarelli said. “Ukraine will be allowed to export more fertilizer, wheat, maize, oats, tomatoes, without paying customs duties,” he said.
But he said that quotas are not the major impediment to increasing Ukraine-E.U. trade. While the E. U. collectively has replaced Russia as the nation’s top trade partner, as an individual nation Russia remains Ukraine’s top investment, export and import partner.
“The main issue is norms and standards,” Mingarelli said. “When Ukraine has adopted the bulk of norms and standards, they will be part of the E.U. single market. For them it is really, really important. They have everything — skilled labor, low labor costs, an industrial tradition, quality agricultural land, location at the center of Europe. What more could you dream of?”
How E. U. helps
The E. U. has made no secret of its expectations for Ukraine. More precisely, E.U. leaders have told Ukraine’s leaders to do more on reform if they expect more financial assistance.
By that measure, Ukraine is doing so-so.
While some are promoting an ambitious “Marshall Plan” aid program to pump billions of euros into Ukraine, named after the U.S.-funded reconstruction program of post-World War Europe, the reality is far less grandiose.
The E. U. has offered something in-between — 3.4 billion euros in macrofinancial assistance since the EuroMaidan Revolution that deposed President Viktor Yanukovych in 2014, along with 250 million euros in annual grants and another 50 million euros in humanitarian assistance.
The E. U. has expertise in many areas that Ukraine could benefit from — including decentralization, privatization, civil service, development of independent journalism — especially a public TV broadcaster — and in many other ways.
European Union Ambassador to Ukraine Hugues Mingarelli talks with the Kyiv Post in his office on June 6 in Kyiv. (Volodymyr Petrov)
In this transformation, he emphasized, Ukrainians must set the democratic agenda themselves. The E. U. will then be glad to support.
“The main engine of reform process has to be the Ukrainian people,” he said. “We are a force that backs reformers at the right moment.”
Clearly, the battle is on.
“There is no doubt there is a daily struggle between those who try to reform the country and those who try to keep it as it has been in the first years of independence. We see this daily struggle in the ministries and in the Rada,” Mingarelli said. “My sense is up to know the reformers have managed to push the country in the right direction at a very slow place and not in a linear way.”
Pick up pace
He said that he worries about the patience of the Ukrainian people running out.
“How long can they stand this level of suffering and this bloody difficult life?” he asked. “This is the risk. We know that populists win elections precisely because of this level of suffering.”
On balance, and on the strength of Ukraine’s vibrant civil society, Mingarelli said: “I still have the feeling society is moving in the right direction towards Western standards when it comes to establishing an open and democratic society. I cannot tell you what the end result will be. I am optimistic.”
