Back in the 19th century, French was the language of high society in Ukraine, then part of the Russian Empire. Even some shop signs in Kyiv’s oldest Podil district were written in French, then the lingua franca across Europe.
French language disappeared from the streets and salons together with the Russian-Ukrainian upper class – either annihilated by the communist upturn in 1917 or through emigration, in many cases, to France.
Now, France contributes to Ukraine in a variety different ways, from investment to culture. The French community’s leading members in Kyiv run banks and restaurants, organize cultural events and film festivals.
There are around 1,000 French people in Ukraine, who celebrated their national holiday, Bastille Day, on July 14.
Many find similarities between the two countries. Similar in size, but on the different sides of Europe, France’s industrial Lyon is in the east like Donetsk, Paris is in the north like Kyiv and Marseille, France’s largest commercial port on the Mediterranean, is in the south just like Odesa on the Black Sea.
The people also share certain traits.Dominique Menu, a leading banker and founder of the Association of French Entrepreneurs (ACFAU), attributes the good understanding between the two nations to the “peasant origin” that both courtiers share. France still uses three-fifths of its land for farming and is a leading producer of beets, wine, milk, and meat in Europe.
“Both are conservative, thrifty, value family links and often have grandparents who connect them to the village. Both take time to know the person before opening up and learn how to read between the lines,” Menu added.
A couple enjoys French wine during the Bastille Day reception in Kyiv on July 13. Oleksiy Boyko
Cultural rendezvous
With the French language now ousted by English as the must-have second language, the French seek to win the hearts of Ukrainians with their culture.
There are no fewer than six French film festivals throughout the year, Francophonie – a week dedicated to French language and culture – and the French Spring cultural festival that brought movie star Juliette Binoche to Kyiv this year.
“I feel that French films are well-received in Ukraine. We laugh and cry at the same things,” said Emmanuelle Faucilhon, a cultural attache at the French Cultural Center (Institut Francais d’Ukraine).
The cultural center and Alliance Francaise, a language-teaching center, teaches French to studentsin 10 Ukrainian cities.
Around 300-400 Ukrainians apply to French universities every year. Scholarships for Ukrainian students comprise one-third of all the money spent on cooperation projects between the two countries.
Powerful banking
French businessmen came to Ukraine in the early 1990s as the country opened up. They are now hard-hitters in the industrial sector with Lafarge, in dairy production with Lactalis and Danone, in retail and Auchan in agriculture.
With $1.64 billion of investment to Ukraine in 2009, France is among the top investors in the country’s economy.
The sector where the country is most involved is banking, which makes up 70 percent of its investment to Ukraine.
Ukrsibbank was taken over by French giant BNP Paribas in 2005, Credit Agricole’s Index Bank with a focus on agribusinesses, and Societe Generale’s ProFin bank in Donetsk, on the market, French banks account for 10 percent of the banking sector of the country.
Banker Menu led BNP [now BNP Paribas] through the thorny path of Ukraine’s economy. The bank opened its first office in Kyiv in 1992. It shut down operations in 2001 when BNP merged with Paribas.
“Hard hit by the 1998 currency default in Russia, Ukraine was not seen as a priority at that time,” explained Menu.
Menu said one of the most serious problems in Ukraine is outdated and conflicting legislation, which was particularly harmful during the crisis.
“The mere absence of hedging, which was banned by Ukraine’s National Bank, made it impossible for the companies to protect themselves against currency fluctuations. Some lost up to 50 percent of their money when they invested in dollars and converted to hryvnias during the crisis,” said Menu.
Menu visited Ukraine for the first time in 1984 when he toured for Sputnik, then one of the few international travel bureaus in the Soviet Union. His majors included Soviet studies. While learning Russian as an exchange student living in a Moscow dorm, Menu learned how bureaucracy and freedom of speech work.
“Even in business, people still try to figure out what you want them to say, rather than saying directly how things really are,” Menu said.
Farming potential
With Ukraine home to 27 percent of all European farmland, agribusiness should be the country’s main asset. France has extensive experience in agriculture and is eyeing the sector, but investments are currently scarce.
Investors are still deterred by expensive loans, the lack of storage facilities and the absence of a futures market that would allow selling crops before they are gathered.
But there have been some positive signs recently. “When Ukraine’s central bank recently allowed bankers to give loans on collateral of the future crops it showed its readiness to help,” said Jean-Jacques Herve, an expert on agricultural issues at Index Bank, a part of France’s Credit Agricole group, which plans to increase the number of its loans to agricultural producers from 20 to 50 percent of its credit portfolio.
Michel Terestchenko the founder of Linen of Desna, a flax-growing and processing group that employs 250 Ukrainians, sees Ukraine as a possible world leader.
“It has all it takes – the climate is perfect,” Terestchenko enthused.
Terestchenko is the grandson in one of Ukraine’s best-know dynasties of sugar-producers and donors of 19th and 20th centuries in Kyiv. His grandfather served as the last finance minister in czarist Russia, before he escaped to France when the Bolsheviks seized power.
Surprisingly perhaps, Terestchenko said he finds bureaucracy in France worse than in Ukraine.
“Ukrainians are indeed very creative when they think up laws. But they are even more creative when they get around those regulations. There are so many of them one simply can’t satisfy all,” he said.
An EU future?
Unlocking Ukraine’s business potential will come when overhauls are carried out to bring the country closer to Europe.
Benoit Barrier, founder and head of software producer Atemis in Ukraine for the last three years, said his sector is currently in the embryonic stage.
“It will develop when companies seek traceability and accountability, which will be the case if Ukraine enters the European Union,” Barrier said.
Ukraine is currently in talks on an association agreement with the EU, backed by France. The agreement foresees the deep free trade agreement and visa-free travel, but leaves the prospect of joining the 27-nation club in uncertainty.
Moving toward the EU while maintaining good relations with Russia is often seen as a difficult path for Ukraine to tread. But Terestchenko sees the United Kingdom, France’s northern neighbor, as a good example to follow.
“Look at the United Kingdom – the best friend of the United States and an EU member. Ukraine should be like the UK – the best friend of Russia and yes, a part of the European Union.”
Kyiv Post staff writer Kateryna Grushenko can be reached at [email protected]
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