Ukraine and Germany: would this friendship grow into serious relations? (Part 3)

Author : Serhiy Solodkyi Aliona Hetmanchuk

10:13, 15 February 2016

Ukraine and Germany: would this friendship grow into serious relations? (Part 3)

Author : Serhiy Solodkyi Aliona Hetmanchuk

Germany has firmly entrenched in the top three partners of Ukraine, together with the U.S. and Poland

10:13, 15 February 2016

Read the original text at Evropeiska pravda (part 3)


Related: Ukraine and Germany: would this friendship grow into serious relations? (Part 1)

Related: Ukraine and Germany: would this friendship grow into serious relations? (Part 2)

Reforms and German support

Berlin can provide Ukraine not only with financial resources, but also it can provide consulting support or even involvement at the level of political declarations.

The survey, carried out by GFK Ukraine in October 2015, demonstrated a significant request for EU assistance. One third of Ukrainians believe that the EU should perform more pressure on Ukrainian authorities, while only 9% Ukrainians are waiting for more financial support from the EU.

Today Germany belongs to the countries that allocate a lot of money for reforms in Ukraine (as well as the U.S. or the EU as a whole). At the end of 2015, Berlin stated about allocation of 136 million euros, 20 million of which are non-repayable funds for technical projects.

The German government has developed a plan of action unambiguous support to Ukraine. Eight state secretaries of ministries and departments visited Ukraine to find common ground in cooperation at the interministerial level. A working group on Ukraine, which includes eight people, has been established in the German Foreign Ministry.

However, Germany reacts to the controversial idea of ​​a "new Marshall Plan" (or the Merkel plan) for Ukraine.

"We are waiting for the plan of Kolomoisky, Firtash, Akhmetov, and Taruta. We cannot give money non-stop," it was a reaction of a German official.

In September 2015, CDU/CSU announced the actual strategy to support Ukraine. This document is not binding; it is likely that it knows of only a small part of the deputies of the ruling party. However, it is important that in Germany there are politicians who realize the importance of support of Ukrainian reforms.

If the document was the program for action, Ukrainian-German relations could be considered as a higher level of partnership.

The main idea of ​​the document is that support of Ukraine’s reform efforts is a vital priority of Germany and of the EU as a whole.

There are many reasons to explain why the document was not effective mechanism even for CDU/CSU, but there can be no justification for the Ukrainian elites who even tried to convince German colleagues put the document as a basis for further cooperation.

The document may lie in the foundation of building relations between the two countries if Ukraine is be able to pick up the initiative of the CDU/CSU.

The task maximum is to show expected results in reforms, especially in fighting corruption; task minimum is to intensify intergovernmental and inter-parliamentary contacts.

German investor as a strategic investor

Germany is one of the largest investors in the Ukrainian economy.

After signing the Association Agreement, Kyiv had high hopes on investments of German companies. However, Ukraine still has not become a magnet for important business projects. First of all, it is because of internal instability. Another obstacle is corruption.

Risks associated with the possible loss of investment, exceed expectations for profit. Thus, in 2014 the level of direct investment in Ukraine fell by 91% - to 410 million US dollars, to the lowest figure for 15 years.

This rapid decline cannot be explained only by corruption component, which characterized Ukrainian business climate throughout the period of independence. Obviously, the main reason was Donbas conflict.

In addition, it would be difficult to find the investors due to negative global trends. The most significant investment flows go now to Asian countries.

German partners pay attention: their investors extremely cautious, and therefore do not invest new money; but it is important that the "old" investors are closing their business in Ukraine.

However, investors continue to complain about corruption in Ukrainian state machine. There are complaints about overregulation, very positively German businessmen respond on the reform of the banking sector. And there is distrust of major institutions facing the business - the judiciary, tax authorities, customs.

Without reforming these institutions, there would be no foreign investors in Ukraine.

Who is who? Interest groups in Ukraine and Germany

Four years ago, only one in ten Ukrainian called Germany a trategic ally. At the end of 2015 the number of such Ukrainians actually increased twice.

24% of Ukrainians think Germany is one of the three strategic allies of Ukraine. Germany just ahead of the U.S. (39.1%) and Poland (34.2%).

It is significant that four years ago the biggest hopes were placed in this regard on Russia (40.2%) and Belarus (25.9%).

The first place of the United States and Poland are quite expected. Why Germany is among them? Obviously, the reason is Berlin’s efforts after the beginning of the aggression of Russia against Ukraine.

Among German citizens we can also see corresponding change in sentiment caused by the war.

In March 2014 the majority of Germans opposed the first sanctions against Russia - only 38% supported such a move, 77% of Germans were against the exclusion of Russia from G8. Last year, in February 2015, the hard approach to Moscow supported 65% of Germans and 31% were against.

However, Germany beats record in terms of unavailability to support Ukraine in response to Russian aggression.

According to a survey by Pew Research Center, 77% of Germans are against it.

However, most of Germans support the sustainable provision of economic aid to Ukraine – according to the polls in 2015, two thirds of Germans were in favor of supporting this country.

Relative majority of young Germans (compared to other age groups) believe that Ukraine is a part of Europe (40%). It would sound like an obvious fact, but many EU countries do not choose this option.

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