Editor’s Note: Olena Tregub, a freelance contributor to the Kyiv Post, conducted a series of interviews with German experts on Ukraine. The following is one of them.
Lars Handrich is managing director at DIW econ, a German consulting company. From 2001 to 2009, he was a member of the German Advisory Group on economic reforms to the government of Ukraine.
Kyiv Post: How would you assess the results of President Viktor Yanukovych’s first year of presidency in comparison to those of the previous Orange leadership?
Lars Handrich: President Yanukovych has concentrated political power in his hands. The parliament is marginalized, the political opposition feels repression, his opponent from the last elections is put on trial on bizarre allegations. As regards economic reforms, the president presented an ambitious economic reform plan just weeks after he came into office. Currently the biggest challenge is the reform of the pension system. Pensions are at the level of 18 percent of gross domestic product, one of the highest levels in the world, while the deficit of the pension fund is at 7 percent of gross domestic product. This situation requires swift and decisive reforms.
KP: Should the EU use negotiations on an association agreement, a deep free-trade agreement and on a visa-free regime as leverage to promote political and other reforms in Ukraine, or should these agreements be signed as soon as possible?
LH: Of course, the EU should use the leverage it has. Such a strategy has always been helpful in promoting domestic reforms in countries like Ukraine. Without the decisive pressure of the EU, most of the new EU member countries would not have made it into EU.
KP: Could and should the current pro-Russian German position be replaced by a pro-Ukrainian position? To what degree may domestic political changes in Germany play a role for its future Eastern policy positions?
LH: Possible domestic changes in Germany are unlikely to change the Germany position with regard to the Eastern partners of the EU. The key to improved relationships lies respectively in Moscow, Minsk or Kyiv.
KP: Do you have any specific advice for the Ukrainian government to change Ukraine’s image in Germany for the better, and improve Ukraine’s attractiveness for German investors?
LH: For investors, Ukraine will become attractive as a result of reforms of its economy, the reduction of corruption and bureaucracy.
KP: Did the decision of prosecutors to investigate former President Leonid Kuchma for involvement in the murder of a journalist add credibility to the current government and improve its image in the West? What are your expectations about how this case should be resolved?
LH: Prosecuting predecessors with methods alien to the Western understanding of rule of law is unlikely to improve any image or increase credibility.
KP: Do you think Ukraine will ever enter the EU, and, if so, under what conditions and when approximately?
LH: Ukraine’s current political leaders do not share European values, and that concerns not only the political system and rule of law. The economy is not competitive and most firms would not survive the pressure of the common European market. But one should never say never.
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