On first trip abroad, Denys Shmyhal visits Brussels to receive coronavirus assistance loan.
Ukrainian Prime Minister Denys Shmyhal says he is happy with a loan not a grant.
Shmyhal, a 44-year-0ld economist and former governor of Ivano-Frankivsk in western Ukraine, will be in Brussels on Thursday — his first trip abroad since being confirmed by parliament in early March, just as the coronavirus lockdowns halted global travel. He will meet with European Commission Executive Vice Presidents Frans Timmermans and Valdis Dombrovskis, and will also formally accept a €1.2 billion emergency loan related to the pandemic.
The visit comes just two days after EU leaders wrapped up a marathon summit in which they fiercely debated the relative merit of grants versus loans in a €1.82 trillion budget-and-recovery package. And Shmyhal, perhaps counterintuitively, echoed some of the arguments the EU’s so-called frugal countries had made against grants, saying the obligation to repay creates greater incentives for a beneficiary country like Ukraine to carry out demanded reforms.
“Perhaps on the level of inter-country relationships, it would not be fully comprehensible,” Shmyhal said in an interview by videoconference before leaving Kyiv. “Because the party which is expected to give a grant would not be fully understanding why it should disburse it in the first place, whereas the other party receiving the grant will feel much more relaxed in not doing what it should.”
The prime minister added, “Credits and loans have already long been established as a viable and effective mechanism in building up relationships and cooperation between countries.”
Shmyhal has more than a bit of motivation for wanting to convince EU leaders that Ukraine lives up to its obligations. The new loan will bring total macro-economic financial aid to Ukraine to €5 billion since 2014, the largest amount the EU has ever provided to a single partner country.
Shmyhal told POLITICO he wanted his first trip abroad as prime minister to be “to the capital of the European Union” as a symbol of Ukraine’s Westward trajectory, and its commitment to its political and trade agreements with the EU — a gesture that was well-received in Brussels.
But the trip also comes amid some recent controversies in Ukraine, including the resignation earlier this month of the country’s central bank governor, which have raised questions among EU officials about the competence of President Volodymyr Zelenskiy, a former comedian and television star who never served previously in public office, and about his administration’s ability to carry out much-needed governmental reforms.
The governor of the National Bank of Ukraine, Yakiv Smoliy, resigned on July 1 citing “systematic political pressure.” His departure sparked widespread international concern, including from the International Monetary Fund. Smoliy’s predecessor, Valeria Gontareva, resigned in 2017 after receiving repeated death threats, which she blamed on a Ukrainian oligarch, Ihor Kolomoisky (allegations he denies).
Kolomoisky is the former owner of PrivatBank, which was nationalized after the government said he defrauded it of billions, and also a supporter of President Zelenskiy.
In the interview, Shmyhal denied the government had put pressure on Smoliy, and said Zelenskiy had named a competent successor, Kyrylo Shevchenko, with 25 years of experience in the banking sector. Shmyhal said the bank’s independence was protected by the constitution.
“One has resigned, the other was appointed, this is what happens in life,” Shmyhal said. He added that Shevchenko would be part of the delegation to Brussels on Thursday.
On Saturday, the Ukrainian parliament approved a law to support renewable energy, including a reduction in tariffs, aimed at ending a long standoff between the government and foreign investors. The European Bank for Reconstruction and Development had issued a statement expressing serious concern over the situation.
Shmyhal said Ukraine was grateful for EU sanctions against Russia as punishment for the 2014 annexation of Crimea, and for the EU’s support against Russian military aggression in eastern Ukraine. He said the Ukrainian government was pushing hard to make reforms to bring the country up to EU standards, and to improve citizens’ quality of life.
“What is very important for me as the prime minister is to give a clear-cut message to our European partners and counterparts as regards to the intentions of Ukraine to Europe to integrate and move toward NATO,” he said. “These are the issues that are clearly stated in our constitution of Ukraine and these are the issues which are clearly engraved on my mind and in my heart.”
Kalina Oroschakoff contributed reporting.
Source: POLITICO https://www.politico.eu/article/new-prime-minister-denys-shmyhal-sees-ukrainians-pushing-for-eu-way-of-life/?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication