Ukraine’s European integration

Ukraine after independence is searching place in European integration processes. Key focus of the Ukrainian foreign policy and strategic direction of recognized membership in the European Union. Ukraine’s main foreign policy priority in the medium dimension obtains the status of an associate member of the EU. The idea of the European choice positively perceived by the population of Ukraine. Eurointegration aspirations of Ukraine coincide with the need to upgrade and radical reform.

European Union since inception has gradually evolved into one of the most powerful economic, financial and political centers of the world. European integration and EU membership for Ukraine is the best way to realize national interests, build economically developed state, as well as strengthening the position in the global system of international relations.

European integration for Ukraine is the way to modernize the economy, overcoming technological backwardness, foreign investment and the latest technology, improve the competitive capabilities of domestic producers, access to world markets. Given the characteristics of the economy of Ukraine at the moment, we give a number of arguments in favor of the development of mutual cooperation between our country and the EU:

1. The European Union is large market and source products to meet the needs of Ukraine in wide variety of consumer and investment goods;

2. Trade with the EU is an important source of currency;

3. Production technologies Ukrainian enterprises lag behind those of their use of advanced European countries, our country does not have the capital required for modernization of existing and creation of new modern enterprises .Without modernizing production structures Ukraine can hardly leave the path of sustainable economic development and overcome the growing backlog of economically developed countries, which determine the direction and magnitude of the dynamics of the global economy.

4. Access to the European market of Ukrainian enterprises is of great importance as a source of experience and practical skills to compete with producers in other countries, develop and implement a strategy of industrial and commercial activities are oriented to the world market situation of the relevant markets.

5. Development of cooperation with the EU will contribute to better use of the potential of Ukraine as a transit country which means an increase in revenues from the export of transport services and the development of related industries.

6. Cooperation with the EU means that there are appropriate rules and standards development and implementation of economic police. And this, in turn, will contribute to transparent medium industrial and commercial activity in the domestic market  which is extremely important for Ukraine.

7. Development international cooperation in general and economic ties with the EU in particular directly affects more rational allocation of resources; improve the efficiency of economic processes.

The main political benefits of European integration is to strengthen stability of the democratic political system and its institutions, modernization of the legal framework, transparency of national legislation, deepen the culture of democracy and respect for human rights and the like. European integration also means strengthening national security and safety of citizens, because it excludes the use of force as a method of settling controversies solutions.

The positive dynamics of euro integration of Ukraine shows improvement in the investment climate to 2.37 points. Belief in the possibility of regulatory reform after signing an agreement even outweighed the negative of fiscal challenges, risks hryvnia devaluation and trade disputes with Russia.

Investment attractiveness index calculated by the «European Business Association » (EBA), increased for the second consecutive quarter. But if the data II quarter signaled a slight improvement – from 2.12 to 2.17 points (on a scale), the survey of executives 144 companies – members of the association in the III quarter showed a significant rise – up to 2.37 points.

The latest survey conducted in early October gave the improvement of all the basic criteria:

– Assessment of the current investment climate – from 1.7 to 1.9 points , dynamics over the past three months – from 2.2 to 2.4 and expectations for the next quarter – from 2.4 to 2.7;

– Sub indexes expectations of profitability and investment climate in the mining industry rose to 2.5 points. Improved estimates caused by change of state policy on European integration as well as the adoption of package of laws required to sign an association agreement with the EU.

According to the State Statistics Service of Ukraine on January 1, 2014, foreign direct investment made in the Ukrainian economy since the beginning of the investment amounted to 58.157 billion U.S. dollars

Including the fourth quarter of 2013 compared to the third quarter net inflow of investments amounted to 1.592 billion U.S. dollars, and the number of investors has decreased by 2 countries – to 136.

At year end, the major investors in Ukraine are countries such as Cyprus – 19.036 billion (an increase of 1.73% in the fourth quarter), Germany – 6.292 billion (1.57%), the Netherlands – 5,562 billion dollars. (1.05%), Russian Federation – 4.287 billion (11.58%), Austria – 3,258 billion (1.31%), United Kingdom – 2,714 billion (a decrease of 0.37 %), British Virgin Islands – 2,494 billion (an increase of 1.71%), France – 1.826 billion (down 0.92%), Switzerland – 1.325 billion (an increase of 3.68 %), Italy – 1.268 billion (0.71%). These countries account for almost 83% of total direct investment.

According to the State Statistics Service of Ukraine the total volume of foreign direct investments into the Ukrainian industry is 18.013 billion or 31% of the total volume in the establishment of financial and insurance activities – 15,349 billion or 26.4%, on the enterprises of trade and repair of motor transport – 7.560 billion or 13.0%, in the real estate market – to 4.371 billion or 7.5%, in the scientific and technical activities – 3,448 billion or 5.9%.

It would be a mistake to downplay the complexity of the process of European integration. This process will be long and difficult. In this inevitable enough painful consequences for some sectors, industries and even regions. However, the potential benefits and achievements of European integration exceed the losses and risks. It was conclusively proven previous experience of all European countries, without exception, including those of economic development level was below the mean.