Europe Day’s Ukrainian dimension. Why Ukraine is important to the EU

The key thing that connects Ukraine with Europe is values.

Europe Day, which Ukraine is celebrating together with the European Union for the second time on 9 May, embodies our most important aspirations – unity and peace. Ukraine has consistently demonstrated its commitment to these goals on its path to European integration.

As a full EU member, Ukraine will undoubtedly become stronger – there is no doubt about that.

But Ukraine’s integration will also strengthen the European Union itself. Today, on Europe Day, I’m going to answer the question “How?”

Over the past year, the EU has published several studies on Ukraine’s future integration. The main conclusion is that despite the full-scale war, there is still significant potential for growth, and Ukraine has several areas through which we can significantly strengthen the European Union.

Let’s take a look at them.

Investment in the EU’s common security

When Ukraine joins the EU, it will have one of the largest armies, with combat experience in resisting full-scale aggression from a country that has a significant advantage in terms of personnel, resources and funding.

Ukraine will strengthen the EU with its many years of experience of effective self-defence against Russia, a known expert in fuelling regional military conflicts and planting and spreading propaganda worldwide.

The current war in Ukraine is the largest in Europe since World War II. Ukrainian military personnel now have practical experience of working in real combat conditions with a variety of tools and techniques that no other country in Europe – or even the world – possesses.

Even now, our IT specialists can be extremely useful to the EU in the field of cybersecurity and the application of cutting-edge technologies. Our strategic communications experts have unique expertise in countering Russia’s propaganda machine and constant psyops.

NATO is already changing its approaches and adapting its strategy in line with Ukrainian combat practice, while the EU is rethinking its defence industry’s strategy and objectives.

Both organisations’ security strategies are unthinkable without Ukraine. Those are not mere words. The Ukraine-EU Defence Industries Forum was held in Brussels this week. As a result, a decision was made on the possibility of using the European Peace Facility to compensate EU member states for the costs they incur in purchasing weapons for the Defence Forces from Ukrainian manufacturers.

The largest transport hub in Europe

Ukraine could expand Europe’s logistics network eastward, becoming a new transport hub within the Europe-Asia transport corridors. In particular, maritime transport is extremely important to the European economy. Joining the EU single market will help Ukraine to realise its potential as a transit country.

Experts have estimated that before the full-scale war, Ukraine’s ports operated at only 50% of capacity, with huge potential to increase throughput. At the moment it is almost impossible to realise this potential due to constant Russian attacks. Yet even in these extremely challenging conditions, Ukraine’s ports continue to function. The Ukrainian corridor has enabled 33.8 million tonnes of agricultural products to be exported since it was set up.

The blockade of the Black Sea ports has encouraged the development of transportation along the Danube. Ukraine has now almost doubled transportation along this route compared to its pre-war capacity.

Agriculture

Ukraine is the last major market on the continent that is outside the EU. At the moment the Ukrainian agricultural sector is mainly viewed in terms of the challenges it will pose for Euro-integration, but it also offers opportunities.

Despite the war, Ukraine continues not only to export agricultural products but also to import them from the EU.

There is significant potential for developing the processing industry and creating new production facilities. Ukraine’s integration will have a positive impact on the EU’s food security and its position in global agricultural trade.

Moreover, Ukraine is also a guarantor of food security in African and Middle Eastern countries which are heavily dependent on relatively cheap products to prevent famine.

Continued grain exports to these countries from Ukraine – now within the EU – will make the EU itself a guarantor of food security in these regions. This will have a significant impact on security within the EU (reducing the number of migrants from poor countries) and on its international influence.

Ukraine’s experience, more resilient to external stresses and focused on maximum efficiency, can be shared and adapted to the realities faced by European producers, making the EU’s agricultural sector even more efficient and competitive.

The economic pillar of enlargement

The previous wave of expansion turned the EU into the largest integrated market in the world. Numerous new trade and financial flows opened up, new value chains were formed, new production facilities opened, and thousands of new jobs were created. The influx of foreign direct investment as a percentage of the new EU members’ GDP doubled from 2004 to 2012. This led to overall prosperity in the EU.

So future expansion should also be considered in terms of additional opportunities to strengthen the competitiveness of the EU economy – increased trading opportunities, enhanced energy security, improved resilience, a more secure supply chain, a wider range of goods and services, and so on.

And most importantly, it will reduce the EU single market’s dependence on third countries for raw materials and components by potentially integrating future new EU members into supply chains or relocating production to these countries.

Considering the experience of previous years, as well as the potential of the Ukrainian economy and the impact of the European economy on post-war recovery in Ukraine, we can argue that the EU single market will continue to develop rapidly with Ukraine as a member.

The price of Ukraine’s accession

The accession of each new member to the European Union comes with a price. Ukraine is no exception.

For example, the European think tank Bruegel estimates that the total annual cost of integrating Ukraine will be approximately 0.13% of the EU’s GDP.

The EU budget may need to increase by around 20% when Ukraine joins. However, that is unlikely to change EU member states’ current positions as net recipients and net contributors of EU funds.

It’s also important to understand that

it’s not just spending that will increase when Ukraine joins the EU – revenues will also rise.

Ukraine’s accession will contribute to an increase in the EU’s overall GDP through trade, foreign direct investment, and increased employment, production, and tax revenues.

As an EU member, Ukraine will also contribute to the community budget. Some of the funds spent on Ukraine’s integration will make their way back to the EU through the European companies that will participate in rebuilding Ukraine.

Moreover, when we talk about EU spending on Ukraine, we are often referring to funding for rebuilding and support for macroeconomic stability in wartime conditions, which is a separate area. The European Union has launched a financial instrument for this purpose – the Ukraine Facility.

The ongoing large-scale war and daily destruction are certainly factors that make any forecasting significantly more complicated.

Nevertheless, there is an understanding within the EU of the value and importance of Ukraine’s integration for the EU’s development and security. That’s why EU member states are analysing not only the benefits and costs of Ukraine’s integration, but also how European policies should be updated ahead of the next wave of enlargement.

This includes decision-making procedures, the Common Agricultural Policy, Cohesion Policy, the European Green Deal, and so on.

The process of integration is always a significant challenge for both the candidate country and the EU itself.

And, importantly, the experience of previous enlargements has shown that these challenges can be overcome together through consensus and the search for mutually beneficial solutions.

The same will be true in the history of Ukraine’s accession. We are already preparing for it and writing that history together with our partners.

All this is possible because politically, economically and in terms of values, Ukraine is already an integral part of the free and strong European family.

eurointegration.com.ua