Ukraine: Too Big for School
Ukraine: Too Big for School

Author(s): Elżbieta Kaca
Subject(s): Supranational / Global Economy, Economic policy, Environmental and Energy policy, Government/Political systems, International relations/trade, Economic development, Fiscal Politics / Budgeting, Geopolitics
Published by: PISM Polski Instytut Spraw Międzynarodowych
Keywords: Ukraine; European Union; sector budget support; EU assistance tool; energy sector; improving energy efficiency; EU aid;
Summary/Abstract: This section presents how budget support has been used in Ukraine. Sector Budget Support (SBS) is the predominant EU assistance tool in Ukraine, with around 60% of all EU aid to the country planned to be spent in this way in the years 2007–2013. Six agreements were signed in the sectors of energy, energy efficiency, trade facilitation, environment, transport, and border management, and another is awaited in energy for an overall sum of €389 million. However, in total Ukraine received payments of no more than one third of this amount (€111.14 million) because since 2011 the EC has limited transfers for all operations. The main reason for this was non-fulfilment of a precondition on PFM, as since 2011 the country’s public procurement law and budgetary transparency have significantly deteriorated. This crucial condition ensures that funds are not fraudulently used. After two years of futile discussion on the implementation of this condition, the Ukrainian government finally adopted a PFM strategy in September 2013 (not made public) as this issue was made an EU condition to sign an AA.

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