Kiev’s reform adviser on report of the EU Court of Auditors report on Ukraine: “More has to be done”

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December 9, 2016 – Fort Russ News – Stefan SHOCHER interviews Ivan Miklos. Translated from German by Tom Winter –

Ivan Miklos, former Slovakian minister, now advising Ukraine.

An EU report puts financial aid to Kiev in question – much has happened since the revolution, says a top adviser to the Kiev government.

It is a paper that reads like an accusation: The fight against corruption in Ukraine has been stalled, 

law enforcement authorities are not independent of the government, and 

the influence of oligarchs on political decision-making processes is enormous. 

So concludes the recently published report by the EU Court of Auditors: EU financial aid has shown limited effect. They recommend increasing the pressure and, in case of doubt, suspending payments.

It is important to note that the report deals with EU payments since the year 2007, including the years under the overthrown President Yanukovych, characterized in the paper as having “limited interest in reform.” After the Maidan revolution (2013/2014) progress had been made – but fragile progress. However, the payments contributed towards the stabilization of Ukraine and the implementation of important structural reforms.

Ivan Miklos was Slovakia’s Vice-Minister of Finance from 1998 to 2002 and between 2002 and 2006, as well as 2010 to 2012 Finance Minister and Deputy Prime Minister. Today, he is the economic consultant of Premier Volodymyr Hrojsman in Kiev. He draws a thoroughly mixed, but essentially positive balance.

KURIER: Has the fight against corruption in Ukraine hit a glass ceiling?

Ivan Miklos: I do not think so. What happened after the Maidan revolution is more than in the 20 years before. It would have been possible to do more and it will also be necessary to do more. 

The reforms are much more of a political problem than a technical one. But if we are talking specifically about corruption, the most important innovation is anti-corruption legislation. This is good. Implementing it is a challenge. The judicial reform is also an issue. And there are new institutions. The Anti-Corruption Agency. But the process has only begun. There are still scant results.

Kurier: So you would say that the Cabinet and the entire leadership stand behind reforms?

Miklos: No. But one can already say that the government is reform-oriented. The problem is that not every single minister is really willing to implement reforms. But Premier Groysmann has implemented the deregulation of the gas price. Then there is the publicization of expenses, the declarations of ownership for public employees. These are significant achievements. Privatization remains a major problem. There are about 3500 state-owned enterprises – about 50 percent of them are in fact inoperative. This is a huge corruption-expense and a fiscal burden. 

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Kurier: Hrojsman has dismissed foreign reform ministers (Economy and Finance); President Poroshenko himself still has important company hildings – both things that that have engendered international criticism. How did it happen?

Miklos: It is true that these two ministers are gone. But I also think it is normal that Ukrainians sit in the Ukrainian government. Foreigners can be consultants. As far as Poroshenko is concerned, this is rather a political question. He himself says yes, he has handed over his shares to a trust fund. 

Kurier: What is the problem in Ukraine: a political elite, or an administrative apparatus that has proved to be reform-resistant in the past? 

Miklos: The biggest problem is that reforms are not carried out quickly and thoroughly enough – because there is a lack of political leadership, will, responsibility. Therefore, an understanding that reforms are needed – not reforms because of external pressures.

Kurier: Does Ukraine need technocrats or politicians? 

Miklos: I think politicians. Reforms are not a technical problem, what it takes is politicians who have the vision, the will and the courage to carry out reforms. Strong politicians who can also communicate that. 

Kurier: What role in this reform process is played by the EU’s slowness in dealing with Ukraine? 

Miklos: The European perspective itself plays a huge role. Even if it is not concrete and sometimes barely visible. 

Kurier: Does it work fast enough in dealing with Kiev? 

Miklos: In general it is important to have this support. Ultimately, however, the Ukrainians must implement these reforms themselves.

Kurier: How do you see the Trump era? 

Miklos: There is a risk that Trump’s Administration may be less helpful. The only way out is to speed up the reforms.

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