The European Court of Auditors (ECA) states that Ukraine, despite support and subsidies from the EU, still suffers from large-scale corruption. Over the past years, the EU has tried to improve the judiciary, but according to the auditors, this has not produced the expected results.
The European Union has been supporting Ukraine's reform agenda for over twenty years. Large-scale corruption and the hostage-taking of the state remain widespread in Ukraine; these not only hinder competition and growth but also damage the democratic process.
The EU has long been aware of the connections between oligarchs, senior officials, politicians, the judiciary, and state-owned enterprises in Ukraine. The auditors note that the EU has not developed a genuine strategy to combat large-scale corruption. Illegal money flows and money laundering are only marginally addressed.
In many cases, EU subsidies were subject to conditions, but these were often interpreted too broadly, leading to overly positive evaluations. The auditors cite the visa-free system as an example. The operation of this system was not reassessed, even though two out of three conditions for EU support had not been met.
However, since so many enterprises in Ukraine are corrupt monopolies or oligopolies, the auditors assert that the EU should have acted more directly to remove barriers to free and fair competition. "Ukraine needs a targeted and efficient strategy to tackle the power of oligarchs and reduce the hostage-taking of the state.
The EU can play a much more important role than it has up to now," said Juhan Parts, the member of the European Court of Auditors responsible for the report.
Nevertheless, capacity-building projects have helped in reformulating the Ukrainian constitution and numerous laws. The auditors acknowledge that this also supported the establishment of a new supreme court. However, these achievements are constantly at risk due to numerous attempts to circumvent laws and weaken reforms.
The entire system for investigating, prosecuting, and adjudicating high-level corruption cases is very vulnerable. Although the Supreme Anti-Corruption Court is beginning to achieve promising results, its effectiveness, independence, and sustainability are regularly questioned.
Ukraine is part of the EU’s Eastern Partnership and receives support from the European Neighbourhood Instrument. Since 2014, the European Commission has allocated approximately 5.6 billion euros for macro-financial assistance and 2.2 billion euros for assistance programs. The Commission also guarantees 4.4 billion euros in loans from the European Investment Bank. The EU is Ukraine’s largest donor.