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European Commission - Speech - [Check Against Delivery]

Speech by Valdis Dombrovskis at the International Support for Ukraine Conference in Kyiv

28 April 2015

Your Excellency, President Poroshenko,

Your Excellency, Prime Minister Yatsenyk,

Your Excellency, Prime Minister of Latvia Straujuma,


Ladies and Gentlemen,


First of all, I would like to thank the Ukrainian authorities for bringing together such a prominent mix of decision makers, policy makers, and business representatives. It is an honour for me to address you today.

Today's conference is important at least from two aspects.

First, we come together to discuss the future of Ukraine and how Europe can support the reform process in Ukraine.

And second, although this is not a pledging conference, it is an opportunity to send the signal to the world, to other potential supporters and investors, that Ukraine cares about reforms, and that Europe cares about Ukraine. And that both sides really mean it.  

As President Juncker already underlined, Europe stands together with Ukraine during these difficult times, both politically and financially. The European Union has made an unprecedented effort to support democratic transition of the country.

In March, last year, the European Commission announced €11 billion support package for Ukraine. The package is funded by the EU budget, both in the form of loans and grants and also by the European Financial Institutions – European Investment Bank and European Bank for Reconstruction and Development.

Financial support is vital for Ukraine in present situation, and, as president Juncker mentioned, Europe is delivering its part.

It is now important that Ukraine implements a clear and ambitious reform plan. A reform plan that addresses the structural problems in Ukrainian economy and make it more competitive.

The situation in Ukraine now reminds me somewhat of the situation which my country, Latvia, and other Baltic States, went through twice in the past 25 years.

The first time was at the beginning of 1990s, when the Baltic States regained independence from the Soviet Union. The second time was just five years ago, when Latvia and other Baltic States were hit by the deepest economic and financial crisis in the EU.

In both cases, we went through a process of profound change. This change left a deep imprint not only in the architecture of our statehood and economy; these changes have transformed our minds.


It reminded us that freedom, democracy and prosperity have a price. As regards the economic development the price is structural reforms. But the longer one waits to start them, the higher the price.

More recently, other European countries, like Ireland, Spain and Portugal are also good examples of how commitment and clear reform agenda may change the dangerous fiscal and macroeconomic imbalances. These countries are now on a growth path again.

Of course, this parallel is not complete because Ukraine is also facing a military conflict and grave security challenges.

Russia's aggression against Ukraine is not only a security issue. It is having an enormous impact on the daily lives of all Ukrainians.

Decline of GDP, double digit inflation, depreciation of hryvnia and related problems in banking sector, are all signs of a deep economic crisis.

Managing the crisis is always a complex task. The starting point is to set the expectations right, both internally and externally. The reason for this is that very often the crisis is about the confidence and trust. Trust of citizens towards the state, and confidence of markets towards the country.

Therefore, it is important to deliver on promises, but most importantly – deliver on all the commitments on time. Only this way is it possible to rebuild trust.

In this situation, it is important to set the fundamentals right and to regain the confidence of financial markets. The sooner we get financial and fiscal environment in order, the sooner we see the economic situation improving.

Investment will return. Businesses will start creating jobs. People will start spending. This will bring the economy back on a growth path and improve the living standards of the Ukrainian people. It will also reduce the risk for the Ukrainian people to face a crisis of similar magnitude in the future.

Ladies and Gentlemen,

I very much welcome the progress made in recent months to reform Ukraine's economy and governance. Improving the legislation and fighting corruption are signs of strength and commitment of Ukrainians to reform.

The abolition of the pegged exchange rate regime, the revision of the budget in line with more realistic expectations, the launch of reforms in the energy and banking sectors, are all promising first steps to stabilize the economy.

One has to be particularly careful about the balancing of the reforms and to take care about their social dimension.

The most vulnerable parts of population are the first hit by recession. In the case of Ukraine, we also face a humanitarian crisis in the Eastern regions.

The new 1.8 billion euro Macro Financial Assistance programme will be a great tool to help Ukrainians to move forward with the reform process. After discussions with members of Ukrainian Government, I am confident that we will be able to sign the new Memorandum of Understanding already next month.

Of course, Macro Financial Assistance programme is not the only way the EU is supporting Ukraine. There are other forms of assistance to Ukraine too – trade preferences, technical assistance and humanitarian aid.

But back to reforms.

The transition process in Eastern Europe after the collapse of communist regimes has shown that the rule of law is very important for whole the reform process.

It ensures fairness and transparency.

It is also crucial for the business environment and investment, especially as regards the privatization process.

The reforms of judiciary and public administration lay the groundwork for a swift recovery and a return to economic growth in the shortest possible time.

Although a number of important reform steps have already been taken, the progress in some other areas has so far been slow, in particular, in the areas of constitutional, judicial and public administration reforms.

We welcome the progress on setting the basis for specialised anti-corruption institutions. But more needs to be done to move from planning to acting, and to prove effectiveness of implementation.

The rule of law is also a condition for further processes for cooperation with the European Union, and for deepening these processes.

Another important aspect of the reform process is to make sure that it is fair and inclusive. In this context, the social dialogue plays an important role, as no reform in democratic society will work without discussions and involvement of its people.

Maidan, and processes following it, have shown that Ukraine has an important asset – a vibrant civil society able to mobilise itself and to fight for a better future for the country.

It is, therefore, important that civil society, along with social partners make an integral part of the reform process – in order to make it fair, transparent and socially acceptable.

Ladies and Gentlemen,

The time is pressing and we need to move forward quickly with the reform programme.

Baltic countries and also Poland, a country comparable in size to Ukraine, are examples of how quick and decisive action in carrying out the reforms bears fruits.

Ukraine itself is an example that the longer one delays the reforms, the higher the price of stability, in all senses of the term. Events in Maidan and the following elections showed that Ukrainians have made their political choice. Ukrainian politicians have been given a very clear mandate for reforms. This is the opportunity that should not be missed!

Thank you!


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