Signing of the Association Agreement between the EU and Ukraine should become a good information newsbreak for international financial institutions in regard to Ukraine. And this is very important both for Ukraine, and for the EU as its business partner.
The anti-Ukrainian promotion campaign raised by Russia recently sets the creation of a negative image of Ukraine in the world financial market as its main goal. Consequentially, certain participants of the international financial market start to assess the situation in Ukraine inadequately and see non-existent problems. This is how we are supposed to understand the downgrade of Ukraine’s sovereign rating by the International Rating Agency Moody’s. This year Ukraine has been repaying the IMF credits and eurobonds of previous issues and paying interest on them without delays. And here charges of Moody’s towards Ukraine that it can’t perform against its commitments in due time sound weird. Actually Moody’s uses not its own words, but repeats the words of Russian politicians. They are extremely interested in the disruption of signing of the Association Agreement and therefore constantly dump consciously false information on Ukraine’s risk of default into mass media. It would be good if such an esteemed agency didn’t entangle into the Russian promotion machine, and estimated the situation with the economy of Ukraine more objectively.
It’s true that Ukraine’s economy has its problems, as has any economy in the world. But these problems are routine issues which the government of the country has to solve all the time. In many respects the association of Ukraine with EU is also called to reduce the number of routine problems in future and conduct fundamental reforms in the country which would eliminate preconditions for such matters.
Signing of the Association Agreement with the EU will speed up negotiations with the IMF for the conclusion of a new credit agreement. There is a high probability that the Association Agreement with the EU will be a signal for foreign investors to increase limits on investments into Ukraine. First of all, this has to do with the foreign banks owning Ukrainian banks. It will be easier for them now to grant direct loans to their Ukrainian subsidiaries.
Ukraine as an associate member of the EU gives more opportunities to foreign investors who will be ready to invest into Ukraine. Associate membership of Ukraine will bring conditions of opening and doing business in Ukraine closer to those in the EU countries. Foreign investors will have less fears and barriers for investing into Ukraine and profit and capital repatriation from Ukraine. The economic model of Ukraine becomes clearer for West European and not only West European investors. In order to get all this Ukraine wants to have associate membership in the EU.
It is difficult to account for international rating agencies, but judging from the logic of economic mind, the Association Agreement between Ukraine and the EU has to form the basis for the upgrade of Ukraine’s sovereign rating. For in the eyes of foreign investors the attitude towards Ukraine will change before and after the signing of the Association Agreement with the EU. And this is one of the important factors which affect both balance of payments of Ukraine and gold and foreign currency reserves. Ukraine is getting closer and closer to the process of signing of the Association Agreement with the EU, and as a result, it becomes clearer and visible who has got which attitude towards Ukraine in the world market. This is the most important time when we can understand who is Ukraine’s friend indeed and believes in its future and who is its enemy and is afraid of its economic growth and recovery.