Veronika Movchan, our research director and expert of the European integration, explained in her article the importance of the candidate country status for applying European Union membership and its advantages for Ukrainian business.
Below are brief notes from her post.
On June 23, 2022, during the Brussels summit, the European Council granted Ukraine status of a candidate for the EU membership. This is a historic moment for our country. However, the effect of providing the candidacy to Ukraine during a full-scale invasion of russia will be completely different than it would be approved in a peace time.
Candidate status is the first step towards the EU membership. However, experience of the Central and Eastern European countries shows that candidacy creates new investment opportunities. From the short-term perspective, investors understand that market of the candidate state will become part of a significantly larger market with clear and already well-known game rules, so they will be rushing to take opportunity advantages. As making profit from significant investments is not a matter of 1 or 2 years, but rather of 5 to 10 years, EU membership perspective allows investors – both domestic and external – to stimulate investments generally. Therefore, under normal peaceful conditions, the status of a candidate country would be an incentive for investors to make further steps.
Now there is ongoing war escalation in Ukraine caused by the russian invasion. Therefore, we cannot expect that investments will come immediately. Military risks outweigh potential benefits. While the investment process is still in progress (because the economy operates during the war), these investments will be limited as long as the active military actions continue.
Transition period from candidacy to full EU membership takes an average of 7 to 8 years, but there are countries that have been joining the EU for more than 20 years, f.e. Turkey. At the same time, Ukraine has a certain plus – the Association Agreement that has prepared us for the economic integration. Here Ukraine is much better prepared than other countries with a candidate status, for example, in the legislative perspective: many Ukrainian laws are already European.
Therefore, Ukraine is likely to succeed in obtaining the EU membership much earlier. Especially if Ukraine takes further steps toward the EU and fights corruption actively. I think it might go within 5 years.
