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Mujtaba Rahman is the head of Eurasia Group’s Europe practice and a columnist for POLITICO Europe. He tweets at @Mij_Europe.
The European Commission finally delivered its long-anticipated oral report on Ukraine’s progress last month, looking at the headway made toward the seven reforms the country will need to pass if European Union leaders are to green-light opening accession negotiations with Kyiv.
On reforms relating to the judiciary, Kyiv received a broadly positive assessment, albeit more needs to be done. And the same goes for tackling vested interests in the media as well. On the prevention of money laundering, the fight against corruption, reducing the influence of oligarchs and the protection of minorities, however, Ukraine still has a lot more to do, and it will now have until the fall to demonstrate further progress before European capitals consider a fuller written assessment.
What was crucially missing from this initial analysis, though, was the EU’s own preparedness for admitting Ukraine, whether in 10, 15 or 20 years’ time. This is arguably the bigger, more important consideration — especially as many in Berlin, Paris and Brussels expect the Western Balkans — as well as Moldova and possibly Georgia — to join the bloc at the same time. Leaders will therefore have to be satisfied that the EU won’t collapse under its own weight if they are to move Ukraine’s enlargement process forward at their December gathering in Brussels.
An initial discussion on the implications for the EU if Ukraine were to eventually join the bloc — or, what in jargon is now referred to as the EU’s “absorption capacity” — will thus be held by leaders in Granada in early October. And the two most important dimensions of this debate relate to governance and the EU budget.
Governance concerns the EU’s ability to function, pass laws and take decisions if the number of members jumps from 27 nations to 35 or 36, given that many policy areas operate by unanimity.
Hungary’s use of its veto — now seen by many in Brussels as an extension of its domestic and foreign policy — has focused minds in EU capitals on the risk of paralysis unless the bloc streamlines its decision-making process.
For some, the favored solution for addressing this problem is more qualified majority voting, stripping countries of their veto. Germany and France are already championing this move in foreign and tax policy. However, they face stiff opposition from Hungary, Poland and several countries that want to preserve their sovereignty by maintaining the condition of unanimity.
One possible way out of this impasse could be a compromise that sees more qualified majority voting, say in foreign affairs, but with “safeguards” in place. So, there would be an understanding in the Council that member countries wouldn’t go against each other’s core national interests. In the case of Greece, for example, Turkey-related issues would be considered a core interest. But this debate still has a very long course to run.
The question of EU budget funds is equally profound.
Currently, the largest outflows from Brussels to member countries are cohesion funds for economic convergence and agricultural subsidies under the EU’s Common Agricultural Policy (CAP). Together they make up roughly two-thirds of the budget.
But for now, there’s still no agreement on the budgetary implications of Ukraine joining the bloc. Senior German officials who have studied the numbers suggest all EU countries that currently benefit from the budget would become net contributors to it. Other EU capitals argue the financial flows would essentially remain status quo — but that seems unlikely.
Meanwhile, the Commission is yet to produce its own analysis on the question.
However, as Ukraine is poorer and more agrarian than the average EU member country, its membership will lead to it receiving a large amount of cohesion and agricultural funds from Southern, Central and Eastern Europe.
This then raises the question of whether the EU budget will need to be increased — perhaps by more supranational taxes or via contributions from member countries — or be completely rewired.
As the budget’s recent difficult midterm review — the Multi-Annual Financial Framework (MFF) — demonstrated, the bloc is already struggling to reprioritize money within its existing framework for new geopolitical priorities. And that could help create impetus for reform, as there is already an emerging consensus in Brussels that the EU budget is no longer fit for purpose.
Although Ukraine is unlikely to join the EU before the next 10 years — and it may even take longer than that — the next MFF will still need to provision for the country’s possible entry, as it will run from 2028 to 2034. This means leaders will already have to engage with these issues in the next few years.
Along these lines, the recently proposed €50 billion Ukraine facility is seen by many in Brussels as the basis for how the next MFF might address the country’s accession. Rather than a toxic political debate over the winners and losers of EU budget funds, some officials are contemplating a facility that would sit alongside but be distinctive from the regular budget. Another idea is to adopt two MFF’s — one for the 27 members and another for an enlarged EU, which would only be activated at the moment of accession. This is what happened in 2000, before countries in Central and Eastern Europe joined in 2004. But again, none of this will be easy to agree on.
How these reforms are implemented to make the EU “Ukraine-ready” is also open to debate.
Some in Brussels take the view that the institutional changes discussed above could be managed within the parameters of the Lisbon Treaty, while other officials say a “convention” between all member countries (and Ukraine) would be necessary — like the process that gave birth to the Lisbon Treaty. Referenda may also be needed in several countries like France, although this could be legally avoided if both of France’s parliamentary chambers supported the decision to admit Ukraine with a 3-to-5 majority. However, politically, it’s difficult to see a referendum being avoided.
Finally, it’s also entirely possible that the entire enlargement process may be rethought to enable Ukraine’s membership.
Rather than have Ukraine and other countries in the Western Balkans join all at once in 10, 15 or 20 years, their integration could happen in stages. Senior EU officials talk about a model whereby Ukraine would close certain chapters and then acquire the right to participate in specific Council formations — to shape but not take EU decisions — while benefiting from certain EU budget instruments and programs.
This would enable the EU to reform incrementally, helping to detoxify debate over the end date. But some countries, like Germany, oppose this approach, arguing that if member countries preserve their vetoes while candidate countries are integrated into the EU, they will never be allowed to fully join. This approach is also forbidden by the treaty.
Some officials see a role here for the European Political Community, the new platform French President Emmanuel Macron created to allow the EU to engage with its wider neighborhood.
While all this work has just begun, it’s now clear that the “Ukraine question” will be the single biggest political priority of the new Commission that will take office in November next year. And there’s no doubt it will dominate politics in Brussels and other EU capitals for years to come.