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EU and Ukraine sign £1.3bn deal

Published 22/05/2015

European Commission president Jean-Claude Juncker greets Ukrainian president Petro Poroshenko. (AP)
European Commission president Jean-Claude Juncker greets Ukrainian president Petro Poroshenko. (AP)

The European Union has offered more money and the promise of visa-free travel to some post-communist nations as well as a 1.8 billion euro (£1.3 billion) loan agreement with Ukraine.

Meeting in Latvia for the Eastern Partnership summit, EU and Ukrainian officials signed a deal meant to help revive the country's ailing economy, which is suffering from structural problems and unrest in the industrial east.

The deal requires Ukraine to adopt a series of reforms including anti-corruption measures.

Ukraine's economy contracted by nearly 18% in the first quarter of this year from a year earlier.

At the summit, the EU also promised grants of 200 million euros (£143 million) over the next decade to support small and medium-sized businesses in Ukraine, Georgia and Moldova.

Besides that financial support and pledges to ease visa rules for Georgian and Ukrainian citizens, EU leaders had little to offer the six post-Soviet nations that are part of the Eastern Partnership programme: Ukraine, Georgia, Moldova, Azerbaijan, Armenia and Belarus.

The East-West partnership has tempered its ambitions after Russia's military intervention in Ukraine.

More than anything, the summit was meant to show that the partnership is still on track despite Moscow's efforts to keep the former Soviet republics in its orbit.

Russia tried to pull Ukraine away from the EU partnership in 2013, triggering street protests that led to the overthrow of the Moscow-friendly government followed by Russia's annexation of Ukraine's Crimean peninsula.

The partnership is now moving at different speeds, with Georgia, Ukraine and Moldova seeking more integration with the EU, while Armenia, Belarus and Azerbaijan are settling for more limited co-operation. Armenia and Belarus have joined Russia's Eurasian Economic Union, which precludes deeper integration with the EU.

"It is the prerogative and right of every independent and sovereign state to choose which club it wants to belong to," Finnish prime minister Alexander Stubb said, while holding up Western integration as a path to peace, stability and economic prosperity.

"The Eastern Partnership is not against anyone, it's for everyone," Mr Stubb said.

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