NEW CHALLENGES FOR THE EUROPEAN NEIGHBOURHOOD POLICY: KEY ASPECTS OF COOPERATION BETWEEN THE EU AND EASTERN PARTERSHIP COUNTRIES Svitlana Musiyenko 1 1 University of Economics in Prague; nám. W. Churchilla 4, 130 67, Praha 3, Czech Republic Email: svitlana.musiyenko@vse.cz Abstract: The article analyzes the key issues of cooperation between the EU and six former Soviet republics Ukraine, Moldova, Belarus, Georgia, Armenia and Azerbaijan in the framework of the Eastern Partnership initiative. Special attention is paid to the political and economic components of this interaction, and in particular good governance, signing of association agreements and regional cooperation. The main objective of the study is to identify the perspective areas of cooperation between the EU and each EaP partner country, and to support the course of EU to provide an individual approach each EaP partner country. Keywords: economic integration, the Eastern Partnership, Free trade agreement, Association agreement, good governance, political stability, democracy, economic cooperation, development of small and mediumsized enterprises. JEL classification: F13, F15, F51, F59. Acknowledgement: This paper was written with a support of the project VSE-IGA 7/2014. "Bringing peace, stability and prosperity to the broader EU neighborhood must be the first and utmost priority. The current crises in the EU neighborhood show once again that a strong, proactive and ambitious EU foreign policy is vital for each and every Member State of the EU" Elmar Brok, The Chairman of the European Parliament s Foreign Affairs Committee Six years after its launch, the Eastern Partnership (EaP) has seen both achievements and serious challenges, mostly connected with the conflict between Russia, Ukraine and other countries of Russia s "near abroad", the energy crisis, democratization, migration, the fight against the corruption etc. All this once again stressed the importance of politic dialogue and mutually beneficial cooperation between the countries. The key objectives of the paper are to give the fundamental background of the EaP since its foundation; to provide the analyses of its success gained and using the descriptive and analytic methods to evaluate the level of intensity each EaP partner countries' cooperation with the EU in dynamics and give the recommendations for the EUs approach towards the EaP countries in future. 1. Background Being adopted after the Euro-Mediterranean Partnership (EUROMED), formerly known as the Barcelona Process, re-launched in Paris in July 2008, and the Black Sea Synergy (launched in Kiev in February 2008) the EaP still remains one of the ENP's "youngest" initiatives and one of the most controversial: it still hard to judge about its importance, thought is already obvious that either within the EaP or any other cooperation instrument, the EU does need well-balanced and properly arranged framework for cooperation with its eastern partners. -406-

It is very important both to the EU and EaP countries to identify the framework of their mutual cooperation: what are the next steps for the EU in its policy towards Eastern Partnership countries and what challenges lie ahead of the region and how the EU will respond to them and in which sectors the cooperation is to be strengthened for which country and why it is highly important both to EU and the EaP countries to make the individual approach to each partner country. Therefore, the case chosen for the Eastern dimension of the ENP comprises six former Soviet republics Ukraine, Moldova, Belarus, Georgia, Armenia and Azerbaijan. The initiative was officially launched in 2009 at the Prague summit on the Polish-Swedish proposal, with strong support from the Vishegrad states. The declaration on the establishment of the Eastern Partnership, adopted in May 2009 at the first EaP summit, said that "the main purpose" Eastern Partnership was "to create the necessary conditions to foster political and economic integration between the European Union and interested partner countries"(joint Declaration of the Prague Eastern Partnership Summit, 2009). The key factor of the Eastern Partnership launch was the territorial enlargement of the European Union, which is a political and economic stake in the EU pushed further to the east and as Štefan Füle, ex-commissioner for Enlargement and European Neighborhood Policy, emphasized: "The Eastern partnership, a key policy initiative in the Neighborhood, aims to bring our eastern neighbors closer to the European Union. Drawing on the EU s unique range of instruments, we are seeking to achieve a new, innovative style of partnership. We want to engage further in cooperation with our neighbors to support their democratic transformation. We encourage reforms in key policy areas. We offer stronger links of political association and economic integration, adapted to our partners wishes and capacities. EU funding channeled via budget support programs is an important tool to achieve these goals" The EaP initiative was launched to intensify relations between the EU and its Eastern partner states, which expressed their will economically and legislatively closer to the EU member countries, deepen political cooperation and economic integration, help with the transition process, support for economic reforms based on EU standards and facilitating business mobility between the EU's partner countries. To achieve these goals series of political and socio-economic reforms in the partner countries with approximation of legislation with recent EU legal norms were implemented. Special importance was given to four strategic areas main priorities for reforms in the partner countries and, simultaneously, their cooperation with the EU: Democracy, good governance and stability system (administrative reform, anti-corruption measures, training of managerial staff, civil society development, free media and others.); Economic integration and convergence with EU's sectoral economic policies, including the free trade agreements (as the successful development of trade and economic relations; harmonization of legislation with the EU legal framework); Energy security (measures to ensure a reliable energy supply to EaP partner countries and the EU, energy efficiency and development of renewable energy); People-to-people contact support (visa regime facilitation) (Joint Declaration of the Prague Eastern Partnership Summit, 2009). The EaP is based on existing bilateral relations between the EU and its eastern partner countries within two parallel and mutually complimenting tracks: bilateral(support deeper bilateral relations between the EU and each eastern partner country (by signing AAs, DCFTAs etc.) and multilateral (acts as a forum for dialogue and exchange, through thematic platforms and flagship initiatives "flagship initiatives": Border management program; Integration of energy markets, energy efficiency and development of renewable energy; Special program for small and medium businesses; South "gas corridor"; Disaster management.). The EaP is a broad-based initiative and involves not only governments, but also civil society and other non-governmental parties. -407-

2. The assessment of Eastern Partnership s multilateral and bilateral tracks' performance: lessons from the past and early forecast for 2015-2017 The last three years were and still continuing to be one of great challenges and major achievements for the EaP. Political crisis and war conflicts in the east of Ukraine, political demonstrations in Armenia and its unwillingness to sign AA and DFCTA in favor of strengthening cooperation within the Eurasian Economic Union, weak interest from Belarus and Azerbaijan in contrast to clear and strong European course from Moldova, Ukraine and Georgia all these factors have once again proved the need of properly measured individual approach to each of EaP countries and providing financial assistance to the countries, strongly in accordance to the level, how far the partner countries are ready to go within deepening their relation with the EU. Within the first three years of EaP's existence (2010-2013), the financial assistance was launched to the EaP countries without differential approach (Table 1) Table 1. Financial assistance to the EaP countries 2010-2013, million EUR 2010 2011 2012 2013 in general Administrative costs EaP 0,75 1,59 3,39 4,77 10,5 Armenia, in general 27,7 43,09 54,52 59,71 185,02 Basic distribution 27,7 36,39 39 42 145,09 Revenues within the EaP, including: 0 6,7 15,52 17,71 39,93 Complex institutional programs 6,7 13,52 12,59 32,81 Regional policy 0 2 5,12 7,12 Azerbaijan, in general * 7 31 42,15 49,34 129,49 Basic distribution 7 28 32 34 101 Revenues within the EaP, including: 0 3 10,15 15,34 28,49 Complex institutional programs 3 8,15 8,05 19,2 Regional policy 0 2 7,29 9,29 Belarus in general** 10 16,07 26,46 37,73 Basic distribution 10 15 22 27 90,26 74 Revenues within the EaP, including: 0 1,07 4,46 10,73 16,26 Complex institutional programs 1,07 2,46 2,35 5,88 Regional policy 0 2 8,38 10,38 Georgia, in general 37,2 50,73 61,87 67,69 Basic distribution 37,2 45 47 50 217,49 179,2 Revenues within the EaP, including: 0 5,73 14,87 17,69 38,29 Complex institutional programs 5,73 12,87 12,26 30,86 Regional policy 0 2 5,43 7,43 Moldova, in general 66 78,6 94,19 100,35 339,14 Basic distribution 66 71 75 79 291 Revenues within the EaP, including: 0 7,6 19,19 21,35 48,14 Complex institutional programs 7,6 17,19 16,37 41,16 Regional policy 0 2 4,98 6,98 Ukraine, in general 126 137,32 152,57 180,17 596,06 Basic distribution 126 130 132,15 133,75 521,9 Revenues within the EaP, including: 0 7,32 20,42 46,42 74,16 Complex institutional programs 7,32 18,42 17,63 43,37 Regional policy 0 2 28,79 30,79 In general: 267,6 327,4 393,0 450,4 1438,4 Source: Eastern Partnership Reports Online EEAS - http://eeas.europa.eu/eastern/index_en.htm, own calculations -408-

Notes: *) the preliminarily planned amount of financial assistance for Azerbaijan in 2010 was reduced from EUR 26 mln. to 7 mln. due to misuse of funds; **) Data for 2012-13 for Belarus can be considered only as targets because of the lack of policy documents adopted. To provide funding to selected countries based on their "progress towards deep and sustainable democracy and implementation of agreed reform objectives contributing to the attainment of that goal", the "more-for-more" principle or so-called "umbrella program" was introduced: the level of financial assistance to particular partner directly depends on the implementation of the partner country s reform agenda (Figure 1.). Such approach allows figuring out "less-interested" (Belarus, Armenia, and Azerbaijan) and "more-interested" countries (Moldova, Georgia, and Ukraine)(European Integration Index 2011-2014). The assessment of each EaP country s performance towards integration with the EU is provided by The European Integration Index for Eastern Partnership Countries. The Index is generated annually and informs the EU and partner countries governments about the relevance and effectiveness of EU assistance, including the more for more approach that rewards good performance with additional support. The Index points to the policy areas in each country where more progress is needed, and provides analysis for civil society organizations advocating for policy reforms in the EaP region (European Integration Index 2011-2014). The Index interprets progress in European integration as the combination of two separate, yet interdependent processes: firstly, increased linkages between each of the EaP countries and the EU; secondly, greater approximation between each EaP country s institutions, legislation and practices, and those of the EU(European Integration Index 2011-2014). The key indicators, according to which the performance is evaluated, are: political dialogue; trade and economic integration; sectoral co-operation; people-to-people contacts; assistance programs(european Integration Index 2011-2014). Each from five indicators is evaluated from the 0 to 1 scale level. The the average rate of reforms performed is given to the country. The closer indicator to 1 is, the higher level of implemented reforms is made. The dynamics of Index performance evaluation each EaP country is presented by Figure 1. Figure 1. Key indicators of reforms, performed by the EaP countries in dynamics Source: European Integration Index 2011-2014, http://www.eap-index.eu, own calculations Note: Indicators range from 0 to 1, the closer indicator to 1 shows the higher level of implemented reforms -409-

Despite of controversial prognoses the EaP made significant progress within the last few years. EaP countries, as the rest of the CIS members, have followed different development paths since the early 1990s. It is important to stress, that Russia s weight among the eleven countries comprising the CIS remains considerable, accounting for 78.3 % of the EU imports from the CIS and 70.6 % of EU-28 exports to the CIS(EU-CIS statistics report 2002-2013, Eurostat). The value of the bilateral trade in goods between the selected EraP countries and the EU-28 is detailed for the years 2002, 2010, 2012 and 2013 (Figure 2). Figure 2. Evolution of EU trade with the selected EaP countries, EUR million Source: Eurostat, http://www. http://ec.europa.eu/eurostat, own complication Although during 2002-2013 EU-28 imports from the entire region grew by close to 225 %, imports from Azerbaijan increased by 952 % respectively over the same period (EU-CIS statistics report 2002-2013, Eurostat). Starting from low trade intensity in 2002, the strong growth in those countries exports to the EU-28 can be mainly explained by the increase in production and distribution capacity for "Mineral fuels". In import from the EU to the EaP countries prevail Petroleum, petroleum products (99% of Azerbaijan s and 31,8% of Belarus s import from the EU); Non-ferrous metals(29,7% of Armenia s imports from the EU); Iron and steel(24,3% of total Ukraine s imports from the EU) and Electrical machinery(18,3% of Moldova s imports from the EU); Metalliferous ores; Vegetables and fruit; Fertilizers; Apparel and clothing(eu-cis statistics report 2002-2013, Eurostat). EaP countries export to the EU Gold, non-monetary (12,6% of Armenia s and 17,2% of Azerbaijan s exports to the EU); Road vehicles (13,9% of Belarus s and 9.1% of Ukraine s exports to the EU); Petroleum, petroleum products (16,2% of Moldova s exports to the EU); General industrial machinery(10,2% of Azerbaijan s and 10,8% of Belarus s exports to the EU); Road vehicles; Petroleum, petroleum products; Medicinal and pharmaceutical products; Electrical machinery(eu-cis statistics report 2002-2013, Eurostat). Between 2002 and 2013, numerous trade partnerships have been agreed between CIS countries, the EU-28 and individual CIS states (Table 2). Three "constant" leaders Georgia, Moldova and Ukraine have signed new Association Agreements (AA). In case of Ukraine, AA is being almost provisionally applied, with the missing provisional application of this part of the agreement, postponed until the end of 2015, but the rest two countries Georgia and Moldova succeed in provisional application already including the Deep and Comprehensive Free Trade Area (DCFTA). The EU has been one of the largest trade partners for the EaP countries. The EaP's commodity turnover with the EU varies between 30% and 50% of total, but their access to the EU market is less preferential (MFN regime) than for many other neighboring countries with exemption of Belarus, use privileges provided by Generalized System of Preferences (GSP) -410-

South Caucasus (CAU) Eastern Europe (EAST) 13 th International Scientific Conference or the GSP+ or autonomous trade preferences (Moldova). With the launch of EaP initiative in 2009, relations between the EU and the six post-soviet republics have received new motion for development(eastern Partnership Implementation Report 2014; Delcour, L., 2014; Delcour, L., 2015; Gylfason, T., 2014; Support for the Eastern Partnership: Stories, facts and figures from the European Neighbourhood Instrument 2014). The EaP offers upgrade of relations within three major dimensions, namely (a) the Association Agreement (AA), (b) Agreement on a Deep and Comprehensive Free Trade Area (DCFTA), and (c) Visa Facilitation and Readmission agreements. Only three out of six partner countries Ukraine, Moldova, Georgia kept their course for deeper integration with the EU and signed AAs and actively working on DCFTAs implementation. In this context, it is very important both for the EU and partner countries to clear up the exact areas of their cooperation. In general, the commodity turnover of these countries with the EU vary between 30% and 50% of total, but their access to the EU market is less preferential than for many other neighboring countries. They trade with the EU on the basis of MFN regime, and five EaP countries, with exemption of Belarus, use privileges provided by Generalized System of Preferences (GSP) or the GSP+ or autonomous trade preferences (Moldova). Table 2. provides an overview of the current trade relations as well as the current state of the DCFTAs(Eastern Partnership Implementation Report 2014). Table 2. Cross countries' negotiations on AA/DCFTA (July 2015) Region Country AAs signed Stadium of DCFTAs negotiation process Armenia PCA (1999), negotiation on update Negotiations are in progress, the date of signing towards AA started in July 2010 is not specified; the terms of DCFTA should be compatible with future obligations under the Eurasian Economic Union Georgia PCA (1999), negotiation on update Signed on 27.06.2014, ratified on ratified on towards AA started in November 2006 18.07.2014 Azerbaijan PCA (1999), negotiation on update Negotiations are in progress, the date of signing towards AA started is not specified Moldova PCA (1994), AA initialed in November Signed on 27.06.2014, ratified on ratified on Belarus Ukraine 2013 PCA (1995), not ratified, suspended since 2007 PCA (1998), AA agreed upon in December 2011-411- 02.07.2014 Negotiations are in progress, the date of signing is not specified, no clear interest from the coutry's side Negotiation process is tighten due to war conflict with Russia and unstable political situation, expected date of signing is on 01.01.2016 Source: own complication from the DG Trade data (http://ec.europa.eu/trade/), Eastern Partnership Implementation Report 2014 (http: //www.eeas.europa.eu) Despite of war conflict Ukraine in 2014 is still the only EaP country that upholds official consultations with both the EU Military Committee (EUMC) and the Political and Security Committee (PSC). The public opinion has changed in the course of EU integration. Opposite to 2013 the support for EU integration increased from 47% to 57%. In the meantime, the support for the Customs Union with Russia, Belarus and Kazakhstan decreased from 36% to 16% (European Integration Index 2014). Wide range of assistant programs were offered to Moldova and Georgia (especial success was reached in Agriculture reform; Visa Liberalization Action Plans), to support these countries in their decision to sign the Association Agreements. The rest of EaP partners haven t showed significant results, and, to certain constant their interest in deeper cooperation with the EU (Table 3.). In September 2013, Armenia announced that it would

not initial its AA in favor to the Eurasian Customs Union, offered by Russia. Armenia s decision was mostly urged by the need to avoid potential threat for Russia. That is why present dialogue with Armenia on AA/DFCTA is compatible with its future obligations under the Eurasian Economic Union. In case of Belarus latest cooperation with the EU was mostly held through the EaP's multilateral track and technical dialogues concerning specific topics of mutual interest, as well as support for civil society and the Belorussian population, people-to-people contacts, educational programs. EU's cooperation with Azerbaijan jet has either shown no significant results: decided to a number of meetings concerning the Partnership and Cooperation Agreement were rescheduled by the Azerbaijan side and further cooperation is likely to be held out under a Strategic Modernization Partnership, regional and rural development. The detailed analysis of reforms, performed by the EaP countries during the last 5 years, is presented in Table 3(European Integration Index 2011-2014). The analysis is made on the basis of European Integration Index, which annually measures the situation in EaP countries in accordance with the growing political, economic and social ties between each of the six EaP countries and the EU. Indicators range from 0 to 1, the closer indicator to 1 shows the higher level of implemented reforms. Table 3. Key indicators of reforms, performed by the EaP countries in 2011-2014 Political dialogue 2011 2012 2013 2014 Country average Moldova 0,75 0,77 0,79 0,86 0,79 Ukraine 0,94 0,94 0,88 0,89 0,91 Georgia 0,56 0,56 0,69 0,79 0,65 Armenia 0,64 0,63 0,69 0,68 0,66 Azerbaijan 0,5 0,55 0,62 0,54 0,5525 Belarus 0,28 0,28 0,28 0,26 0,275 Annual average 0,61167 0,6217 0,65833 0,67 X Trade and Economic integration 2011 2012 2013 2014 Country average Moldova 0,74 0,66 0,71 0,71 0,71 Ukraine 0,78 0,68 0,72 0,74 0,73 Georgia 0,57 0,49 0,54 0,56 0,54 Armenia 0,61 0,49 0,54 0,54 0,55 Azerbaijan 0,54 0,52 0,57 0,56 0,55 Belarus 0,1 0,37 0,38 0,4 0,31 Annual average 0,55667 0,535 0,57667 0,585 X Sectoral cooperation 2011 2012 2013 2014 Country average Moldova 0,54 0,61 0,61 0,59 Ukraine 0,7 0,66 0,66 0,67 Georgia 0,46 0,51 0,55 0,51 Armenia 0,19 0,23 0,24 0,22 Azerbaijan 0,35 0,36 0,47 0,39 Belarus 0,36 0,32 0,3 0,33 Annual average 0,4333 0,44833 0,47167 X People-to-people contacts 2011 2012 2013 2014 Country average Moldova 0,64 0,78 0,71 0,66 0,7 Ukraine 0,48 0,48 0,54 0,51 0,5 Georgia 0,59 0,45 0,47 0,47 0,5 Armenia 0,51 0,43 0,46 0,5 0,48 Azerbaijan 0,27 0,24 0,28 0,29 0,27 Belarus 0,26 0,3 0,34 0,34 0,31 Annual average 0,45833 0,4467 0,46667 0,46167 X Assistance programs 2011 2012 2013 2014 Country average -412-

Moldova 0,87 0,71 0,68 0,66 0,73 Ukraine 0,28 0,42 0,46 0,48 0,41 Georgia 0,62 0,57 0,65 0,57 0,6 Armenia 0,48 0,34 0,52 0,57 0,48 Azerbaijan 0,15 0,13 0,25 0,18 0,18 Belarus 0,16 0,25 0,21 0,26 0,22 Annual average 0,42667 0,4033 0,512 0,45333 X Source: European Integration Index 2011-2014, http://www.eap-index.eu, own calculations Note: Indicators range from 0 to 1, the closer indicator to 1 shows the higher level of implemented reforms The analysis of data, presented in Table 3 shows, that the highest level of cooperation within 2011-2014 was reached in the following areas (from the most to the less intensive cooperation): political dialogue (specially, in case of Moldova and Ukraine with country average linkage indicator 0,79 and 0,91 accordingly; trade and economic integration (Moldova 0,705; Ukraine 0,73 and Georgia, Azerbaijan 0,54)(European Integration Index 2011-2014). In the rest of the spheres sectoral cooperation, people-to-people contacts and assistance programs relatively high indicators are observed in leading countries(moldova, Georgia and Ukraine) and in some countries with more limited ambitions in case of their mutual interest of cooperation in the certain specific area (for example, people-to-people contacts in case of Belarus) (Figure 3). Figure 3. Key determinants of transition to market economy 2011-2014. EaP partner states Source: European Integration Index 2011-2014, http://www.eap-index.eu, own calculations Note: Transition indicators range from 0 to 1 with 0 representing little or no reforms implemented within the EaP initiative. Indicators range from 0 to 1, the closer indicator to 1 shows the higher level of implemented reforms It is possible to presume, that within the nearest period 2014-2020 EU EaP countries cooperation is to be focused on the deepening cooperation in the political dialogue (democracy, stability and good governance support) and trade and economic integration, with the special prerogative to the Moldova, Georgia and Ukraine and will focus on rather sectoral type of cooperation with the rest EaP countries (Belarus, Azerbaijan, Armenia). In accordance with the implementation of the partner country s reform agenda the level of financial assistance to particular partner was shared both by the "more-for-more" principle and, of course in view of strategic areas of cooperation for each of EaP countries. In 2014-2017 three EaP -413-

countries (Ukraine, Moldova, and Georgia) received the highest funding under the umbrella program (Table 4.). Country Funding 2014-2017, million EUR Table 4. EU support for EaP countries from the ENI Key sectors of cooperation Armenia 140-170 private sector development; public administration reform; justice. Azerbaijan 77-94 regional and rural development; justice; education and skills development Belarus 71-89 social inclusion; environment; local and regional economic development Georgia 335-410 public administration reform; agriculture and rural development; justice Moldova 335-410 public administration reform; agriculture and rural development; justice Ukraine 365-465 building deep and sustainable democracy; signing of AA and DFCTA; political stability Source: Support for the Eastern Partnership: Stories, facts and figures from the European Neighbourhood Instrument 2014. Publications Office of the European Union, Luxembourg, Belgium, 2015. http://ec.europa.eu. Ukraine: Despite of the pressure from Russia and EU's high dependence on import of energy resources from Russia, the EU confirmed its wiliness to support Ukraine in stabilizing its economy, encouraging judicial, political and economic reforms and further development. In 2014 EU provided Ukraine EUR 365 million, which is the highest amount ever committed for bilateral aid to Ukraine. This package combines fresh funds (EUR 242 million) with the partial reorientation of EUR 123 million already provided in 2013. The fresh funds comprise EUR 40 million from the ENI umbrella program. The incentive is intended support good governance and rewards progress in building deep and sustainable democracy in the country (Support for the Eastern Partnership: Stories, facts and figures from the European Neighbourhood Instrument 2014). In response to Ukraine s political and economic crisis, in March 2014 the European Commission promised to invest up to EUR 11 billion from 2014 to 2020 to support good governance, recovery and democratic transition to market economy. Up to EUR 1.5 billion are expected from the ENI. The events have made it difficult to identify the focus of EU assistance to Ukraine several years in advance. Due to the turbulent and unpredictable political situation in Ukraine, EU assistance is committed in the form of annual special measures. The state building contract is a kind of instrument for delivering budgetary support, intended to support countries in situations of fragility or involved in transition processes towards sustainable economic development and democratic governance. The first payment of Ukraine s state building contract was granted for providing reforms in the sector of public policy, good governance, and macroeconomic stability, management of public finances, and transparency and supervision of the national budget. The second transfer within the state building contract is planned for 2015 and will be aimed reaching concrete progress in the specific reform conditions in the spheres of public finance management, anti-corruption policy, public administration, judicial and constitutional reforms, reforms in electoral legislation, providing budget transparency. Moldova: EU's assistance to Moldova within 2014-2017 is planned in the scope of EUR 335-410 million. EU's support to Moldova is focusing on public administration reform, agriculture reforms and rural development (ESRA program), police reform and border management. Thus reforms in public are regarded as the first step in a new sector of cooperation. This step assumes support in key aspects of public finance policy reform: control of public finances, fiscal sustainability, which is the main condition for support economic growth and transparency of the budget. The program is based on the long-term policy dialogue with the Moldovan and EU government and their joint work in spotting out the specific weaknesses of the present system and jointly agreed reform targets. In general, cooperation all the above mentioned sectors will help -414-

Moldova meet the requirements for access to the EU market under the under the AA/DCFTA (signed in June 2014) through the dialogue both on policy reforms and new legislation, intense support for public institutions and closer cooperation with local civil society(delcour, L., 2014; Delcour, L., 2015; Gylfason, T., 2014; Support for the Eastern Partnership: Stories, facts and figures from the European Neighbourhood Instrument 2014). Georgia: the country is expected to receive between EUR 335 million and EUR 410 million within 2014-2017. During 2014 2017 EU assistance to Georgia is focusing on public administration reforms, agriculture reforms, rural development, good governance support and reforms in justice. In all these sectors, the EU will support Georgia in its intention to meet the requirements for access to the EU market under the Association Agreement and its deep and comprehensive free trade area (AA/DCFTA, signed in June 2014) the same, as in case with Moldova, by means of intense dialogue on policy reforms, new legislation, public institutions support and closer cooperation with local civil society. It is important to note that the agriculture sector employs around 50% of the labor force in Georgia, special attention will be paid to the ENPARD program and the entire infrastructure, connected with Georgia s rural economy, in particular, the support of public institutions and small farmers, non-governmental organizations (NGOs) and associations, the business community, universities and schools(delcour, L., 2014; Delcour, L., 2015; Gylfason, T., 2014; Support for the Eastern Partnership: Stories, facts and figures from the European Neighbourhood Instrument 2014). Armenia: the expected support to Armenia varies between EUR 140 million and EUR 170 million. During this period EU's assistance to Armenia is being focused on three key aspects of cooperation: public administration reform and justice reforms, private sector development. In all the sectors, the EU will support Armenia in realization of the ENP action plan priorities through the intense dialogue on policy reforms, new legislation, support for public institutions and closer cooperation with civil society. In 2014, the EU provided EUR 34 million of bilateral assist to Armenia. In October 2014 a package of EUR 19 million was adopted to finance a new program on human rights (EUR 12 million) and a project on small business development (EUR 7 million)(support for the Eastern Partnership: Stories, facts and figures from the European Neighbourhood Instrument 2014). Azerbaijan: EU's assistance to the country varies between EUR 77 million and EUR 94 million. EU assistance to Azerbaijan in 2014 2017 is focusing mostly on education and skills development; reforms in justice and support for regional and rural development are also expected. The same as in case of other EaP countries, cooperation in the above mentioned sectors is aimed at helping Azerbaijan with priorities of common interest through dialogue on policy reforms and new legislation, support for public institutions and closer cooperation with civil society. In 2014, in frames of bilateral aid the EU provided Azerbaijan with EUR 21 million. The new package was adopted in September 2014 and focuses on intense support new project on education and skills development (EUR 19 million). A separate action will offer direct financial support to civil society organizations, which, however, would likely require more favorable political environment and a less limiting legal framework to perform their activities in the country(delcour, L., 2014; Delcour, L., 2015; Gylfason, T., 2014; Support for the Eastern Partnership: Stories, facts and figures from the European Neighbourhood Instrument 2014). Belarus: within the last period the county showed no clear interest in deeper cooperation with the EU and for all this time its position remained in the end of the list of countries with more limited ambitions. The country is expected to obtain EUR 71 million and EUR 89 million indicatively planned within 2014-2017. EU assistance to Belarus will focus on neutral sectors of mutual interest: social inclusion, the environment protection, local and regional economic development. EU will also help Belarus with technical dialogue on policy and new legislation reforms; closer cooperation with a wide range of civil society organizations remains among the key -415-

aspects of bilateral assistance. From all the above mentioned types planned reforms, special importance was given to the external governance, that can be seen as the main purpose of EaP, which is "to create the necessary conditions to accelerate political association and further economic integration between the European Union and partner countries aims to "support political and socio-economic reforms of the partner countries to facilitate convergence the European Union and has developed "close ties between partner countries (Council of the European Union, 2009: 6). In other words, it follows the democratic modernization of the partner states (Soare 2013: 136). 3. Conclusions and recommendations The last two years of intense dialogue between the EU and EaP countries demonstrated deep differences of orientation among the Eastern partner countries those that were prepared to move to much deeper integration with the European Union (EU) and sign Association Agreements and DCFTAs(Georgia, Moldova, Ukraine), and those with more "limited ambitions"(belarus, Armenia, Azerbaijan). The whole region was thrown into a state of heightened uncertainty namely insecurity, created by pressure from Russia, that not only to prevented countries from developing closer ties with the EU, but also demonstrated its absolute violation by interfering into the of a neighbors territorial integrity. This has significantly influenced EaP countries in their course for EU integration. Certain countries Ukraine, Georgia, Moldova did express their ever high interest in deepening cooperation with EU, others remained in uncertain "neutral" state (Belarus) and some countries Armenia, Azerbaijan have even expressed their course on deepening cooperation with Russia. In general, within the next few years is possible to clear up the following areas of potential cooperation between the EU and EaP countries: The EU should carefully differentiate between the six EaP countries. The result of statistic reports once again prove that the differential approach to each EaP country is the only way to the effective "feedback" cooperation between the EU and EaP partner countries. There is no reason for the EU to expect any significant results from investing into the low-effective sectors of cooperation with certain countries (People-to-People in case of Azerbaijan; Political dialogue in case of Belarus). More attention, financial support and technical assistance should be, first of all given to the "perspective" partners, willing to "integrate" with the EU economy and ready for providing necessary reforms (Political dialogue and Economic integration with Ukraine and Moldova. Intense support should be provided to Ukraine to help it to reorganize its system of governance, political stability and support its course for transition to market economy.) In accordance with the second phase of the Visa Liberalisation Action Plan the EU Council should solve the question of visa-free travel for Georgia and Ukraine (which has been already granted to Moldova in 2014). Special attention should be paid to the Comprehensive Institution Building program; the support should be based on the more for more principle of enhanced support, the preference in financial assistance should be given for those countries that reach demonstrable reforms. The EU should keep on supporting civil society and expert controlling of realization of EU support. Intensive dialogue and support to civil society, informing about the benefits of integration with the EU should be provided to the Armenia, Azerbaijan and Belarus. In these countries EU should actively support non-governmental institutions, human rights, freedom of expression, independent media. To increase the transparency of the multilateral track performance, the EU should systematically provide information related to meetings and pointing out key results of these meetings. -416-

Obviously, further development of the Eastern Partnership will depend on the results of the reforms, implemented by the partner countries within the next few years. In the best possible perspective even if all the planned objectives of the would be reached, AAs and DCFTAs signed and free movement of persons provided, both the EU and EaP countries should now start preparing for the further incentives within the Eastern Partnership, that would be a new level of their future cooperation. Acknowledgement: This research was financially supported by the research grant of University of economics: VŠE Praha F2/7/2014 "New forms of Governance in the light of financial and debt crisis References [1] Comission of the EC, 2008: Communication from the Commission to the European Parliament and the Council Eastern Partnership. Brussels, COM (2008) 823 final, {SEC (2008) 2974}, 3. 12. 2008. [2] Comission of the EC, 2004: Communication from the Commission to the Council and the European Parliament European Neighbourhood Policy: Strategy paper. Brussels, Commission of the European Communities, COM (2004) 373 final. 12. 5. 2004. [3] Delcour, L., 2015. In need of a new Paradigm? Rethinking the European Neighbourhood Policy /Eastern Partnership. On-line version, available at: http://eceap.eu/wpcontent/uploads/2015/04/eipk-v%c3%b5rguv%c3%a4ljaanne-20.pdf. [4] Delcour, L., 2014. Towards a Fragmented Neighbourhood: Policies of the EU and Russia and their consequences for the area that lies in between (with H. Kostanyan), CEPS, 2014. [5] Eastern Partnership Implementation Report 2014, online version, available at: http://eeas.europa.eu/enp/pdf/2015/enp-regional-report-eastern_partnership_en.pdf. [6] European Bank for Reconstruction and Development. Transition Report 2013, available at: www.ebrd.com/documents/comms-and-bis/pdf-transition-report-2013.pdf. [7] European integration index 2011 for Eastern Partnership countries. [2015-06-26] Available at: http://www.eap-index.eu/sites/default/files/eap%20index%202011.pdf. [8] European integration index 2012 for Eastern Partnership countries. [2015-06-29] Available at: http://www.eap-index.eu/sites/default/files/eap%20index%20%202012.pdf. [9] European integration index 2013 for Eastern Partnership countries. [2015-06-28] Available at: http://www.eap-index.eu/sites/default/files/eap_index_2013.pdf. [10] European integration index 2014 for Eastern Partnership countries. [2015-06-29] Available at: <https://http://www.eap-index.eu /sites/ default/files/ EaP%20Index%202014.pdf. [11] European Commission Press release. European Commission to Support SMEs and Entrepreneurship in Ukraine. Available at http://eap-csf.eu. [12] EU-Commonwealth of Independent States (CIS) - statistics on international trade by CIS country. On-line version available at: http://ec.europa.eu/eurostat/statistics-explained /index.php/eu-commonwealth_of_independent_states_%28cis%29 statistics_on_ international_trade_by_cis_country#eu-28_trade_in_goods_by_cis_country. [13] EU-Ukraine Association Agreement the complete texts. [2015-04-11]. Available at: <https:// http://ukraine-eu.mfa.gov.ua/en/page/open/id/2900. -417-

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