Georgia, Moldova and Ukraine get ready for free trade area

Published in Economics
Monday, 12 September 2016 17:16
Moldova and Ukraine have significantly improved, according to an article on the website of the European Bank for Reconstruction and Development (EBRD). EU funding has provided support to help businesses in Georgia, Moldova and Ukraine, allowing them to take full advantage of unrestricted access to the world’s largest market, the EBRD says, adding that the €400 million funding has helped local entrepreneurs to grow their business, train local partner banks and improve the business environment through policy dialogue with relevant government authorities.
These efforts have resulted in significant improving of production, adaptation to EU standards and  opening new export markets for local enterprises.
The three countries signed Association Agreements with the EU that foresee the establishment of a Deep and Comprehensive Free Trade Area (DCFTA) between each country and the EU.
This development is expected to provide businesses and the economy - from farming to the IT sector - with a vital boost. The EBRD is providing finance to small and medium-sized enterprises in all three countries, supported by the EU with a risk-sharing model. The loans  provided by the EBRD and EU not only help to increase the share of exports, but support the local economy through creating new job opportunities and discovering new market opportunities.
The EBRD started in May 2016 to provide €380 million in loans and trade guarantees to local partner banks and other financial institutions for on-lending to businesses, while the EU is making available €19 million for technical assistance, investment incentives and risk-sharing.
The EU funds are part of the EU4Business initiative, which provides a comprehensive package of support to attract new investments and improve services and products to the benefits of all citizens and consumers across the Eastern partnership region.
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    The event was co-organised by the Bolnisi Municipality and the Mayors for Economic Growth Secretariat.

    Mayors for Economic Growth (M4EG) is an initiative of the European Union, established in 2017 to support mayors and municipalities of the Eastern partner countries to become active facilitators for economic growth and job creation at local level.

  • You Can Learn A Lot About Ukraine By Watching Its Football

    Ukrainian football, which managed to survive shortly after the collapse of the Soviet Union, embarked on a new model of development beginning from the 2000s. The start of the new millennium in Ukrainian football was marked by wealthy businessmen and oligarchs buying or gaining control over the clubs, thereby reflecting the developments that had been occurring in the socio-political and economic life of the country.

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    In the early 1990s, Dynamo Kyiv, the most decorated Ukrainian football club, came  under the control of Hryhoriy Surkis, a Ukrainian businessman and politician, and then passed to his younger brother, Ihor Surkis. Rinat Akhmetov, reportedly the richest man in Ukraine, laid his hands on Shakhtar Donetsk FC carrying his team to the biggest success in the history of Ukrainian football in independent times -- victory in the 2007/2008 UEFA CUP tournament.

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    This trend has become most evident after Euromaidan and the start of Russia's war against Ukraine. The harsh economic situation in the country has hit oligarchs as well: they massively began to give up on their football-related commitments by drastically cutting spending on the clubs they owned or even abandoned them. In such harsh circumstances, oligarchs realized that their clubs had become "suitcases without a handle". As a result, just three years on from 2014, and 20 professional clubs in Ukraine ceased to exist, while many others are eking out a miserable existence. Moreover, many people stopped visiting stadiums, which led to  record-low attendances at stadiums.

    WESTERN MODEL: FOOTBALL AS BUSINESS

    One of reasons that led to such bad consequences is that, over the years of their functioning, national clubs had failed to profit from football. Despite the fact that wealthy businessmen owned Ukrainian clubs, football has hardly developed as a business. Contrary to the Western model, where football and sports is seen primarily as a business activity, in Ukraine it was perceived, to one extent or another, as a way of competition between dissenting business and political camps.

    In the West, the understanding of football as a business is common knowledge. According to the 2018 Football Money League report provided annually by Deloitte Touche Tohmatsu, revenues of the 20 most-generating clubs reached EUR 7.9 billion in 2016/2017, with England's Manchester United securing its position at the top of the rating with more than EUR 676 million revenue in 2017. By comparison, the budget for the whole Ukrainian Premier League (UPL) tournament in 2018 was UAH 13 million (approximately USD 480,000), as former UPL head Volodymyr Heninson said.

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    The poor condition of national football has on many occasions been confirmed by club owners. In 2009, Oleksandr Yaroslavskiy, the then-owner of Metalist FC, admitted that his club is "a non-performing asset," saying, moreover, that there will be no possibility to make money out of national football in the next 10 years.  Nine years later, Ihor Kolomoyskiy, ex-owner of Dnipro FC, confirmed Yaroslavskiy's words, describing his former football club as a project that leads to losses. "Football [in Ukraine] has almost died," he stressed. In an interview with Viktor Vatsko, one of the most prominent Ukrainian football commentators, in early 2019 Ihor Surkis, President of Dynamo Kyiv, answering the question about the business attractiveness of the club he owns, confessed that only if Dynamo was controlled by a true businessman could it have been seen as an asset capable of generating profit.

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    https://ukraineworld.org/articles/ukraine-explained/you-can-learn-lot-about-ukraine-watching-its-football?fbclid=IwAR20Ypi7MOBg7x21ha2Ro-Sdo6cOUA-kTMi2DooV3OEr99vW08KTn4LMXI8

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    BELGIUM: ⅔ OF ALL INVESTMENTS IN THE COALFIELD

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    In 1895, the Russian-Belgian Metallurgical Society was organized in Donbas at the initiative of several Belgian businessmen. In 1914, 31 Belgian companies were already operating there. Ten of them operated in metallurgy, seven – in the mining industry, six – in trams, and five – in producing construction materials and glass.

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    Before WWI, according to the Ministry of Finance of the Russian Empire, 159.1 million rubles of foreign capital were invested in the coal mining industry of the country. The share held by coal enterprises located in the Donetsk coalfield amounted to 118.6 million rubles, i.e. 74%. French capital invested 82 million of the figure, Belgian 24 million, and the capital of other countries of Western Europe reached 12.6 million rubles.

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    DONETSK: A BRITISH CITY WITH EUROPEAN SALARIES

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    In 1869, John Hughes, a British mining engineer from South Wales, founded the Russian-British Novorossiysk (Metallurgical) Society of coal, iron and rail production to raise a capital. In 1870, he moved to the Donbas region where he started to build a plant.

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    KOSTYANTYNIVKA: BELGIAN ARCHITECTURE AND CHEMICAL PLANTS

    Kostyantynivka was built by immigrants from Belgium. As a result, this city can also boast Belgian architectural monuments from those times. The entire city infrastructure is a sequel of initial constructions.

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    The secret of preserving architectural heritage is quite simple. If it is used, its owner maintains it in a decent condition.

    LUHANSK: GERMAN LOCOMOTIVES

    German investment came preferably to Luhansk Region.

    For example, one of the most famous Luhansk enterprises – the Luhansk steam locomotive plant – was founded by the German industrialist Gustav Hartmann in 1896as Russische Maschinenbaugesellschaft Hartmann and renamed Lokomotive factory Octoberrevolution in 1918 after the Russian revolution.

    LYSYCHANSK: BELGIAN HERITAGE ABROAD AWARD

    At the end of the 19th century, a big part of the city of Lysychansk belonged to the village of Verhnie. Here in 1887 the Belgian engineer Ernest Solve launched the production of soda with his Belgian chemical company Solway and a merchant from Perm called Ivan Lyubimov. Unfortunately, the factory is no longer operational – it was destroyed in 2013 before the very beginning of Russian military aggression in Ukraine.

    Along with that, company built houses for factory workers, gymnasium buildings, hospitals, and a church. For example, an up-to-date four-floor hospital in Lysychansk was built by the Belgians.

    The Belgians built a total of 33 objects in Lysychansk. 30 of them have been preserved to this day.

    In February 2018, the architecture of Lysychanskreceived the Belgian Heritage Abroad Award (2017).

    ________________________________________________________________

    Europeans brought not only the technology of industrial productionto Ukraine, but also business skills, management experienceof large enterprises, connections with banking and industrial groups, and the spirit of capitalist entrepreneurship, thereby contributing to the industrialization of Ukraine.

    By the time of the collapse of the USSR in 1991, the Donbas, previously known as "Russian America" and the flagship of industrial Europe, was in a state of decline. The economic ignorance of the Soviet authorities had led to Donbas becoming a backward region in ther 1980s with loss-making production. Today, most of its factories are located on territories occupied by the Russian Federation. Some of them are either ruined or still operate using the equipment installed at the end of the 19th century.

    Sources used in this article:

    Valentyna Lazebnyk, "Steel in the Steppe. View from Ukraine".

    Wim Peeters, "Steel on the steppe".

    Materials from the exhibitions "Foreign investments in Ukraine, end of the ХІХ – beginning of the XX century. Part I: Belgium" and "Foreign investments in Ukraine, end of the ХІХ – beginning of the XX century. Part II: France", organized by the Ukraine Crisis Media Center.

    Sources used in this article:

    Valentyna Lazebnyk, "Steel in the Steppe. View from Ukraine".

    Wim Peeters, "Steel on the steppe".

    Materials from the exhibitions "Foreign investments in Ukraine, end of the ХІХ – beginning of the XX century. Part I: Belgium" and "Foreign investments in Ukraine, end of the ХІХ – beginning of the XX century. Part II: France", organized by the Ukraine Crisis Media Center.

    TETYANA MATYCHAK

     

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