09:39 GMT +315 December 2017
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    This handout picture taken and released by the Ukrainian presidential press-service shows President of the European Commission Jean-Claude Juncker (R) and Ukrainian President Petro Poroshenko embracing prior their talks in Brussels on August 27, 2015.

    'We Only Control the Transfer': Uncertainty Over EU Aid Spending in Ukraine

    © AFP 2017/ Michail Palinchak
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    The EU’s financial aid to Ukraine has done little to reverse corruption in the country, a new report has found, with EU auditors unable to say how their money was actually spent.

    The analysis from the European Court of Auditors (ECA) found that despite significant impetus for reform in Ukraine, only "fragile" results were achieved through the EU's assistance program.

    "EU support for Ukraine remains a work in progress, despite good efforts by the Commission", said Szabolcs Fazakas, member of the European Court of Auditors responsible for the report.

    ​The report, which looked into public finance management and anti-corruption measures between 2007 and 2015, found while there had been a commitment to reform Ukrainian governance, there was a severe lack of follow through.

    "At the time of our audit, there was a strong political commitment to public administration reform. But management changes jeopardized the reforms and low salaries created openings for corruption. Further steps are needed to meet objectives," Fazakas added.

    ​The report noted that Ukraine's political crisis, which featured the 2014 Euromaidan protests and eventual overthrow of Viktor Yanukovich's government, was among the issues that severely hampered the effectiveness of EU funding.

    "Over most of the period audited, the unstable political, legislative and administrative context limited the effectiveness of EU assistance," the auditors wrote.

    EU: We Don't Know How the Money Was Spent

    Chief among concerns in Ukraine remains corruption and the influence of oligarchs on the country and its governance.

    Speaking to reporters about the report, Fazakas admitted that there was no chance of analyzing how budget support funds had actually been spent in Ukraine, saying: "we can only control that the transfer took place."

    ​As part of EU support, the commission announced plans in 2014 to provide Ukraine with a US$12 billion (€11.2 billion) support package to rescue the country's finances, which included loans from the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) to help with the ongoing reforms process.

    ​However, Fazakas said that this budget support did not allow for EU control over how the funds were spent and how various reform programs were implemented, raising concerns about the use of EU funds in Ukraine.

    "There was an urgency on paying [budget support], in cooperation with IMF, to save Ukraine", Fazakas said, adding that once the funding had been provided, it was "very hard to ask for a right implementation of the program."    

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    Tags:
    EU Aid Fund, oligarchs, spending, reforms, corruption, Euromaidan Revolution, European Court of Auditors, European Commission, European Union, Szabolcs Fazakas, Europe, Ukraine
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