Reforms in Ukraine – A second act or a second wave?

Matti Maasikas,
EU Ambassador to Ukraine

In theatre, the second performance is often a harder act than the premiere. For the latter, we share the excitement of the troupe, feel the inspiration, the tender sense of novelty… whereas the second performance can entail a sense of routine, the mundane of everyday life.

One could feel something similar in the Ukrainian reform process recently. The landslide victories of Volodymyr Zelenskyy and his newly formed Sluha Narodu party in the 2019 presidential and parliamentary elections enabled a hitherto unseen reform drive. The “monomajority” of the party in the Verkhovna Rada adopted dozens of long-awaited laws, as proposed or revived by Zelenskyy´s team and the Government, which was formed mostly of young technocrats. The market for agricultural land was opened, breaking a 20-year taboo. Unbundling in the gas sector was done in accordance with EU law. Decentralisation reform, the forming of new and viable local communities, was finalised. Illicit enrichment was criminalised and the High-Anti-Corruption Court, the last institution to complete the post-2014 anti-corruption architecture, started working. The population concurred with this mood – more Ukrainians said they actually thought the country was heading in the right direction than not, for the first time since 2005.

But then 2020 hit Ukraine, along with the COVID pandemic. And it hit hard. The vested, oligarchic interests, long a formidable force in Ukraine´s economy, media, and politics, appeared to recover from their erstwhile shock and started to gather strength once again. These forces are exploiting a flawed electoral system – which, to be fair, was changed for future elections as the last decision of the outgoing Parliament in 2019 – where one half of MPs are elected in single-mandate districts, providing a Parliament where 50% of representatives are exposed to unhealthy influence, with very little political loyalty or party discipline. In 2020 the “monomajority” ceased effectively to exist. And some  pre-pandemic personnel changes in the Government did not seem to cater for continuing bold reform efforts.

Thus, in the autumn of 2020, the authorities were fighting both COVID and reform fatigue. True, it is hard to expect shining new ideas to kick-start an economy, or a discredited court system, when almost all your energy is dedicated to saving the lives of your citizens from a virus. But the reform that is surely most critical, that of Ukraine’s judiciary, had run out of steam before the pandemic hit. It seemed as though Ukraine may have been preparing for another period of muddling-through, with some progress in some areas, consolidating some earlier achievements. But without the denouement its would-be reform heroes or its loyal audience of international partners would like to see.  Everyday life, routine preparations for a second act of political theatre?

Then at the end of October, a political storm hit the country. The Constitutional Court of Ukraine declared much of the post-Maidan anti-corruption framework unconstitutional. The electronic asset declarations system, the cornerstone of new transparency in political class interests and activities, had to go. Moreover, the list of the pending laws – from the opening of the land market to the laws providing stability in the banking sector – challenged on similar grounds in the Constitutional Court and awaiting verdicts, sent shivers down the spines of Ukraine´s leaders and international supporters.

The asset declarations issue was very much centered on judges. The claimed unconstitutionality of the declarations was based on an assumption that an executive agency, tasked with overseeing the declarations, could not have authority on judges (some of the Constitutional Court´s judges had their declarations under investigation as well). So, it dawned on the Ukrainian political leadership that: a) all their decisions and hard-won reforms could be declared null and void by a court on dubious grounds; and b) that a sweeping judicial reform, a profound change of the way judges are selected, courts administered and how jurisdiction is distributed between different courts, is inevitable. Moreover, the weak justice system had lately became the number one concern for foreign potential investors, replacing broader corruption concerns, previously the main disincentive to invest.

The judicial reform has thus became a key reform to unleash Ukraine´s economic potential, but even more importantly, a litmus test for President Zelenskyy´s resolve to reform the country and stand up to vested interests and powerful lobbies, including those with judicial authority.

The complexity of this reform and the inevitable resistance to it requires a coordinated approach and strong leadership. Some steps have been taken. The Venice Commission, the EU, the US and the G7 support group have all issued recommendations and offered their support, both technical and political. In the Ukrainian political system, however, such a big reform, a reform of a generation, can only succeed with the President´s personal and constant leadership. Zelenskyy, a far shrewder political operator than his opponents had esteemed, has previously shown welcome stubbornness in pursuing unpopular causes like the land market reform. Good, for true leadership entails taking risks for the causes one believes in. In the case of the justice reform, Volodymyr Zelenskyy´s leadership, the credibility of his team and the whole perspective for future reforms in Ukraine is in play.

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