After the recent EU parliamentary elections and the intense conflict between Ukraine and the Russian Federation, an important step has been taken. The EU on the one side and Ukraine, along with Moldova and Georgia, on the other, signed an economic agreement. Troubled Ukraine signs a free trade agreement, so let us have a look at the consequences.

Central and Eastern Europe has changed from the homogeneous area we are used to be familiar with to a more complex terrain. In 2004 a handful of Central European states joined the EU, followed soon by Romania and Bulgaria in 2007. The EU halted its admission process afterwards in an attempt to reassess the state of the affairs in the midst of the economic crisis. Right now, Ukraine, one of the remaining buffer states between the two large powers, the EU and the Russian Federation, decided to take the path towards the first by signing the free trade agreement.

Political remarks on the free trade agreement

“Signing these Association Agreements with Deep and Comprehensive Free Trade Areas should not be seen as the end of the road, but as the beginning of a journey on which the European Union and these three partner countries are embarking together today,”, Barroso, the President of the EU Comission, stated.

The Ukrainian President, Petro Poroshenko, signed the agreement after more than a half a year delay. The previous president, Yanukovych, decided to ignore the accord in November and instead turn its face towards the Russian Federation.

“Ukraine should embark on the path of peace, dialogue and accord. The priority is to conduct substantial talks between the authorities in Kiev and the southeast” Putin states in a rather hypocritical manner, as long as the Russian troops stormed in Ukrainian territory without a thorough prior dialogue.

“It is their sovereign right, but the Russian Federation will have to take measures in case it negatively effects the local market,” Dmitry Peskov, Putin’s spokesperson said.

Poroshenko calls for peace, although signals in his discourse that he does not give up Crimea yet.  It is hardly a substantial indicator of real peace to follow soon, as last week there have been deadly clashes reported between Ukrainian forces and the Eastern separatists.

Although widely regarded as a success, it remains to be seen how the accord’s consequences will translate in an overall improvement of the Ukrainian people’s wellbeing. The country currently struggles with severe economic instability and GDP reduction, as well as a huge shadow economy accounting for around 50 percent of the GDP. The EU, on the other hand, has a straight-forward policy of enlarging the community free market under its own pre-established regulations. We will probably not see milk and honey flowing to Ukrainians too soon, as the national adoption of regulations and the subsequent economic revamping will surely last for a couple of years. The free trade agreement will open wide Ukraine’s gates for large European companies. Oil extraction companies will surely have a say in the future Ukrainian economic life, as the land promises to have rich resources of shale gas.