Bankwatch urges EC to make sure all budget support procedures in Ukraine are transparent

February 25, 2011

CEE Bankwatch Network acknowledges the motivations of the European Commission decision to temporarily suspend 30 million euros budget support because of faulty public procurement procedures. Bankwatch urges the EC to inspect all untransparent practices associated with the budget support they provide, not only in the area of public procurement.

On February 22, the EC ambassador to Ukraine, Jose Manuel Pinto Teixeira, announced that EU budget support for Ukraine was not to be paid out because of changes in the public procurement law which made public spending more vulnerable to corruption. In total, over 100 million euros in EU grant money for Ukraine risk being postponed indefinitely.

Non-transparent public procurement is, in fact, not the only problem with how budget support functions in Ukraine, Iryna Holovko, CEE Bankwatch Network national coordinator for Ukraine, says. For example, the transport strategy that is to be financed with EC money was developed without wide public involvement and without mechanisms to allow for public monitoring of its implementation.

EC technical and financial support is very important to Ukraine, added Holovko. But, to make this support as effective as possible, the designing and implementation of all sectoral support should be fully transparent and protected against corruption. The EC needs to work more with governmental officials and civil society in Ukraine to move towards such transparency.