Ukraine`s prime minister, Yulia Tymoshenko, said the country is taking `serious steps` to get closer to membership of the European Union, according to Thompson Financial.

Speaking here, the prime minister said Ukraine is looking at developing a new enhanced agreement to create a political association where `sooner or later Ukraine will become a member of the EU`.

When asked to give a timeline for membership, Tymoshenko said she would prefer not to give a specific date in case success is not achieved by then.

In order to fulfil that ambition, Tymoshenko said economic integration is essential, particularly building free trade and developing relations without economic barriers.

Based on current GDP levels and the expectation that inflation will decrease to half 2007 levels, Tymoshenko said Ukraine `could be a serious economic partner`.

The government is working on 20 initiatives to improve transparency to ensure obstacles are removed for foreign investors.

Tymoshenko said the move towards privatisation of key sectors is also important.

She said Ukraine is planning to privatise its communications sector in the coming months, as well as its energy distribution network.

Currently, Ukraine has its own natural gas fields but cannot enhance its energy security -- mainly due to inefficient production and corruption.

`Licenses are issued but there is no exploration and zero efficiency,` she said.

Tymoshenko said the government is looking at legislation which would enable investors in the sector to build a more secure relationship with the state on the basis of production-sharing agreements.

Responding to concerns that Ukraine has to choose between building relations with the EU or Russia, Tymoshenko said: `(The question of) either/or is incorrect.`

The prime minister said Ukraine has cooperation ties with Russia in almost every sector and the country will continue to build harmonious relations with Russia in connection with many issues.

She said Ukrainian politicians, before 2004, put national interests second to other interests, which strengthened Ukraine`s energy and political dependency on Russia.

Now, however, Ukraine needs to build relations with Russia as equal partners, diminishing its energy dependency on the country.

`Integration is hopefully towards the EU. Ukraine decided that a long time ago,` she said.

`We are not flirting anymore (with EU integration). We are seriously integrating,` she stressed.

On the prospect of NATO membership, Tymoshenko said `the progress is positive` but NATO is seeking more information in support of the country`s application.