Today the European Commission has issued a regular progress report on Ukraine and the Implementation of the European Neighbourhood Policy in 2007.

According to the report, Ukraine and the EU first established contractual relations in 1994 by signing the EU- Ukraine Partnership and Cooperation Agreement, which entered into force in 1998. On this basis, the EU-Ukraine Action Plan was adopted in February 2005 for a period of three years. Since then, implementation has been guided and monitored on the basis of annual implementation tools, which set out comprehensive yearly sets of priorities and timelines, based on the priorities agreed jointly by the EU and Ukraine. A first progress report was adopted in December 2006. In addition, overall evaluations have been carried out in November 2005, March 2006 and May 2007.

Intensive cooperation through the EU-Ukraine Summit, the EU–Ukraine Cooperation Council, the EU–Ukraine Cooperation Committee, and seven sub-committees, has enabled both sides to progress with the implementation of the Action Plan. Negotiations on a New Enhanced Agreement (NEA) that is to be the successor agreement to the PCA started in Brussels in March 2007.

This document reports on overall progress made on the implementation of the EU – Ukraine Action Plan between 1 November 2006 and 31 December 2007 although developments outside this period are also considered when deemed relevant. It is not a general review of the political and economic situation in Ukraine.

Ukraine continued to make progress in most areas, although the pace of progress stalled somewhat compared to the previous years, in particular as regards economic and structural reforms, also due to the political instability which characterised most of 2007. Ukraine’s positive record in the conduct of democratic elections of 2006 was broadly confirmed during the 2007 early parliamentary elections, and the freedom of the media further consolidated. Other major achievements during the reporting period have been the launch of negotiations on an EU-Ukraine New Enhanced Agreement (NEA), the finalisation of Ukraine’s WTO accession process, the start of negotiations on a deep and comprehensive Free Trade Area as a core element of the NEA, the entry into force of agreements on visa facilitation and readmission, and the positive cooperation with the EU Border Assistance Mission (EUBAM). Co-operation on CFSP matters has significantly increased in scope and in substance. Ukraine has continued to work towards the objectives set by the Agreement on Conformity Assessment and Acceptance of Industrial Products, and has taken further positive steps in areas such as the protection of intellectual property rights. Overall good progress has also been achieved in, for example, the fields of energy and transport.

Constitutional reform to establish the necessary checks and balances between the main state institutions remains a key priority for Ukraine, as do further steps towards consolidating the rule of law through judicial reform, stepping up the fight against corruption, and significantly improving the business and investment climate. While Ukraine has benefited from robust economic growth over the reporting period, reducing inflation and creating the conditions for sustained growth remain the main macro-economic challenges.