The Project publishes Study on State Support to Undertakings in Ukraine

On 25 March 2015, the Project held a workshop for Government officials in Kyiv to present and discuss the first ever Study of State Support to Undertakings in Ukraine. 

Project Experts presented to key stakeholders and media findings and conclusions on State supports provided to undertakings in Ukraine in recent years and discussed these findings in the context of the Law on State aid to Undertakings of July 2014 at a full-day workshop in Kyiv.The main purpose of the Study was to provide Government Ministries, public authorities and institutions and the public at large with an initial insight regarding the objectives, scope, key beneficiaries and estimated amounts of state support to undertakings in Ukraine in recent years. This was the first such study to be carried out in Ukraine and was prepared by two international and six Ukrainian experts.

The Study demonstrates that Ukraine has applied a wide range of State supports to benefit business undertakings in recent years. The forms of these supports included direct budget subsidies, loans, tax exemptions and deferrals, writing off debts, State guarantees and providing additional funds to State owned companies through increased shareholdings. While tax benefits were the main instrument of support for specific sectors and business generally, direct budget subsidies to enterprises (including important sectors such as coal, energy supply, steel and agriculture) accounted for as much as 3% of GDP by 2013. At the same time, regional development programmes were generally under-financed and, in overall terms, the data is heavily weighted by the extent of State support to facilitate consumer gas subsidies (via Naftogaz) and the 40 billion UAH programme which supported the Euro 2012 Football championship between 2009 and 2012.

Opening the Presentation,Mr. Boris Filipov, Attaché at the EU Delegation to Ukraine, said that: “the Study provided important initial insights as to the legislation and programmes to be examined in detail in the preparation of the Ukrainian State aid Inventory. He added that this was one aspect of important preparatory work that needs to be advanced before the Law comes into force in 2017. Other key areas included the early resourcing of the State aid regulatory function at the AMCU and the appointment of State aid contact points at the main economic Ministries and other public authorities”. Ms. Anna Artemenko, of the Anti-Monopoly Committee of Ukraine, welcomed this initiative by the Project and highlighted its importance in regard to the establishment of a functioning State aid monitoring and control system. Dr. Eugene Stuart, EU Project Team Leader, explained that: “in the period up to 2017, there needs to be a growing consciousness of which State support measures might constitute “State aid” on the part of all relevant public authorities. Accordingly, the Study identifies and explains some of the measures which will need to be examined in more detail, included in the Ukrainian Inventory (if they do amount to “State aids”) and reviewed further as regards their continuing usefulness and compliance with EU and international standards”.

The Workshop was attended by officials from the Anti-Monopoly Committee of Ukraine, the Ministry of Economic Development and Trade, Presidential Administration, Cabinet of Ministers, Verkovna Rada, the Ministry of Agriculture, the Ministry of Energy and Coal,  the Ministry of Environmental Protection,  the Ministry of Culture,  the Ministry of Justice,  the Ministry of Regional Development,  the Ministry of Infrastructure,  the Ministry of Industrial Policy,  the Ministry of Finance,  the State Fiscal Service, the State Agency for Investments and media.

The Study is available for download.