Ukraine had a shock without therapy

Macroeconomic situation of Ukraine, Belarus and Moldova, current political circumstances in the region and the tensions in the post-Soviet countries were the main topics discussed during the macroeconomic workshop “Mapping out vulnerable sectors in Eastern partnership countries” on 16 April in Warsaw.

Experts Małgorzata McKenzie and Mykola Ryzhenkow presented the outcomes of the macroeconomic report for the three EaP countries. The report summarized the situation in these countries, in various fields: trade and industry, monetary policy, labour market, and transparency. As the authors stated “At the moment, Ukraine is plunging into a period of deep macroeconomic instability, a situation which is adversely affecting Belarus and Moldova. If one is even to contemplate economic recovery in the region, ending the territorial dispute between Russian and Ukraine is the first essential step”.

The macroeconomic analysis fostered the discussion about the political situation in the region and strategic approaches toward the solution of the problems. James Roaf from IMF and Rafał Antaczak from Deloitte raised the question whether or not external financing constitutes a real incentive for the development of these countries, and also whether the reforms should be implemented radically or rather gradually? Rafał Antczak pointed out that the country’s success, usually, depends in 90 % on internal forces and only in 10% on external help.

Ukraine’s situation often leads to comparisons of post-Soviet satellite countries’ transitions in the region, in particular, to the way Poland has recovered after the collapse of communism. As Sabastian Płóciennik from the Polish Institute of Foreign Affairs remarked, we had a shock therapy in Poland, whereas in Ukraine there was a shock without a therapy. The panellists also agreed that there is no clear vision in Europe as to the strategy for Ukraine. Moreover, the Eastern Partnership was set in an entirely different political context and should now be revised.


The workshop was organized by CASE – Center for Social and Economic Research, and HAS Institute of World Economics (IWE - Hungary) within the project “Mapping out vulnerable sectors in the Eastern Partnership countries – structural change, Visegrad experience and relevance for EU policy”.