Why the EU losing competitiveness and how Ukraine can help
The European Union is trying to find its place in an increasingly multipolar world. So the prospect of Ukraine's accession is seen by some experts both as a challenge and an opportunity.
The EU enlargement could become a decisive factor in the Union's rethinking of its competitiveness.
A recent report by former European Central Bank president Mario Draghi on the EU's competitiveness paints a rather bleak picture: Europe risks weakening its own strategic autonomy.
Read more about how Ukraine's accession could strengthen the European Union in the column by Ivan Nagornyak, head of European integration at EasyBusiness – Europe is losing the race: why Ukraine can help the EU reclaim leadership.
According to the author, Draghi's report shows that Europe risks falling significantly behind in innovations and green technologies.
Draghi calls for a significant increase in annual investments, amounting to €750-800 billion (4.4-4.7% of the EU's GDP), to address the situation. He also emphasises that around 40% of Europe's imports are sourced from a small number of suppliers and difficult to substitute.
"Moreover, about half of these imports originate from countries with which it is not strategically aligned," notes Ivan Nagornyak, citing the report.
At the same time, Ukraine's accession could strengthen the EU strategic autonomy, the expert says.
According to him, specific data on this are contained in a May study conducted by the think tank EasyBusiness with the support of the International Renaissance Foundation.
"Firstly, Ukraine's natural resources and potential in farming can significantly strengthen the EU's strategic autonomy," writes Nagornyak.
He also mentions Ukraine's technological sector, especially IT, which "can bring new dynamics to the EU digital transformation." According to him, this would help narrow the innovation gap between Europe and other global players, which former European Central Bank president Mario Draghi identifies as a critical weakness in his report.
The expert adds that the green technology and decarbonisation is another key aspect of Draghi's recommendations.
"Ukraine's potential in renewables and nuclear energy can play a positive role," the columnist believes.
In addition, he notes that Ukraine's accession could push the EU towards necessary reforms.
In Ivan Nagornyak’s opinion, the process of Ukraine's integration could stimulate the simplification of bureaucracy in the European Union and the modernisation of its regulatory framework – changes that Draghi considers necessary to enhance the EU's competitiveness.
"At the same time, an important factor that cannot be ignored is the financial consequences of Ukraine's accession," warns the head of European integration at EasyBusiness.
On the one hand, the development of Ukraine’s infrastructure and institutional strengthening will require significant costs. On the other hand, the EU is already facing demands to increase investments in innovation and strategic sectors.
He notes that balancing these competing needs will require careful financial management and possibly new approaches to the EU’s financing mechanisms.
"However, Ukraine's accession could serve as a catalyst for a broader rethinking of the EU's role in the global economy and geopolitics."
In order for this potential to be realised, the EU must view Ukraine's integration not just as another enlargement, but as a strategic opportunity to address its competitiveness challenges," the expert points out.