The Economic Core of the Negotiation Process: What the 2nd and 3rd Clusters of European Integration Will Bring to Ukraine

The second and third clusters of the negotiation process between Ukraine and the EU form the economic foundation that will determine the rules governing the Ukrainian market after the country becomes a full member.

This view was expressed by Viktoria Lobun, advisor to the Deputy Prime Minister on European and Euro-Atlantic Integration, on the “Eurointegration” program with Yuriy Fizer on Espreso and Slawa.TV.

According to her, the second cluster concerns the EU’s internal market and is based on the four freedoms—the free movement of goods, services, capital, and people. The third cluster covers issues of competitiveness and economic growth, including taxation, digitalization, social policy, and business support.

"Regarding the second and third clusters. To put it simply, I would call them the economic core of the negotiation process, because they are what actually determine how economic relations between Ukraine and the EU will function in practice after membership. The second cluster, as you’ve already mentioned in part, specifically concerns the EU’s internal market. That is, it is based on the four freedoms—the free movement of goods, services, capital, and people—meaning the rules under which everything moves between member states without barriers. The third cluster is about competitiveness and economic growth,” she said.

According to her, the second cluster concerns the EU’s internal market and is based on the four freedoms—the free movement of goods, services, capital, and people. The third cluster covers issues of competitiveness and economic growth, including taxation, digitalization, social policy, and business support.

She also noted that Ukraine has been operating within a free trade zone with the EU since 2016, so the process of economic integration has been ongoing for several years.

"This really comes down to issues of taxation, digitalization, social policy, and business support. What does that mean, more specifically? To be honest, I understand that there may be concerns, and we’re also hearing narratives that businesses might close or might not survive, but that’s not entirely true. And, of course, if we look at the experience of previous enlargements, it wasn’t the case that all businesses closed down and stopped operating. On the contrary, in Poland, for example, I believe the number of businesses doubled after joining the European Union. We’ve also had a free trade zone in place since 2016, meaning we’ve actually been moving in this direction for a decade. This isn’t something new for us,” she said.

According to Viktoria Lobun, European integration is not a “one-time shock” but involves a gradual transition with transitional mechanisms for various sectors of the economy. She noted that countries in Central and Eastern Europe, particularly Poland, the Czech Republic, and Slovakia, have already gone through similar processes.

At the same time, as the official emphasized, although some companies may not be able to withstand the competition, the overall trend following EU accession has been positive—in particular, with the growth in the number of small and medium-sized businesses.

"And I would like to note that integration—you know—is not a one-time shock; it is a gradual process with transitional mechanisms. That’s why negotiations take a certain amount of time to agree on which sectors will adapt, at what pace, and with what level of support. As I’ve already mentioned, other countries that are now members—Poland, the Czech Republic, and Slovakia—went through this process. And while some companies did close down, new ones emerged, and there were significantly more of them. “During the first decade—if I’m not mistaken—after Poland’s accession, the number of small and medium-sized enterprises nearly doubled. When it comes to the wallet, well, you shouldn’t expect, you know, an immediate drop in prices at the moment of accession, and it would be dishonest to promise that, but there are two mechanisms that consumers actually feel,” she added.

She also emphasized that a rapid drop in prices following EU accession should not be expected; however, competition and uniform market rules will help curb inflated prices and protect consumers from counterfeit products.

"First, competition prevents artificially inflated prices in markets closed to imports. Second, it provides protection against unfair practices. That is, we’re talking about counterfeit goods, hidden prices, or false labeling. In the single market system, this isn’t just, so to speak, a provision in the law. There are real sanctions and supranational oversight behind it,” she noted.

Viktoria Lobun also emphasized that the EU’s single market comprises over 450 million consumers and trillions of euros in turnover, opening up new export opportunities for Ukrainian businesses. According to her, following integration, technical, regulatory, and certification barriers to entering the European market will disappear.

"In other words, people get what they were promised for their money. And this applies to both the labor market and business opportunities, because the EU’s single market represents over 450 million consumers and, if I’m not mistaken, over 15 trillion euros in turnover. So for a Ukrainian company, I would view this not only as a threat or a challenge, but also as an opportunity. In other words, this is a concrete sales market, and today, in order to sell to the EU market, you have to overcome barriers—technical, regulatory, and certification barriers. After integration, these barriers will, accordingly, disappear,” she concluded.