After the recent declarations, made by the British Prime Minister David Cameron in Brussels, many experts had an impression that Great Britain is drifting apart from Europe. What is the reason for this: the island psychology or some other factors and what consequences might it have for Europe? What reforms started by the British conservatives can be borrowed by Ukraine? The Ukrainian ambassador in the United Kingdom of Great Britain and Northern Ireland Volodymyr KHANDOHII told about it in the exclusive interview to The Day.
“GREAT BRITAIN DOES NOT SUPPORT THE IDEA OF THE MULTITIERED EUROPEAN UNION”
“If you examine the history of the United Kingdom you can see that it has always been slightly distant from continental Europe. Great Britain joined the EU in 1973. I mean that it was not the member of the EU for a long time after it had been founded. In all probability, this position is based on Winston Churchill’s post-war doctrine of ‘three spheres of influence’ grounded on the difference between Britain and continental Europe. Great Britain has always considered global stability comprising the economic one as the cooperation of the three main centers: the US, British Commonwealth created after the empire collapsed, and continental Europe. Even Cameron’s predecessors Margaret Thatcher and John Major pursued the policy: ‘Britain with Europe but not in Europe.’
“On the other hand, I would not dramatize this situation since Great Britain and the EU value each other too much to afford to lose each other. Nearly 40 percent of the British export goes to the EU.
“Probably, the platform Cameron has recently adopted is the protection of the national interests during the debt crisis in the Eurozone. He did not accept the requirements of the EU since Great Britain is not in the Eurozone. The measures suggested could affect London as the global financial center.
“When commenting the results of the summit, the Secretary of State for Foreign and Commonwealth affaires William Hague remarked that ‘the attempts of the United Kingdom to keep control of its budget policy cannot be considered as an isolation.’ In my opinion, regardless of the special position of Great Britain we can predict that this country will continue playing the important role in the EU and will insist that the EU makes the decisions with the participation of all its members within the existing institutions. Great Britain does not support the idea of the multitiered EU.”
What do you think of the scenario pictured by the futurologist Niall Ferguson in his article “Europe 2021” according to which Great Britain will unite with Ireland by that time?
“The recent events give reason for any political predictions and configurations. I think they should be left for political experts. Great Britain maintains close relations with Ireland that is its ally. I think all these predictions are purely theoretical. The economic determinism requiring the cooperation within the EU will finally win. I would not predict the quick collapse of the EU and creation of any other economic or political unions.”
ON MILIBAND BROTHERS’ COMMON POTENTIAL
What are the current tendencies in the British political life? Will the coalition of Cameron and Clegg last for a long time taking into consideration that the latter lost the referendum on the political reform?
“The liberal democrats suggested the so-called system of the ‘alternative vote’ according to which the candidates are ranged according electors’ preferences and the election is in progress until one of the candidates gets 50 percent of votes.
“The failure of the referendum certainly hit the Liberal-Democratic party and its leader Clegg where it hurts. At the same time, the strength of the governing coalition will first of all manifest in its ability to assure the stable economic growth of the United Kingdom. Both conservatives and liberal democrats are interested in preserving the coalition and neutralizing efferent tendencies. That is why I think that in the nearest future the coalition will not break up.”
Are there any politicians of Blair’s or Thatcher’s caliber in the laborites’ camp since it is more Europe-oriented?
“I think it is too early to speculate about the politicians of Blair’s scale in the laborites’ camp. To some extent we could consider Miliband brothers’ common potential. However, a lot will depend on the fact if Ed Miliband is able to finally assert himself as the leader of the Laborites’ party and convince the electors. In the conservatives’ camp the leadership is more determined since Tories are headed by reputable and strong Cameron. However, giving justice to personal premier’s efforts the British hardly compare him with Thatcher.
“The information from the public opinion poll by ICM/Guardian clearly demonstrates this situation. Thus, 48 percent of British positively take Cameron’s work, 32 and 33 percent are positive about Ed Miliband’s and Clegg’s activity, respectively. One elector of five supporting the laborites thinks that Ed Miliband will become the prime minister and one of four electors confuses Ed with his brother David Miliband.
“At the same time all three leaders of political forces presented in the parliament are very gifted and promising young politicians. The time will show if they achieve Blair’s or Thatcher’s political height.”
“REFORMS IN BRITAIN AND UKRAINE HAVE DIFFERENT MOTIFS”
It is known that in 1997 when Blair came to power and last year when Cameron became prime minister both laborite and conservative governments started some reforms. Do you think there are any of them Ukraine could borrow since we want to change and approach the EU?
“It should be noted that reforms in Britain and Ukraine have different motifs since we have different economic weight. Our reforms first of all concern the legislation and expansion of the legislative basis for the economy and creation of the investment climate whereas today Great Britain is the most attractive economy for investments and takes the highest places in the ratings of global agencies. It means that they have nothing to reform in this area. The main point of their reforms is cutting down on budget expenditures. They have to reform their system in order to diminish the pressure on budget caused by the recent economic crisis, threat of its new wave and the problems of the Eurozone. We could adopt the elements of some of their reforms. For example, they are now reforming their police in order to reduce the bureaucratic staff of the police to 16,000 people keeping the number of the policemen working in the primary areas (this condition was accepted after the disturbances in September). Their experience in reducing expenditures for the bureaucracy is interesting for us. This reform provides for wider involvement of the volunteers and local communities into order maintenance and helping the police; implementing the elections for the positions of the police commissioners in 2012 and creation of the National Crime Agency and the National Policing Improvement Agency.
“Have a look at their healthcare reforms. We could adopt a certain unique system comprising three components: free medicine for nearly all the population, insurance medicine, and private clinics. It means that people have a choice.
“Their reform of adoption system is also interesting: it is related to the necessity to protect families and encourage them to adopt children maintained by the government. Certainly, these reforms have to be adapted to our reality.”
Since 2000 Great Britain has been holding road shows. Last year London hosted the conference “Inside Ukraine.” Do these events bring any profit such as the growth of British investments?
“Road shows have been invented long time ago and not by us. I think they are quite efficient promotion tool. If you want to demonstrate the investment attraction of a country you should go to see the people and tell them about it. Last year London held four large investment events. In May there was the 7th Ukrainian investment summit and in October there was the road show of the Ukrainian investment project organized in cooperation with the EBRD. Those were successful events where specific projects were discussed. In particular, the road show presented five or six projects that were being developed and realized. There also was a separate presentation of the Crimea’s investment potential at the London office of the New York Stock Exchange. The Ukrainian business week was held last year as well. Now it is difficult to assess the financial efficiency of those presentations. However, these events certainly draw the attention of the British business environment to our economic reality and the fact that we are carrying out reforms. We have to work to improve the presentation materials. However, in general, it is a promising direction that can bring a flow of investments. I can tell you that regardless of the global tendencies that are not the best last year we watched the British investments in the Ukrainian economy grow and bilateral trade rose by 20 percent.”
How would you explain the growth of the British investments since now the Polish and German investments are flowing from Ukraine?
“It often happens so. Somebody goes away and somebody comes. Certainly, they speculate a lot about the necessity to improve the Ukrainian investment climate and business environment. However, serious steps have already been taken. The president and the government nearly resolved the problem of VAT refunds that for many years was an insuperable difficulty on the way of investments to the Ukrainian economy. In the third quarter of 2011 the British investments have grown by nearly 100 million dollars. Last year Ukraine signed a significant memorandum with the Dutch-British company Shell concerning the development of gas deposits on the Ukrainian territory. The total investments could be up to 800 million dollars. That is why the tendencies are different. We have to work a lot to make our climate more attractive.”
Our oligarchs are buying real estate in London. Why is the British capital so attractive for them?
“Every Ukrainian businessman who bought real estate in London has their own reasons. The London realty traditionally attracts investors from all over the world. The statistics show that most of realty buyers in the British capital are the residents of the US (nearly 55 percent), Asia (nearly 20 percent), and the Middle East (nearly 18 percent). The last studies demonstrate that the share of the realty sale in London makes about 40 percent of the European market whereas its nearest competitors – Paris, Berlin, Moscow, and Frankfurt – cannot boast even half of this sum of investments all together.
“The attractiveness of the London property is due to many factors: the status of the British capital as the world financial center, high market liquidity, and stable growth of the property price. The British government made a major contribution to the demand growth by assuring the openness and transparency of the real estate market through the legislative and market regulation of the purchase and lease.”
ON KYIV’S TRANSFORMATION INTO THE FINACIAL CAPITAL OF EASTERN EUROPE
What should we do to make the Ukrainian real estate attractive for the foreign rich and turn Kyiv into the financial capital of, say, Eastern Europe?
“The first steps in this direction have already been taken. The Kyiv authorities have developed the project of the business-center Kyiv-City that, according to the experts, will give a serious stimulus for the development of the Ukrainian economy. Besides, the final match of Euro-2012 in Kyiv will make a significant part of the Europeans acquainted with our capital and will additionally stimulate the development of the real estate market. I am sure that the tax and customs reforms that are being finalized in Ukraine will also give positive results.
“At the same time we should not forget that the traditions of the London City have been shaped over the centuries whereas the Ukrainian economy was given the market status only six years ago. We are able to achieve such an ambitious goal as turning Kyiv into the financial capital of Eastern Europe. For this we have to certainly continue developing the corresponding market institutions, stimulating the growth of the banking and insurance systems and pursuing the efficient investment policy of the state.”
Is Cameron’s official visit to Ukraine or Yanukovych’s visit to Great Britain planned this year?
“This question is on the agenda of our relations. In particular, we are speaking about the visit of the Ukrainian president Yanukovych to Great Britain that did not happen last year because of the objective reasons. Since the prior attention of the United Kingdom has lately been focused on the peaceful settlement in North Africa and overcoming the crisis within the EU the number of foreign visits was significantly reduced.”
Could you name one or two most important events that have significantly influenced Ukraine?
“First of all, it is the economic instability in the Eurozone that certainly affects the Ukrainian economy that is export-oriented. Secondly, the political processes in North Africa put a number of important tasks for Ukraine, in particular the evacuation of our residents. I think we honestly accepted this challenge.”
