Behind our economic cooperation there's also a political willingness of improving relationship between our two countries - Minister of the Economy, Finance and Recovery of France
An exclusive interview with Minister of the Economy, Finance and Recovery of France Bruno Le Maire for the Interfax-Ukraine News Agency:
- Mr. Le Maire, please, tell us more about your visit to Ukraine. What meetings are planned in Kyiv and what deals are going to be signed?
- First of all, I would like to say how happy I am to go to Kyiv, to meet the Ukrainian authorities and to have the opportunity to reinforce the economic ties between our two countries. France and Ukraine share a lot in common: we are both industrial countries, we are countries with an important part of agriculture, we are European countries, fully determined to reinforce the place of Europe on the international stage.
Our economic relation is very dynamic and we are on the right track. I want to give you one single figure: in 2020, total trade between France and Ukraine reached 1.6 billion euros - a very important amount, which remains resilient in spite of the Covid crisis. Now, we want to reinforce and accelerate the economic cooperation between our two countries. This is the purpose of my visit to Kyiv.
Indeed, during my visit, France will sign with Ukraine four strategic intergovernmental agreements for total amount of EUR 1.3 billion. It is very significant! And I want to underline one key point: these projects will contribute to improve the living conditions of Ukrainians. We are talking about potable water, mobility, security and civil protection.
- How much important partner is Ukraine for France? How do you assess the current level of trade between Ukraine and France?
- France has a long history with Ukraine and I am determined to open a new chapter of this long journey from an economic point of view. There is a significant network of French companies in Ukraine: 160 French companies are now established in the country, employing 30 000 people. This is making French companies the leading international employers in Ukraine.
We also want to reinforce our ties on very specific sectors: utilities with potable water distribution, energy, infrastructures and transport such as trains, health and, of course, agriculture. On all those areas, I think that there is a room for deepening and extending the relationship.
- What risks are relevant for French investors today: judiciary, corruption at the central and regional levels, instability of legislation or something else?
For our entrepreneurs, the most awaited reform remains a revamping of the judicial system. In-depth reform of the judiciary is seen as vital today in order to fight corruption, increase economic development, improve the business environment and foster foreign investments. I am deeply convinced that the path of reforms that President Zelensky is pursuing and wants to step up is the right one to improve the attractiveness of Ukraine, to foster FDI and to boost economic private sector-led growth in Ukraine.
- How interesting can the creation of a production base in Ukraine be for French investors, given the Free Trade Area with the EU, the risks for logistics in connection with COVID-19? At the same time, does the closure of the Russian market for products made in Ukraine have an impact?
- The establishment of the Deep and Comprehensive Free Trade Agreement between the EU and Ukraine has clearly encouraged development of investments between our two countries. Despite the COVID crisis which was really a dead-blow to world trade, our exchanges remained resilient in 2020. This is a clear evidence that we have deep and solid economies ties. France is now the sixth largest foreign investor in Ukraine.
Ukraine has strong assets. You are a key neighbor of the EU. Your country has a highly qualified workforce, which is a great advantage for long-term growth and productivity. You have an important and strong industrial base.
- Ukraine and France work on two major contracts - 55 helicopters for EUR 550 million and 20 patrol boats for EUR 136 million. An agreement has also been announced to supply 370 high-altitude fire lifts for EUR 300 million. In Ukraine these contracts are criticized for low localization. What is your assessment? What level of localization do you consider acceptable? What preferential terms can France provide?
- I will present those contracts today with the Ukrainian authorities. But you are raising a key point. If we want to have a strong economic relationship it must be in the mutual interest of our two countries. We fully understand the requests made by President Zelensky who wants French companies involved in those contracts to locate a significant part of their production in Ukraine. This is a very legitimate demand and we acted accordingly.
For example, regarding the contract of electric locomotives, Alstom is prepared to localize in Ukraine up to 35% of the production and maintenance. At the beginning of the discussion, Alstom planned to localize around 20 % of the production in Ukraine. We understood it was not enough. This is a clear evidence of our willingness to take into account the legitimate demand from the Ukrainian authorities.
- Can Carbon Border Adjustment Mechanism (CBAM) and Green Deal as a whole become a new barrier on Ukraine's path to Europe? What help can Ukraine count on in implementing its green course and under what conditions?
- As you know, the EU is working towards the implementation of a Carbon Border Adjustment Mechanism by 2023. Our objective is to respond to climate change and reduce our carbon footprint by tackling carbon leakage more effectively than existing instruments. The European Commission is currently carrying out an impact assessment and will present its legislative proposal in July 2021.
Let me be very clear: this Carbon Border Adjustment Mechanism will be designed in a nondiscriminatory manner between EU and foreign producers. I also want to be very clear that this Carbon Border Adjustment Mechanism will be fully WTO-compatible. We need to ensure that its implementation is transparent and involve third countries such as Ukraine, thanks to a partnership-based and cooperative approach.
This is by no means, a protectionist measure and it will not call into question the terms of the EU-Ukraine Deep And Comprehensive Free Trade Agreement.
- What is France's position on completion of Nord Stream 2 and increasing pressure on Gazprom in terms of relocating Russian gas transmission points to the Ukraine-Russia border and admitting gas from Central Asia and independent Russian gas companies to the Russian pipeline?
- Regarding Nord Stream 2, the position of France has already been very clear. As a matter of principle, France is opposed to any kind of foreign interference in the energy policy of the EU and its member states. It is up to us to decide how to diversify our gas supply and how to reinforce energy security of the EU.
And as you rightly pointed out, Nord Stream 2 project cannot be disconnected from the issue of Russian gas transit through Ukraine. We fully understand the concerns of Ukraine about this question. We are in favor of maintaining Ukrainian transit in sufficient quantities. France was fully supportive of the conclusion of December 2019 Russian-Ukrainian transit agreement, in which the EU acted as a mediator, and we are very much attached to its implementation.
- To what extent are French companies interested in the Ukrainian gas transmission system (GTS), gas storage facilities, and completion of nuclear power plants or construction of renewable energy sources?
- First, let me underline the similarities of our energy mixes. We are two of the largest producers of civil nuclear energy in Europe, which is accelerating our path towards a carbon-neutral economy.
On energy infrastructures, French companies do benefit from a unique know-how and are looking closely at development prospects in Ukraine. To name just a few, our enterprises are interested in the deployment of energy storage technologies, modernization of infrastructures or investment in green hydrogen. In the renewable sector, Total-Eren has just finalized the construction of 215-megawatt wind farm in Kherson region and I see a number of opportunities for further cooperation in that field.
- Which Ukrainian companies from those put up for privatization can interest investors from France?
- I think it is too soon to know exactly what kind of privatization can be of interest for French companies. But let me underline that the privatization program supported by the Ukrainian government is an important undertaking.