Spanish Ambassador to Ukraine Gerardo Angel Bugallo Ottone arrived in Kyiv to take up his position in October 2013 – literally on the eve of the historic events that have transformed Ukraine over the intervening two-and-a-half years. Ambassador Ottone says his Ukrainian posting has proven one of the most challenging and rewarding of his entire diplomatic career, providing him with first-hand insights into events that have reverberated across the entire continent and, he believes, that promise to shape the future development of the European Union as a whole. Ambassador Ottone spoke to Business Ukraine magazine about the challenges facing post-Maidan Ukraine, the opportunities presented by the Ukraine-EU Association Agreement, and the need for the European Union to play a more decisive role in supporting Ukraine’s transition.
What is your assessment of the post-Maidan reform process in Ukraine and what do you view as the key priorities for the new government?
The goals of the Revolution of Dignity are deserving of full European support. It is no exaggeration to say that events in today’s Ukraine will determine the future of Europe. Ukraine now faces two key challenges – external and internal. The internal challenge is rooted in the fight against corruption. It is already clear that from an economic point of view, the oligarchic system has reached its natural limits. The only realistic choice for Ukraine is closer economic integration into the European Union, which means strengthening the rule of law. This is an essential prerequisite to attract the kind of international investment Ukraine needs in order to get the economy back on the right track. So this battle against corruption will prove decisive in determining the future development of the country.
The people of Ukraine have already made their position clear. The Euromaidan protest movement was all about rejecting the kleptocracy of the post-Soviet years. They were saying no to the oligarchy. It is true to say that Russia’s post-Maidan military intervention temporarily forced the Ukrainian authorities to reach out to the country’s oligarchs for support, but they must now move beyond this stage because it has no future. The oligarchic system simply does not work.
We should not fall into the trap of being overly negative about the progress made since 2014. On the contrary, it is crucial to maintain a sense of perspective and recognize the scale of the challenges facing Ukraine. Reforms like the introduction of the ProZorro digital government procurement system are major breakthroughs. The country I see today is radically different from the Ukraine I first encountered in 2013, and it is important to acknowledge this change. However, these changes risk becoming meaningless if they do not continue. The reform drive should now focus on building up confidence in the country’s rule of law, with key areas being the judiciary and state prosecution service. Any national reform programme on this scale is like riding a bike – if you do not keep moving, you will soon fall off.
How have perceptions of Ukraine among your government colleagues in Madrid and in the Spanish media evolved over the past two-and-a-half years of political upheaval and military conflict in Ukraine?
It has taken some time for people in Spain to develop a detailed understanding of what was actually happening in Ukraine. My colleagues in the Spanish Foreign Ministry have a clear picture of the issues at stake, and personal visits to the country from senior members of the government have helped to foster greater clarity.
Mainstream Spanish media coverage of Ukraine has largely been informed and accurate, even when coming from Moscow-based Spanish correspondents. Problems have only been evident on the far-left and far-right fringes of the political spectrum. The extreme right in Spain seem to regard Putin as the embodiment of ‘Mother Russia’, while those on the extreme left tend to see him as the reincarnation of the Soviet Union. Meanwhile, the Russian media has sought to push its own narratives to Spanish audiences, often with the help of obscure ‘experts’ and unknown ‘publicists’.
Spain underwent its own transition from authoritarian regime to parliamentary democracy in the late 1970s. What lessons can Ukraine learn from Spain’s experience in the post-Franco era?
I do not think there is much Ukraine can learn from Spain’s post-Franco transition. Franco’s Spain was a dictatorship, but it did not have the same rule of law problems present in post-Soviet Ukraine. It was not a corrupt country and it had a developed economy. This made the political transition to democracy far easier. I think the transition of Poland after 1991 offers far greater direct parallels to the processes Ukraine must now undergo.
In terms of EU integration, comparisons with the experience of post-Franco Spain are also of limited use. Franco died in 1975. By 1978, Spain was already in a favorable position to integrate into the EU. In terms of timing, Spain was historically lucky. We were welcomed with open arms and our European integration was widely acknowledged as a logical geopolitical step.
Ukraine faces far greater challenges due to the current internal situation within the EU and because of the Russian factor. On a fundamental level, the EU needs to accept that Maidan is a European problem. If we fail in Ukraine, we will pay a heavy price. A failed state the size of Ukraine would be a nightmare scenario for the whole of Europe. Instead, Europe needs to take ownership of the Ukraine crisis. This does not necessarily mean offering Ukraine the prospect of future EU membership, but it should not be entirely excluded either. The same is true of NATO membership. NATO is not an aggressive organization. It is all about providing security and protection for countries looking to develop democratically. It is strategically and morally wrong to exclude Ukraine from both the EU and NATO.
At this stage, it is crucial not to lose track of the bigger picture. Ukraine is a very important country seeking to rid itself of a corrupt, oligarchic system and struggling to resist Russian attempts to prevent this transformation. Russia is trying to derail Ukraine’s EU integration. The Kremlin must stop Maidan from setting a triumphant precedent. It is in our interests to make sure that Ukraine’s transition succeeds.
Which areas of Spanish-Ukrainian bilateral trade do you expect to benefit the most from the introduction of the free trade component of Ukraine’s EU Association Agreement?
The free trade area came into effect on 1 January 2016. From this date onwards, Spain has privileged access to the Ukrainian domestic market. In the short-term, the agreement opens up new markets through the progressive removal of customs duties. As a result, it will undoubtedly facilitate the entry of goods and services where Spain enjoys competitive advantages. This includes fruits, vegetables, fish, mechanical appliances, ceramics, textiles and pharmaceuticals.
But the DCFTA is much more than just a free trade agreement. It also includes a medium-term process of standardization scheduled to last four years. During this period, Ukraine must fulfill a range of requirements connected to the gradual alignment and adoption of EU norms and standards, including on food safety and technical regulations. The proper implementation of these rules and standards presents significant opportunities for Spanish companies linked to sectors such as civil engineering, infrastructure, banking and insurance – all areas where Spain has proven itself hugely competitive at the international level.
What is your advice to Ukrainian companies looking to develop ties with Spanish partners and establish themselves on the Spanish market?
It is always highly recommended to seek professional business help and advice when thinking of starting your own business anywhere in the world. As long as you get good advice from your Spanish legal representatives and accountants, then there should not be too much to worry about. In time, Ukrainian companies entering the Spanish market will get to understand how the system works in Spain.
Additionally, we as a government are aware that starting a business abroad can be a daunting undertaking in many ways. This is why the Spanish State Department for Trade of the Ministry of Industry, Tourism and Trade offers an English-language website providing a step-by-step guide to the process of starting a business in Spain. And of course, any Ukrainian company interested in doing business in Spain is welcome to contact the Spanish Embassy in Kyiv, where you will be guided and counseled on your first steps.