EU may grant Ukraine access to single market as part of peace deal
European Commission President Ursula von der Leyen is proposing to grant Ukraine privileged access to the European Union's single market as part of a final peace deal, The Telegraph said.
"Lucrative access to a market of 449 million consumers would bring a much-needed economic boost to help rebuild the war-torn country, which is a candidate to join the EU. The plan would see Brussels choose which sectors to open up to Kyiv and which to keep closed," the publication said.
It is noted that the key to this plan is Ukraine's rapidly developing defense industry, which produces a large number of drones, providing 55% of the weapons used by the Ukrainian army.
Duty-free access to Ukrainian weapons would bring Kyiv money while also boosting the arsenals of EU countries rushing to increase defense spending and production.
"It's already going in that direction," a senior EU official said, when asked whether the European Commission president was prepared to grant Ukraine an exemption from EU rules.
Ideally, the plans would be part of an EU-wide final peace settlement, but they are not contingent on a deal, as exchanging access to the single market for weapons would accelerate Ukraine's membership of the bloc.
"In defence, Ukraine has a lot to give. The integration of its highly innovative and thriving defence industry, with its capacity to scale, could be a firestarter for a much more integrated European defence market," EU's commissioner for enlargement Marta Kos said.
"We are also working on plans to accelerate the integration of Ukraine into many more parts of the Single Market – to attract more investments, to strengthen Europe-wide value chains, and to create new opportunities for both Ukrainian and European businesses. This will be a stepping stone to speed up the reconstruction of Ukraine," she said in her speech this week.
The bloc has already moved to unify Ukraine's electricity market with the EU and will seek to deepen integration in the wider energy market.
Opening up Ukraine's services sector has been discussed, as Kyiv is a major exporter of IT services and goods, with the largest number of outsourced developers in Eastern Europe.
After the invasion, Ukrainian agricultural exports were exempted from tariffs, but an extension of EU agricultural subsidies to Ukraine is not under consideration.