ECONOMIC INTEGRATION OF UKRAINE WITH THE EU UNDER DISINTEGRATION WITH RUSSIA

Abstract

The purpose of research is to analyze the reasons and effects of disintegration with Russia for Ukraine and its association with the EU. Expected results of the Association Agreement with the EU and conflict with Russia in previous research are compared with the actual effects. Export losses of the opposing countries from the economic conflict are calculated and compared. The EU-Ukraine Association Agreement has marked the choice of Ukraine to follow the European social and economic development model. It aimed at decreasing trade barriers, making reforms and engaging Ukraine in international production networks by foreign investment inflows. But the EU and Ukraine did not foresee the severe economic, political and military reaction of Russia, which is a barrier to efficient implementation of the Association Agreement. Decrease in exports to Russia and other CIS countries has not been offset by better access to the EU market. Severe reaction of Russia is politically motivated and is not substantiated economically. All the conflicting parties faced losses from the economic war. Ukraine and Russia were the most affected countries, while Western countries faced minor losses. Restoring cooperation and integration is not possible without changes in foreign policy of Russia or / and other parties.