EU to limit Ukraine's access to farming subsidies if it joins bloc

Brussels would "significantly limit" Ukraine's access to the EU's agricultural markets and lucrative farming subsidies if Kyiv became a member of the bloc, according to new proposals for EU enlargement.

The restrictions, which are included in an internal EU Commission document seen by the FT, are designed to ease fears among existing members of being swamped by Ukraine's vast output of cereal grains and oilseed products.

Russia's invasion of Ukraine has accelerated the EU's previously moribund enlargement process, with Kyiv's prospective membership emerging as a lightning rod for debates over whether the bloc's policies and procedures can integrate new members.

The European Commission intends to grant Ukraine only limited access to the bloc's food markets and its farming subsidies worth €55bn a year, under a reformed accession process, in a sop to concerned countries including Poland, France and Italy.

The proposals also seek to bind financial benefits of EU membership to legal and financial reforms by accession countries and make it easier to strip rule-breaking members of their voting rights. They are being debated by senior Commission officials this week ahead of intended adoption on Tuesday.

"For Ukraine, the scale and structure of the agricultural sector . . . and the very high levels of productivity warrant the examination of targeted arrangements that would significantly limit financial support and market access for products such as wheat and grain," the Commission said in the internal document.

In exchange, Brussels will "[support] Ukraine in regaining access to its historic export markets," referring to Kyiv's global shipments that have been severely disrupted by Russia's war.

The document identifies Ukraine, Moldova, Montenegro and Albania as the countries that are currently "most advanced" in their candidatures for EU membership. Those four will be provided with tailored accession plans -- referred to as "road maps" -- that do not commit to fixed entry dates but should streamline their progress.

However, the geopolitical pressure to speed up enlargement created by Russia's war in Ukraine has led some EU capitals to worry that Brussels could cut corners on its rule of law and anti-corruption standards for new members. A spate of Ukrainian corruption scandals has heightened concerns that Kyiv is not as far advanced as the pro-enlargement rhetoric may suggest.

The Ukrainian prime minister's office and foreign ministry did not respond to requests for comment.

EU enlargement commissioner Marta Kos told the FT last year that Brussels needed new rules to ensure there would be no "Trojan horses" joining the bloc.

The Commission's reform proposals include financial and legislative penalties to "ensure continued fulfilment of commitments undertaken during accession negotiations and provide targeted remedies where serious shortcomings risk undermining the proper functioning of the Union," according to the document.

"Objective-based financing instruments" would link access to EU cash to reform progress, while "after accession, the Union's full rule of law toolbox will be deployed to ensure continued compliance", it continues.

In addition to the threat of losing access to EU budget funds, the Commission also proposes reforming its mechanism to strip members of voting powers -- known as the 'Article 7' procedure -- to make it easier to deploy and ensure a "more timely and efficient" response to breaches.

A Commission spokesperson declined to comment on the document.