EU Integration: How Europe Spends Budgets and What Ukraine Must Change

Ukraine's path toward European Union membership requires sweeping changes to public procurement — one of the most scrutinized areas in accession negotiations. A new analysis by Ukrainian Pravda journalist Ivan Lakhtionov examines how EU member states manage budget expenditures and what legislative and institutional transformations Kyiv must complete.

How the EU Regulates Public Procurement

EU public procurement is governed primarily by Directive 2014/24/EU and Directive 2014/25/EU, which mandate open competition, non-discrimination, and transparency for contracts above defined thresholds. Member states are obliged to publish all tenders on TED (Tenders Electronic Daily), the official EU procurement portal, giving every company across the bloc equal access to government contracts.

Key principles include equal treatment, non-discrimination, transparency, mutual recognition, and proportionality. Contracting authorities must provide reasoned justifications for contract awards and keep detailed procurement records accessible to audit bodies, including the European Court of Auditors.

Ukraine's Current System

Ukraine already operates ProZorro, an electronic procurement platform considered one of the most transparent globally. Since its launch in 2016, ProZorro has processed over four trillion hryvnias in contracts and won international recognition, including the Open Government Award.

However, alignment with EU directives requires more than a digital platform. Ukraine must harmonize its procurement thresholds, expand the scope of entities covered, strengthen its review and appeal body — the Antimonopoly Committee of Ukraine — and ensure that procurement decisions can be effectively challenged in court.

Key Reforms Required

Analysts identify several priority areas:

• Transposing EU Directives 2014/24 and 2014/25 into Ukrainian law with full legal precision
• Strengthening the independence and capacity of the procurement review body
• Aligning remedies and appeal procedures with EU standards to ensure effective judicial protection
• Expanding e-procurement to cover concessions and defense procurement in line with Directive 2009/81/EC

Ukraine's candidacy for EU membership, granted in June 2022, has accelerated reforms across many sectors. Public procurement reform is explicitly listed as one of the benchmarks Ukraine must meet before accession talks can progress, alongside anti-corruption measures and judicial reform.

Progress in this area also has direct financial implications: access to EU structural funds and cohesion funding post-accession would be conditioned on a fully compliant procurement system, making reform both a legal obligation and an economic imperative. Earlier this month, Finland allocated 290 million euros in defense assistance to Ukraine, signaling continued Western financial commitment while Kyiv pursues institutional alignment with European standards.