The European Union’s landmark decision to open accession talks with war-torn Ukraine and neighbouring Moldova signals a major recognition of the efforts made by the two Eastern European countries to align themselves more closely with the standards, norms and values of the European bloc. The decision will likely provide new impetus for political, judicial, administrative and other reforms in both countries, as well as for Ukraine’s ongoing defence towards Russia’s aggression.

Although Hungary’s veto meant the EU failed to agree on its 2024-2027 financial aid package to Kyiv, Aretera’s baseline scenario assumes that the next EU Council summit, scheduled for early 2024, will see the unblocking of this aid package. In exchange, Hungary, which recently was granted access to €10 billion in frozen EU cohesion funds, is expected to receive an even larger share of cohesion and post-pandemic recovery funding, previously blocked due to rule-of-law and transparency concerns.

While the summit was a setback for the Western Balkans’ accession ambitions, the decision to grant Georgia EU candidate status is also seen a remarkable development. As in the case of Ukraine and Moldova, the decision could accelerate much needed reforms and help the country attract new investment, while it may also reduce political polarization. However, Russia may put economic pressure on Tbilisi to reverse or at least scale back its EU accession bid.

Looking beyond the decision’s symbolism, as well as its short-term political and economic implications, much of what comes next remains uncertain, due to a number of complicating factors, not least Russia’s war against Ukraine, as well as the territorial disputes Georgia and Moldova have with Moscow. Even without these complex factors, past experience suggests EU enlargement can take many years, even up to a decade, as in the case of Croatia, the last country to join the EU in 2013.