Ukraine has a legislative framework for regional policy that is similar to the European model, but lacks a coherent system that would turn strategies into funded programmes, and programmes into tangible results for territories. Amendments to the basic legislation, a new financial mechanism, the harmonisation of planning and investment systems, as well as specific approaches for affected and border territories are required.

Anatolii Tkachuk, Director of the Civil Society Institute NGO, presented such approaches to legislative reform during the “Decentralisation 2026: Legislative Agenda” forum.

In his view, changes in regional development require preparation by systematically addressing three questions: what already exists in the system, what has changed in it, and what outcome Ukraine is seeking to achieve. Otherwise, reforms will create new problems rather than solving existing ones.

‘When talking about modern reform and modern changes, we have to understand: first, what we have; second, what has changed; and third, what we want to achieve. If we skip even one of these stages, problems will arise.’

The legislative framework exists, but the system does not function as a coherent whole

According to Anatolii Tkachuk, in terms of the structure of its legislation and its approaches, Ukraine already has much in common with the European system of regional development. However, the system established de jure has not yet been fully implemented in practice.

He named the war, budget constraints, the lack of regional development programmes, and the failure to align public investment reform with the Ukrainian and European regional development planning systems as the key reasons.

‘We have a State Strategy of Regional Development – on the whole, a good document. Does it work? No, because there are no regional development programmes. And if a programme is not funded, then all the steps involved become work for the sake of work.’

According to the expert, decisions have to be shaped simultaneously along two dimensions: taking into account the war and the requirements of European integration. These two factors will determine what the new regional policy system should look like.

Step one: to update the Law “On the Principles of State Regional Policy”

Anatolii Tkachuk described the first step as amending the basic Law “On the Principles of State Regional Policy”.

In his view, the changes previously made to it do not, in all respects, correspond to European approaches. In particular, this concerns the types of territories for which special support mechanisms are envisaged.

‘Article 174 of the Treaty on the Functioning of the European Union defines certain types of territories. The Ukrainian law includes other types of territories that cannot operate in line with European practices. Therefore, this needs to be changed.’

In his presentation, the expert proposed bringing Ukrainian legislation into line with European planning principles: harmonising approaches to the typology of territories, clarifying the role of institutions and reviewing the requirements for the development of programmes.

Step two: to transform the State Fund of Regional Development into a fully-fledged financial institution

Anatolii Tkachuk focused separately on the future of the State Fund of Regional Development. According to him, the State Fund of Regional Development was designed as an instrument similar to European funds: with rules for the allocation of resources, a competitive selection process for projects, and support for less developed regions.

At the same time, within the framework of the public investment reform, the State Fund of Regional Development has practically been transformed into a public investment programme. In the expert’s view, this prevents it from functioning as a mechanism for financing regional development.

‘A public investment programme is neither a financial institution nor a mechanism for financing regional development. The State Fund of Regional Development needs to be restructured into a new institution where funds from the Ukrainian budget, international partners and, in the future, funds received from russia can be pooled.’

The expert proposes establishing a National Regional Development Fund – a separate financial institution with transparent rules, modelled on European standards. In his view, such a fund should finance regional development programmes and territorial projects, as well as help Ukraine prepare to work with the EU Structural Funds.

‘If funds for Ukraine become available in the European Union tomorrow, we will not be able to receive them in full. We lack sufficient experience and do not have a financial institution that could cover cash flow gaps when the work must be done first and European funds received afterwards.’

Step three: to align planning, restoration and investment

Another problem is the excessive amount of documentation that communities must prepare without any guarantee of funding for their implementation.

Anatolii Tkachuk reminded that, at community level, a development strategy, a strategic environmental assessment, an action plan, a comprehensive spatial development plan, a comprehensive recovery programme, a recovery plan, a climate change adaptation strategy, an energy efficiency strategy and other documents may all be required simultaneously. Parallel to this, there is a public investment system with its own requirements for medium-term planning, portfolios, and projects.

‘This is two dozen documents for which there is zero funding. We should at least resolve the issue of this chaotic planning legislation, which is not backed by funding.’

In his view, investments in restoration should not be assessed solely on the basis of the need to rebuild a destroyed facility. It is necessary to understand how a specific investment will affect the territory in the future: whether there will be a population there, economic activity, and the capacity to maintain the infrastructure that has been created.

Therefore, the expert proposes creating a sort of “harmonisation filter” – reviewing the requirements for planning documents, integrating investments into the regional development system, and reducing excessive bureaucratic burdens.

Step four: an asymmetrical approach to affected and border areas

According to Anatolii Tkachuk, territories affected by the war, as well as border communities which may continue to face challenging security and economic conditions even after hostilities have ended, require a separate model.

‘Standard rules do not work here due to the objective impossibility of implementing projects in line with general requirements. The new regulatory framework needs to provide for asymmetric conditions for such territories.’

The expert emphasised that whilst the government regularly adopts individual decisions on de-occupied, border, and other territories, without a unified programme it is difficult to assess their effectiveness and understand whether they are indeed improving the situation.

‘Without a programme, there are no indicators of success. And without indicators, it is impossible to assess whether a decision enables progress to be made.’

A strong Ministry and team for negotiations with the EU

All the proposed changes require a strong, specialised ministry capable of coordinating work with other government bodies, international programmes, and the expert community.

According to Anatolii Tkachuk, it is important to ensure that different international technical assistance projects do not create parallel structures or follow separate paths. Their work has to form part of a unified system of regional development.

He mentioned that putting together a team to represent Ukraine in negotiations with the European Union regarding access to future funding mechanisms is no less important.

‘On the Ukrainian side, there have to be people who want to secure European funding without compromising Ukrainian interests. Even those who do not yet know everything can be trained. Such a team can and must be formed.’

 

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Read more about the general legislative agenda, outlined during the forum by representatives of the Parliament, the Government, and international partners, in the article “Delineation of powers, community resources and rules for frontline territories: Legislative agenda of decentralisation”.

Read more about the findings of a survey of community leaders on legislative priorities in the article “Remuneration, personal income tax, and legitimacy of councils: What community leaders named as legislative priorities”.

Read more about the staffing capacity of communities, administrative services, and the legislation on administrative fees in the article “Administrative Service Centres start with people: What communities need for quality administrative services”.

Read more about the powers of local councils, military administrations and special rules for frontline territories in the article “How to retain the legitimacy of local councils during wartime and regulate the functioning of frontline communities”.

Read more about the involvement of local government associations in law-making and their proposals for strengthening the resource base of communities in the article “Local government associations: Draft laws to be developed with communities, and resources to remain locally”.