In addition to signing the economic part of the Association Agreement with Ukraine, the first item of the agenda also includes the signing of the Agreement with Moldova and Georgia.
Before lunch, the summit participants will hear President of Ukraine Petro Poroshenko. He is expected to provide a detailed account of the situation in the country and assess the conditions in Eastern Ukraine. This is essential because the developments in Ukraine in the coming hours and days will determine whether a decision will be made in Brussels to move to the third stage of sanctions against Russia. It concerns actual economic or financial embargo.
Contrary to the assertions of some German media that the EU leaders have already agreed in this regard behind the scenes and sanctions are a done deal, the Office of German Chancellor Angela Merkel says that Germany still relies on diplomatic efforts to find a peaceful solution to the conflict. But the final collective word, Merkel's advisers say, is up to the Heads of States and Governments of the EU who, according to them, have always shown a consensus on the issue.
Another intrigue of the upcoming EU summit is Russia's hard-to-predict reaction to the association of the three former Soviet countries with the European Union and the threat of Moscow to impose trade sanctions against Ukraine.
Berlin believes that economic and trade agreement with Ukraine, which will be signed on Friday, does not contradict its existing trade rules with Russia. However, they acknowledge that with both countries being WTO members, Russia has a certain room for maneuver and it has the ability to raise customs tariffs on goods imported from Ukraine without violating international rules.
German government understands Moscow's recent statements in this regard, however, in a way that Russia will not rush with unilateral retaliatory measures and it will try to find a reasonable solution to the problems that may arise after Ukraine's association through dialogue with Kiev and Brussels.
In addition, the Chancellor's advisers explain that if we analyze the trade flows between Ukraine and the EU on the one hand, and Ukraine and Russia on the other, it turns out that they vary widely in the range of goods and they do not compete but complement each other.
Unilateral trade concessions for Ukraine where introduced by the EU in March in advance of signing the economic section of the Association Agreement. These benefits will be valid until October 30, when the final rules enter into force. Hence, there is still 4 months left for negotiations with Russia to settle all the details.