Ukraine, a market economy, so sayeth the EU

The European Union has agreed to declare Ukraine a free market economy, handing President Viktor Yushchenko his first big victory as he seeks a closer partnership - and eventual membership - for this ex-Soviet republic in the 25-nation bloc.

The market economy status, which should open EU markets to Ukrainian companies, was the top prize to emerge from the EU-Ukraine summit. But EU officials also backed Ukraine's ambitions to join the World Trade Organisation and called Ukraine's progress "on track."

"All of these are important in their own right, but the greatest importance is the symbolism of a newer and deeper and stronger relationship between the EU and Ukraine," British Prime Minister Tony Blair said during the brief summit in Kiev.

The gathering was the first EU-Ukraine summit since last year's so-called Orange Revolution, during which hundreds of thousands of Ukrainians amassed in the capital to protest at election fraud.

Yushchenko, a Western-leaning opposition leader who won a court-ordered revote last year, hailed the protests as a sign of Ukraine's European values and pledged to secure a place for this poor nation of 47 million in the EU.

An enlargement-wary EU, however, has given only a lukewarm reception. Also, Yushchenko's efforts to join the World Trade Organisation this year suffered setbacks because of strong opposition in parliament, so receiving market economy status was a prize he needed.

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