Ukraine and the European Union have finalized negotiations on a deal that could set the former Soviet republic on the way to full membership of the organization, the European Council head said on Monday.

The Association Agreement has, however, yet to be ratified by Ukraine’s parliament.

“We want to take steps to sign and ratify the Association Agreement as soon as we can, but this will depend on political circumstances,” European Council President Herman Van Rompuy said.

But he also said that recent developments in Ukraine had led to “a difficult atmosphere” between the European Union and Kiev.

The European Union has strongly criticized the jailing of former prime minister Yulia Tymoshenko over a gas deal with Russia in 2009, calling the decision to imprison her politically motivated.

“The perceived deterioration of the quality of democracy and rule of law in Ukraine has a direct impact in our Member-States, in our public at large, and in the European Parliament,” Rompuy said.

Other issues, he said, include a comprehensive justice reform, media freedom and freedom of assembly.

In this context, the parliamentary elections to be held next year will be a litmus test, Rompuy said.

Ukrainian President Viktor Yanukovych responded to the criticism, saying Kiev would take into account all of the EU’s remarks over the “deteriorating quality of democracy in the country.”

“I would like to confirm that the EU remarks will not be ignored,” he said.