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HomeEconomyThe rapid reconstruction of Ukraine is in Europe's own interest

The rapid reconstruction of Ukraine is in Europe’s own interest


The Ukrainians and their friends think mainly about the need to win the war. But if we delay preparations for what comes next, we risk losing the peace. Kiev is aware of this and economic plans for a post-war Ukraine are being formulated. This month’s conference on Ukraine’s recovery in London will be an opportunity for the country’s friends to accept the plans literally and figuratively.

The most ambitious vision is to make Ukraine a driver of Europe’s green transition. Carbon-free energy should be a major target for investment in rebuilding the country, said Rostyslav Shurma, deputy head of the Ukrainian president’s office in charge of economic policy.

With the EU “on the verge of the green transition,” Ukraine offers a number of advantages, he told me in Kiev in April: geographical proximity, significant natural resources for renewable energy generation, and a nuclear sector that can serve green hydrogen production. The country’s strong metallurgy tradition coupled with relatively cheap labor means it can fill a gap in manufacturing and processing as the EU tries to diversify from China. Shurma cited green steel, chemicals and lithium processing as examples.

This vision makes strategic and economic sense for the EU and Ukraine. The relevant competence is there: Ukraine undoubtedly has nuclear expertise and it has managed to connect its wartime power grid to that of the EU. Even after Vladimir Putin’s winter campaign to bomb his energy infrastructure, Ukraine is once again a net exporter of energy to Europe.

Seeing Ukraine as a hub for Europe’s green transition would provide the narrative and conceptual coherence needed for a sincere commitment to rebuilding the country. Once the immediate war drama is over – hopefully soon – less of Europe’s political attention will be focused on Ukraine, not to mention a US that may be gripped by isolationist temptations or worse. The current plans in Brussels for a four-year budget support pledge, intended to force Washington to do something similar, are welcome.

But there is still no strong political will to mobilize the much greater financial support needed for reconstruction than ordinary budget support. Without confidence in sufficient public funding, private investment will not materialize in the amounts required. (Shurma expects 70-80 percent of total reconstruction spending – more than $400 billion in a World Bank-led estimate – will consist of private money.)

So as much as the US saw Marshall’s aid as the tool for shaping post-war Europe in its image and creating new markets for its booming production, Europe must see Ukraine’s rapid recovery today as vital to its self-interest. To secure voter and business support for strong long-term support for Ukraine, look not at their altruism, but at their advantage of having a low-carbon energy supplier, a substitute for China’s supply chains. green industry and a contribution to the hydrogen economy, right? at the border of the EU and ultimately within it.

This ambition would help focus the planning and allocation of reconstruction spending, overcome divisions in Ukraine and between the country and its donors over what to fund, and send a clear signal to the private sector where investment opportunities lie. In addition, if Ukraine is rebuilt at the admittedly higher initial cost of the most net zero-compliant standards and technologies, such as suggested by the German Marshall Fund of the US think tank and others, EU-based green industry companies would have a ready market in which to scale. This should accelerate learning curves and cost savings, including for their home markets, and help Chinese competitors catch up or catch up faster.

One can legitimately ask questions about these plans, such as the risk of excessive dirigism in a country trying to get rid of the remnants of its Soviet heritage. But the greater risk would be a lack of top-down direction. Even in the West, the era of leaving things to the market is over. All countries need to find the right government role in driving structural transformation.

Another question is whether this is too ambitious and lengthy to meet Ukraine’s more pressing needs. All the more reason to agree on the direction now, so that Kiev can invite investors to propose projects for pre-approval, to start building as soon as safety allows. Economic predictability, meanwhile, requires support ranging from war insurance to security guarantees and strengthening Ukraine’s air force.

Ukraine’s military prowess, diplomatic agility and the West’s unity in support have surpassed all expectations. Their economic statesmanship must now do the same.


Merry C. Vega is a highly respected and accomplished news author. She began her career as a journalist, covering local news for a small-town newspaper. She quickly gained a reputation for her thorough reporting and ability to uncover the truth.

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