Stay in Ukraine and continue working, or retire? Despite the war, this is not a question for the German building materials manufacturer Fixit. “We keep having air raid alarms, blackouts, power outages, power cuts,” reports manager Michael Kraus at a German-Ukrainian business forum in Berlin. “Nevertheless, we continue to function.”

Fixit has a plant 100 kilometers south of Kyiv, and a second site is under construction near Lviv. Sales are still 75 to 80 percent of the previous year – although large sales areas have disappeared and, according to the company, transport is only possible to a limited extent because the military needs the cargo space.

The most recent Russian attacks on the infrastructure have “made the company management very thoughtful again,” Kraus admits. “If drones and grenades hit in the immediate vicinity of the plant, that’s a dramatic escalation.” Nevertheless, they want to continue producing in Ukraine.

Building materials are widely used in Ukraine now and in the future. According to the current status, around 130,000 houses have been destroyed, 2,400 schools and 400 companies have been partially or completely destroyed. There are also destroyed roads, rails, bridges and much more. Ukrainian Prime Minister Denys Schmyhal put the amount that would currently be needed for reconstruction at 750 billion US dollars.

Whether this sum will be enough is just as uncertain as the prospect of an end to the war. The destruction continues every day, fueling the recession-inflation whirlwind that grips the country.

Ukrainian Economy Minister Julia Sviridenko, who took part in the German-Ukrainian economic forum via video from Kyiv, reported that the economy had collapsed by more than 30 percent and inflation was at 26 percent. A third of Ukrainians are currently unemployed. “Some forecasts are even more pessimistic,” says Sviridenko.

If you add up the arms deliveries, loans and humanitarian aid that have flowed to Ukraine so far, then the EU, the USA and other countries have already raised around 93 billion euros.

Direct financial aid is needed above all to support the national budget. Sviridenko said the Ukrainian government has opened up 800 state-owned companies for privatization to get money into the budget. “Preserving the economy is just as important to us as winning at the front.”

In view of the magnitude of the task, Chancellor Olaf Scholz calls the reconstruction of Ukraine a “generational task”. “No country, no donor, no international institution can do this alone.” Together with EU Commission President Ursula von der Leyen, Scholz calls for a “Marshall Plan” for Ukraine. That was the name of the program with which the USA financed the reconstruction in Germany and other European countries between 1948 and 1952 with billions of US dollars.

In order to forge an alliance, Scholz, as the current President of the G7, the seven leading democratic economic powers, invited the President of the EU Commission to an international conference of experts. “The aim is to jointly mobilize the international support that Ukraine needs most urgently,” said Scholz. “The more coordinated and transparent this happens, the greater the international willingness to help, and the more private companies will invest in the reconstruction of Ukraine.”

The chancellor also wants to lure the private sector with the fact that Ukraine recently became a candidate for EU membership. “Anyone investing in the reconstruction of Ukraine today is investing in a future EU member state that will be part of our legal community and our internal market.” However, this also means that the logistics and transport sector and the transport infrastructure must be developed in such a way that Ukraine will be fully connected to the EU internal market.

The reconstruction of the energy and heating networks is particularly urgent. The priority is to make them functional again as quickly as possible, emphasizes Scholz. At the same time, however, the course must be set for an efficient and climate-neutral network. “Thanks to the sun, wind and existing grids, the Ukraine has the very best prerequisites for becoming not just a transit country, but also an exporter of sustainably produced energy.”

But that’s still a dream of the future. At the moment, the main focus is on short-term “acute winter aid”, as Federal Minister of Economics Robert Habeck emphasizes. Russia aims to further destabilize Ukraine and drive people out of the country with attacks on the energy infrastructure, with cold apartments and a lack of water. For example, generators, transformers and network repairs. “That has absolute priority.”

But Habeck also looks beyond the war. “Ukraine is a premium trading partner for raw materials, energy and as a supplier.” Every effort to introduce Ukraine to the EU internal market is worthwhile. The federal government will support German companies in their activities in Ukraine within the framework of export and investment guarantees. As soon as the situation is a little more stable again, he would like to go to Ukraine with a business delegation, said Habeck.

A journey in which many companies may well have an interest. The Committee on Eastern European Economic Relations has been working in several working groups on ideas for the reconstruction of Ukraine since the summer. The result is a dossier in which 50 German companies and representatives of large business associations have contributed. It not only deals with topics such as construction, logistics and infrastructure, digitization and energy, but also keeps a close eye on legal developments.

Business hasn’t forgotten that corruption was a big problem before the war. “Now is the right time to start applying EU legal standards in appropriate places,” demands Hans-Ulrich Engel, deputy chairman of the Eastern Committee. “Companies need reliable contacts, quick and transparent tenders and uncomplicated approval procedures in the country.”

Author: Sabine Kinkartz

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The original of this article “Reconstruction as an EU State” comes from Deutsche Welle.