The European Union and Ukraine’s Western allies have promised to make Russia pay for its invasion, as governments and private investors met in London this week look at funding the country’s reconstruction from the ravages of war.
European Commission’s President Ursula von der Leyen outlined investment plans for Ukraine, underlining that the European Union has a “special responsibility” towards the country in the long term.
Addressing the Ukraine Recovery Conference in London, Von der Leyen said: “This is for Ukraine’s immediate needs. But let’s talk about the future. I believe the European Union has a special responsibility.
“Ukrainians tell us that when they imagine their future, they see Europe’s flag flying over their cities. And I have no doubt that Ukraine will be part of our union,” she added.
This comes as the World Bank has put an estimate of almost €13 billion on Ukraine’s immediate needs to repair the damage caused by the fighting.
However, a recent study by the World Bank, the UN, the European Union and the Ukrainian government said the wider recovery of the economy would cost an estimated €374 billion.
Delegates – from Ukraine’s Prime Minister Denys Shmygal to UK Prime Minister Rishi Sunak and US Secretary of State Antony Blinken – said the Kremlin would ultimately foot the bill.
Blinken told delegates “Let’s be clear: Russia is causing Ukraine’s destruction. And Russia will eventually bear the cost of Ukraine’s reconstruction.”
Meanwhile, Sunak promised to keep tough sanctions in place “until Russia pays up”, and to use seized assets to get Ukraine back on its feet – something the European Union said it would also look at.
In an indication of the sheer scale of the reconstruction needed, Shmygal said the destruction of the Russian-held Kakhovka dam earlier this month caused an estimated €1.2 billion in environmental damage.
But, that did not include losses in agriculture, infrastructure and housing, let alone how much it would cost to rebuild the plant.
Support for Kyiv
Speaking to delegates via videolink, Ukraine’s President Volodymyr Zelensky said “Every day of Russian aggression brings new ruins, thousands and thousands of destroyed houses, devastated industries, burnt lives.”
Zelensky is overseeing a military fight-back using Western-supplied heavy weaponry to regain territory lost to Russian forces since last year.
The Ukrainian president set out his stall for future investment, saying that despite the devastation, Ukraine was ripe for development in sectors from technology and green agriculture to clean energy.
Leaders and representatives from more than 60 countries are attending the International Ukraine Recovery Conference 2023 – the second to be held since the Russian invasion in February last year.
The first, which took place in the Swiss town of Lugano last July, saw allies commit to supporting Ukraine through what is expected to be a hugely expensive and decades-long recovery.
However, African countries have voiced concern that by pumping aid to Ukraine, the West is backing off from pledges to help the continent with development and fight climate change.
Investment from the private sector
Von der Leyen recapped the EU executive’s support package for Ukraine of €50 billion euros over the next four years.
Germany will provide €381 million in humanitarian assistance this year and France €40 million.
The European Bank for Reconstruction and Development announced it is joining forces with the Ukrainian government to mobilise 600 million euros in loans and grants from international donors to ensure the country’s energy security.
A third of that money will go to Ukrhydroenergo, the hydropower entity which has been hit by the destruction of the huge Kakhovka dam on 6 June.
Meanwhile, Sunak has announced UK backing for Ukraine to the tune of €2.75 billion over the next three years, while the United States will provide more than $1.3 billion in additional aid.
As well as government and institutional support, it is hoped more private-sector firms will join the reconstruction effort.
Delegates include captains of industry from major multinationals and corporations, many of whom have signed up to a new Ukraine Business Compact, that encourages trade, investment and expertise-sharing to Ukraine on the back of promises from Zelensky to tackle barriers such as corruption and financial and legal transparency.
Criteria for accession to EU
Ahead of the London conference, Brussels said Ukraine had completed two of seven reform benchmarks set before formal negotiations on joining the European Union can start.
The European Commission, the EU’s executive arm, issued the update in a meeting with the ambassadors from the bloc’s 27 countries.
The EU granted Ukraine candidate status for membership in a hugely symbolic move last June in the wake of Russia’s all-out invasion.
The commission laid out seven benchmarks for Kyiv seen as conditions to start accession talks, including bolstering the fight against widespread corruption and judicial reforms.
EU diplomats said that the two conditions completed related to cutting political influence in the media and reforms to its judiciary.
Ukraine was considered as having made “some progress” on the other five criteria, diplomats said.
The EU executive is set to issue a fuller assessment of Ukraine’s progress in October when it will give its opinion on whether to start membership negotiations.
EU nations such as Poland and the Baltic states are strongly backing Kyiv’s push for membership, while countries such as Germany and the Netherlands do not want to rush the process.
Ukraine’s former Soviet neighbour Moldova was also granted candidate status at the same time as Ukraine.