Adhesion to the EU, to seize the money of Russia necessary to rebuild Ukraine: analysts | Russia-Ukraine War News
The negotiations of ceasefire between Russia and Ukraine could soon be underway, but the economic recovery of Ukraine will be hampered unless the European Union exceeds the members of the country torn apart by the war and provides hundreds of billions of insurance and investment of euros, tell Al Jazeera.
“I think what Ukraine needs is a kind of future where it will have a stable and defensible border, and that will only come, I think, with the EU membership,” the historian Phillips O’Brien told Al Jazeera.
President Donald Trump’s American administration gave Ukraine and Russia last month a cease-fire proposal that excluded future NATO members from Ukraine, satisfying a key demand from the Kremlin and leaving Ukraine without the security guarantees it seeks.
“What company will really take the risk of getting economically involved?” asked O’Brien. “With NATO out of the table, I think that if Ukraine will have a chance to rebuild and be integrated in Europe, it will have to be through an accelerated EU adhesion.”
This membership is in no way assured, although the European Commission began negotiations in June last June, and Ukraine has the support of EU heavy goods vehicles like France and Germany.
If Ukraine becomes a member of the EU, he would still be confronted with a devastated economy requiring a vast investment.
The kyiv School of Economics (KSE) estimated that between the large -scale invasion of Russia in February 2022 and November from last year, the Moscow assault had destroyed $ 170 billion in infrastructure, the most affected housing, transport and energy sectors.
This figure did not include damage suffered in almost a decade of war in the eastern regions of Luhansk and Donetsk since 2014 or the loss of 29% of the gross domestic product (GDP) of the invasion in 2022. The estimate did not welcome the loss of almost a fifth of the territory of Ukraine, which Russia no longer occupied.
This territory contains almost half of the unexploited mineral wealth in Ukraine, of an estimated value of 12.4 billions of dollars, according to SecDEV, a Canadian geopolitical risk company.
Nor does it include certain types of reconstruction costs, such as chemical decontamination and mines cleaning.
The World Bank has put the cost of damages in slightly higher infrastructure this year, at 176 billion dollars, and predicts the cost of reconstruction and recovery at around 525 billion dollars over 10 years.
“ The Kremlin has certainly looted the occupied territory ”
Economic war is part of Russia’s strategy since the invasion of Donetsk and Luhansk in 2014, argued Maximilian Hess, risk analyst and Eurasia expert at the International Institute for Strategic Studies.
“The Kremlin has certainly looted the occupied territory, including for coal coke, agricultural and iron products,” Hess told Al Jazeera.
The KSE estimated that Russia stole half a million tonnes of cereals, included in the bill on damages of $ 1.9 billion in the agricultural sector.
Using a long -range rocket, Russia has also targeted industrial centers that are not under its control.
Ukraine has inherited a series of factories from the Soviet Union, including the Kharkiv tractor plant, the Zaporizhia automotive plant, the manufacturer of Pivdenmash rocket in Dnipro and massive steel factories.
“All were targeted by Russian forces,” said Hess in his recent book, Economic War. “Russia’s attacks were, of course, mainly aimed at devastating the Ukrainian economy and weakening its capacity and its desire to fight, but they also increased the cost of western Ukraine in the conflict, which the Kremlin hoped would lead to a reduction in support for kyiv.”
Thanks to occupation and targeting, Russia has managed to deprive Ukraine in a flourishing metallurgy sector.
According to the United States Geological Survey, metallurgical production decreased by 66.5% following the war.
This is a large loss, given that Ukraine produced once almost a third of the iron ore in Europe, Russia and Central Eurasia, half of the region’s manganese ore and a third of its titanium. He remains the only producer of uranium in Europe, an important resource in the quest for the continent for greater energy autonomy.
Ukraine’s claims have built an industrial defense base of $ 20 billion with Allied Help, a rare economic history in wartime.
This can compensate for metallurgy losses, Hess said: “But only in part and in different regions of the country from which these mines and the metallurgics were concentrated. [metallurgical activities] In places like Kryvyi Rih, Dnipro, Zaporizhzhia and, ideally, the territory finally released from the Russian occupation, will be necessary to win peace. »»
Trump mineral agreement and other instruments
We weeks ago, Ukraine and the United States signed a memorandum of intention to jointly exploit the mineral wealth of Ukraine.
Ukraine is committed to putting half the product of its metallurgical activities in a reconstruction fund, but experts have doubted the idea that mineral wealth can rebuild Ukraine.
“Projects have a long launch period … from five to 10 years old,” Maxim Fedoseienko, head of strategic projects at the KSE Institute, told Al Jazeera. “You must do documentation, assessment of environmental impacts, and after that, you may also need three years to build this mine.”
The United States and the EU could invest in such mines, “said Fedoseienko because” we have more than 24 types of materials on the EU list Materials ”, but they would only contribute to the Ukrainian economy if investments were fair.
Trump presented the mineral agreement as a reimbursement for billions of military aid.
“There is nothing right on this subject. The aid has not been given to be reimbursed,” said O’Brien.
As Fedoseienko said, “It’s not fair if everyone says:” Ok, we will help you in wartime, so you are detained [by] We.'”
In addition to equity, Ukraine needs money. Part of this must come in the form of insurance.
An insurance formula at risk of war supported by the kyiv State reached the United Kingdom in 2023, for example, brought back bulk carriers in the ports of Ukraine and defeated Russian efforts to block exports of Ukrainian cereals.
Consequently, Ukraine exported 57.5 million tonnes of agricultural products in 2023-2024 and was on the right track to export 77 million tonnes during the 2024-2025 marketing year, which ends in June, announced its agricultural ministry.
“There must be a substantial expansion of public insurance products in particular, as well as a decision to seize frozen Russian assets,” said Hess.
Entering some $ 300 billion in money from the Russian central bank held in the EU has been deemed controversial, but the measure now receives support.
“The Russian state has committed these war crimes, has violated international law, has made these damage to Ukraine – which in fact becomes a simple way to help Ukraine rebuild itself,” said O’Brien. “”[Europeans] Have a very solid argument for that, but for the moment, they do not have the political will to do so. »»
The president of Ukraine, Volodymyr Zelenskyy, has already asked Europe to use the money for the defense and reconstruction of Ukraine several times.
What Europeans have done in the meantime is in a way to the reconstruction of Ukraine.
Some $ 300 million in interest payments from Russian assets are diverted to reconstruction each year.
A European Commission program provides 9.3 billion euros ($ 10.5 billion) of financial support designed to take advantage of private sector investments.
Financial institutions such as the European Bank for Reconstruction and Development and the European Investment Bank provide loan guarantees to Ukrainian banks, which gives them cash.
“Thus, Ukrainian banks can provide loans to Ukrainian companies to invest and operate in Ukraine. This is a large ecosystem to finance investments and operational needs to the Ukrainian economy, “said Fedoseienko.
With the Ministry of Finance, the KSE operates an online portal providing information on the various instruments available, which has already contributed to 165 investments at a value of $ 27 billion.
“Is it enough to recover the Ukrainian economy?” Fedoseienko asked. “No, but this is an important program to support Ukraine now.”
