War: German business wants to invest more in Ukraine

War: German business wants to invest more in Ukraine

Ukraine has been fighting against Russia for 20 months. German companies still see potential for investments. Ukraine also wants to expand its defense industry – with German help.

Despite the ongoing war, the German economy wants to invest more in Ukraine. Many companies have a great interest in expanding partnerships with Ukrainian companies, said Peter Adrian, President of the German Chamber of Commerce and Industry, on Tuesday at the 6th German-Ukrainian Economic Forum in Berlin. Chancellor Olaf Scholz (SPD) assured Ukraine of long-term support from Germany, including in reconstruction. “Ukraine can rely on Germany.”

Scholz and Economics Minister Robert Habeck (Greens) pointed out relief for German companies when it comes to state investment and export guarantees. Habeck said he thinks something is starting to happen. It is crucial that trust in investments remains and is rebuilt. It is not natural to invest in a country that is at war.

Zelenskyj: Cooperation has potential

Ukrainian President Volodymyr Zelenskyj said in a video broadcast that Germany is a reliable partner for Ukraine. He pointed out great potential in economic cooperation. The top priority is to expand the defense sector.

Ukrainian Prime Minister Denys Schmyhal emphasized the importance of a joint venture between the German arms manufacturer Rheinmetall and the Ukrainian state-owned company Ukrainian Defense Industry JSC, formerly called Ukroboronprom. This has now been registered with the responsible authorities.

The two companies had already launched their strategic cooperation in May. As Rheinmetall announced, the joint venture will be active in service and maintenance services, assembly, production and development of military vehicles and will initially operate exclusively on the territory of Ukraine. The cooperation is intended to strengthen Ukraine’s defense base and ultimately the country’s national security. “It is intended to gradually build joint capabilities in defense technology in Ukraine.”

Zelenskyj and Shmyhal thanked Germany for arms deliveries. The Prime Minister said all support was needed. Scholz had announced a “winter package” including the delivery of another Patriot anti-aircraft missile system. “Every factory that is not destroyed, every power line that can be protected, every company that continues to produce, ultimately helps to stabilize Ukraine economically.”

Ukraine’s Prime Minister is optimistic

Shmyhal said that after a sharp drop in economic output last year as a result of Russia’s war of aggression, the Ukrainian economy will grow by four percent this year. He also emphasized Ukraine’s reform course on the way to EU accession. The EU will become economically stronger with Ukraine. Frozen Russian assets should also be used to rebuild the country. Schmyhal campaigned for German investments, for example in restructuring the energy supply or in the agricultural sector.

The deputy chairman of the Eastern Committee of the German Economy, Christian Bruch, said that despite the war, a dozen investment projects had already been started in Ukraine. “German companies are currently applying for investment guarantees from the federal government with 30 additional projects.” There are 70 additional project ideas. “Reconstruction has begun and German companies are getting involved.”

According to Bruch, the risk of war can be controlled, especially in the western and central parts of the country. However, more attractive state and private financing offers as well as insurance solutions for transport through Ukraine are needed.

According to economic information, there have been 14 federal investment guarantees totaling 280 million euros since the start of the war and a new coverage volume for export guarantees totaling 140 million euros in 2023.

In addition to private investments, the federal government of Ukraine has already promised greater financial support for reconstruction. An international reconstruction conference is planned in Berlin in June 2024.

Source: Stern

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