Ukraine Business News

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The Rome Conference on the Reconstruction of Ukraine will focus on four areas. These are the private sector's involvement, the regional dimension, European integration, and human capital development, said the Italian Ambassador to Ukraine Carlo Formosa. According to him, Italy seeks to define concrete results for each area in close cooperation with Ukraine and with the support of other international donors. Particular attention will be paid to cross-cutting themes and strategic reconstruction sectors, such as energy, infrastructure, the defense industry, and agribusiness. In Italy, companies from both countries are expected to sign significant contracts that will increase the role of Italian production in supporting Ukraine's prosperous future. The Conference on the Reconstruction of Ukraine will be held on July 10-11 2025 in Rome and attended by heads of state and government from 77 countries, totaling approximately 1,800 participants. About 500 companies will be invited, including 150 from Germany, 150 from Ukraine, and 200 from other countries. Formosa also named the reforms that the G7 expects from Ukraine, such as strengthening the rule of law and transparency, eradicating corruption, and improving public administration. https://lnkd.in/dW3Zy2Ha

While in Kyiv, Kallas and Costa confirm the EU's commitment to Ukraine's victory and support for European integration. The EU's High Representative for Foreign Affairs and Security Policy Kaja Kallas arrived on an unannounced visit to Kyiv and stressed that the EU will do everything necessary for Ukraine to win the war against Russia. President Zelenskyy discussed Ukraine's need for air defense systems with Kallas. Following a conversation with the new President of the European Council, António Costa, who also visited Kyiv, the Ukrainian leader said that all conditions are in place to open two negotiation clusters with the EU at the beginning of next year and the rest within the year. Costa confirmed this position and announced that the EU will continue to provide Ukraine with economic, humanitarian, and military assistance. The EU will allocate €4.2B in budget support by the end of the year, and next year, it will transfer €1.5B every month. The funds will come from revenues generated by Russian assets and can be used for defense. Zelenskyy stressed that these funds will be used for weapons production. https://lnkd.in/d4ACEkfu

After the latest massive Russian attack on Ukraine's energy system, Biden promises further support; Ukraine faces long power outages during winter. US President Joe Biden, after the Russian air attack on November 28, made a statement promising further support for Ukrainians. "This attack is outrageous and serves as another reminder of the urgency and importance of supporting the Ukrainian people in their defense against Russian aggression. My message is clear: the United States stands with you," Biden said. He emphasized that earlier this year, the US prioritized the export of air defense equipment to Ukraine. As a result, the Pentagon has already provided Ukraine with hundreds of additional air defense missiles, and deliveries are ongoing. "The Department of Defense continues to provide Ukraine with other critical capabilities, including artillery, missiles, and armored vehicles as part of preparations for winter," Biden added. According to analysts, the last two massive Russian missile attacks on Ukraine's energy sector have increased the risk of long power outages during the winter. The Ministry of Energy of Ukraine noted that a catastrophic scenario in the energy sector has been avoided thanks to the rapid response by energy professionals. https://lnkd.in/dbJe5VgN

What does the peace plan from Trump's special envoy entail? Donald Trump's special representative for the Russia-Ukraine war, Keith Kellogg, outlined his plan for ending the war back in April in an article for the America First Policy Institute. The plan stipulates that future American aid, likely in the form of a loan, will depend on Ukraine's negotiations with Russia and that the US will arm Ukraine sufficiently to defend itself and stop any further Russian aggression before and after the deal. The plan also calls for a tax on Russian energy exports, which will go toward rebuilding Ukraine. Kellogg believes that Ukraine's NATO membership should be postponed indefinitely "in exchange for a comprehensive and verifiable peace agreement with security guarantees." The plan also calls for a freeze on the front line through a ceasefire and establishing a demilitarized zone. Conversely, Russia will receive limited sanctions relief and full relief only after a peace agreement that satisfies Ukraine is signed. Ukraine will not be required to abandon its occupied territories, but it must agree to reclaim them only through diplomatic means. https://lnkd.in/dEJS_fkB

Zelenskyy is considering halting the war in exchange for Ukraine's invitation to NATO, and the occupied territories will be returned diplomatically. President Zelenskyy said that the allies should offer NATO membership to the unoccupied portion of Ukraine to end the "hot phase of the war." He believes that the occupied territories can be returned diplomatically. In exchange, Ukraine should receive a NATO invitation to NATO that extends to its internationally recognized borders, including Crimea, which was annexed in 2014. According to the Ukrainian president, NATO membership can guarantee that "Putin will not return," and a ceasefire without security guarantees from NATO will only help Russia seize even more territory. The president believes that there are grounds for the war to end as early as 2025. Ukraine has all the necessary resources for this, but the will and decision fromits main partners are required. Meanwhile, analysts are convinced that US President-Elect Donald Trump can stop the deepening cooperation between Russia and the DPRK by ending the war in Ukraine, which will change both countries' economic and military needs. https://lnkd.in/ddGp7NmJ

In Ukraine, more than 1,200 agricultural enterprises have closed since the start of the full-scale invasion. At the beginning of 2022, businesses had almost ceased hiring, and people were not looking for work. According to IMF estimates, Ukraine's total losses amounted to 35% of GDP, and many companies stopped their operations or evacuated. As one example, from 2022 to the first quarter of 2024, 1,261 agricultural enterprises closed in Ukraine – this is one of the sectors that has suffered the most. However, despite missile attacks and problems with electricity supply and logistics, the number of individual entrepreneurs has increased by 12% in the last year alone, and Ukrainian business positively assesses their prospects for economic activity. The number of companies that started working in international markets has increased from 4% to 17% in 2023. Another 14% of enterprises planned to expand their business, and 27% considered entering new markets this year. By 2023, Ukrainian businesses had received €4B from international partners, including direct financing, grants, and war risk insurance. https://lnkd.in/dvxFee5D

Ukrainian IT exports may decline by 6% this year. The decline in exports of Ukrainian IT services continues. Even under an optimistic scenario, by the end of 2024, the decrease in volume will be at least 4% compared to last year, and this figure could reach 6%, according to a study by the Lviv IT Cluster. In the end, the industry should expect $6.3-6.45B in export revenue. This means that in 2024, the technology industry will not demonstrate growth over the previous year for the second consecutive year. However, despite the war's challenges, the IT sector remains Ukraine's largest exporter of services; computer services account for 38% of total volume in the segment. In addition, the industry ranks second in the overall structure of Ukrainian exports after food. The share of IT in GDP has decreased against the backdrop of 4.4% GDP growth. Currently, there are 2,118 active, verified IT companies in Ukraine. Of the 51% of top managers planning to expand their representative offices, more than 33% want to do so abroad. The most popular destination is Poland. https://lnkd.in/d3CJZUw9

The new European Commissioner for Agriculture names the Ukrainian agricultural sector the elephant in the room regarding its impact on EU agriculture. Christoph Hansen from Luxembourg has become the new European Commissioner for Agriculture and Food. Hansen comes from a family that owns a large farm in Luxembourg. Hansen has been working in the European Parliament since 2018. During the European Parliament's introduction of the candidate for the post of Agricultural Commissioner, Christoph Hansen assessed Ukraine as the "elephant in the room" regarding its impact on EU agriculture. "The solidarity that the EU has towards Ukraine is not something we should take for granted. We do not need to cause damage to our agricultural sector due to the accession of another country or other countries." He also promised to equalize subsidies for farmers from eastern and western EU member states. Now, countries contributing more to the EU budget will receive more subsidies. The EU provides €60B per year in agricultural subsidies. https://lnkd.in/dCbfgQHN

The head of German intelligence says Russia plans to test the effectiveness of NATO's collective defense. Bruno Kahl, the head of Germany's Federal Intelligence Service (BND), believes that Russia continues to prepare for an actual military confrontation with Western countries, but a full-scale attack by Russia will be preceded by local operations designed to test the strength of NATO's charter. The idea is that Moscow will try to undermine the obligation to provide direct military assistance to NATO members, enshrined in Article 5 of the defense alliance's charter. Russian officials are considering creating an "emergency" for one of the NATO countries, in which other members of the Alliance would not "respond appropriately," Kahl explained. As examples, he cited a possible "short-term attack" on the Norwegian archipelago of Spitsbergen or a conflict with the Baltic states under the pretext of protecting local Russian-speaking minorities. If Article 5 is not invoked in such conflicts, NATO as a defensive alliance faces failure – this is the goal being pursued by the Russian Federation. https://lnkd.in/dfeeH58F