Today's Contents
The Reporter's Notepad:
- Reconstruction and the Tortured
Just The Facts:
- EBRD, Aon launch €110 million war risk insurance facility in Ukraine
- EIB approves €6.8 billion for energy investments in Ukraine, other countries
- Scholz urges German companies to invest in 'future EU member' Ukraine
- Luxembourg gives Ukraine 110 demining kits, €8 million for energy sector
- EU's foreign chief reiterates call for use of Russian frozen assets to aid Ukraine
- Ukraine bonds without early payouts rise on reconstruction optimism, Bloomberg reports
Here's What They Think:
- Viktor Schlinchak: Trump risks aligning China and Russia against US with quick peace deal in Ukraine
- WSJ: Kremlin's ambitious influence reaches beyond Ukraine
Sober Second Thought:
- Ukraine's innovation and science key to post-war recovery, Kyiv School of Economics says
Reconstruction and the tortured
Dear subscribers,
After the full-scale invasion ends, the full-scale reconstruction must start. One challenge will be mental health of veterans, ravaged by years or intense fighting without pause.
URN Daily attended a seminar yesterday titled "Changing perceptions of mental health in Ukraine," hosted by USAID-backed global non-profit FHI360 to learn more.
The consensus was that, while mental health issues have rapidly been losing their stigma over the past decade, the ferocity and intensity of the war is feeding a dire need for treatment among veterans, and erasing some of the gains made in recent years.
"The good news is that, for the military man, the stigma is decreasing day by day," said Kseniia Vosnitsyna, director of the Veteran Mental Health and Rehabilitation Center at the Ministry of Health of Ukraine, which has treated 10,000 veterans since 2022.
However, "trust in mental health specialists is a special issue because the stigma is created and maintained when veterans encounter low-quality support."
The sheer size of the problem is chipping away at the gains, with poor-quality treatment from overworked or undertrained staff prompting many veterans to avoid further help.
"This first encounter with a mental health specialist who didn't provide the necessary support contributes to this stigma," she said. "And the next time, they will be hesitant to apply for this kind of support."
"Even a well-trained psychologist may be unaware of specifics of working with military trauma. Also, psychologists may be unaware of ways in which we can work with people who survive captivity and torture – this is what we are experts in, and we provide training in this area to professionals, because
"We have 4,000 people who have been in in captivity, and 10,000 are still in captivity, and we will have a huge number of people with the experience of captivity and torture. They will need interventions and support after they are set free."
The intensity of the war is also aggravating mental health issues, she said.
"A lot of servicemen don't have an opportunity to have days off and vacation, and don't have an opportunity to restore the energy their mental health condition," she said. "Even for those who are very resilient, it doesn't work.
EBRD, Aon launch €110 million war risk insurance facility in Ukraine
The European Bank for Reconstruction and Development (EBRD) and professional services firm Aon are launching a new €110 million guarantee scheme in Ukraine to address challenges reinsurance companies face in the country.
The new Ukraine Recovery and Reconstruction Guarantee Facility provides guarantees to international reinsurers to cover war-related losses underwritten by local Ukrainian insurance. The facility will utilize existing market infrastructure to provide protection that private-sector investors need.
Since the Russian invasion of Ukraine in 2022, local insurers have been struggling to offer war risk products. The guarantee is expected to stimulate business activity, paving the way for Ukraine's recovery and reconstruction, the EBRD said in a press release.
The first international participant in the program is UK-based reinsurer MS Amlin, while the first local insurance companies include INGO, Colonnade and UNIQA. The collaboration is expected to enable insurers to offer broader war risk coverage, especially for small and medium-sized enterprises.
The facility will initially cover inland cargo, motor vehicle damage and railway rolling stock, but is expected to expand to a broader range of assets as market demand evolves. EBRD estimates indicate that the facility could cover up to €1 billion worth of good and vehicles each year.
France, the United Kingdom, Norway and the Taiwan Business-EBRD Technical Cooperation Fund are the initial backers of the facility. EU and Switzerland have pledged donor support.
"Grateful to our partners at EBRD for this significant step in boosting investment opportunities and strengthening Ukraine’s economy," said Ukraine's Minister of Economy Yuliia Svyrydenko via LinkedIn.
Earlier this month, EBRD said it plans to allocate €1.186 billion in loans, guarantees, and grants for eight projects in Ukraine. EBRD representative told Ukraine Rebuild Newswire at the time that some of these projects are expected to be signed within the coming days.
EIB approves €6.8 billion for energy investments in Ukraine, other countries
The European Investment Bank (EIB) said on Wednesday it has approved a total of €6.8 billion for energy investments in Ukraine and a number of other countries.
The portion of the funding for Ukraine — the size of which was not disclosed — will be used for urgent energy infrastructure reinforcement and repair.
Other initiatives to be funded through the package include district heating and private-sector renewable projects in France, storage of renewable and battery energy in Greece, solar power in Italy, and wind power in Cabo Verde, among others, the EIB said in a press release.
The financing was announced as part of a larger €15.6 billion package covering areas ranging from security and defense to energy supply and flood protection.
Scholz urges German companies to invest in 'future EU member' Ukraine
German Chancellor Olaf Scholz called on German companies to invest in Ukraine at a German-Ukrainian business forum held in Berlin on Wednesday, adding that the country is on the path to joining the European Union.
My "message to you is that if you invest in Ukraine today and in the coming years, you are investing in a future EU member," Scholz stated.
Scholz noted that growth rates and development opportunities in Ukraine after the war will be equal to those seen only in the Central and Eastern European countries that joined the EU in the last two decades.
"The German economy played a major role in these success stories and benefited from them itself. I hope to see something similar with regard to Ukraine," Scholz stated.
The chancellor also said that around 2,000 German companies are active in Ukraine and that many of them plan additional investments, adding that German businesses show significant interest in both export and investment guarantees.
Trade between Germany and Ukraine is also growing, Scholz said, from just under €7 billion in 2021 to almost €10 billion last year.
Peter Adrian, president of the Association of German Chambers of Industry and Commerce (DIHK), said at the conference that German-Ukrainian trade will reach a record value this year, with a volume of over €12 billion.
Ukraine's Prime Minister Denys said at the event that Ukraine has the potential to meet the demand of German companies for metals and valuable rare earth elements necessary for the development of production.
"We can be a part of the industrial chains with the European Union — mining, processing and supply," Shmyhal stated.
Shmyhal also mentioned defense and security, IT, agriculture, and energy among other areas that could be attractive to German companies.
Luxembourg gives Ukraine 110 demining kits, €8 million for energy sector
Luxembourg's Foreign Ministry said it has provided 110 humanitarian demining kits to Ukraine and announced €8 million in funding for the country's energy sector over the next two years.
The demining kits, worth €1 million, will be sent to Ukraine through the European Civil Protection Mechanism, with transport costs covered by the European Commission.
Since the Russian full-scale invasion of Ukraine in February 2022, Luxembourg has contributed €15 million to humanitarian demining efforts in Ukraine, the foreign ministry said in a press release.
Luxembourg's Foreign Minister Xavier Bettel handed over the kits to a representative from the Ukrainian embassy in Luxembourg, Natalia Anoshyna, on Monday.
Bettel also announced Luxembourg will over the next two years provide €8 million to support Ukraine's energy sector.
The aid will be used for energy equipment in schools, and hospitals, and for water and heating infrastructure as well as to contribute to Ukraine's long-term energy resilience, as per the statement.
EU's foreign chief reiterates call for use of Russian frozen assets to aid Ukraine
Kaja Kallas, the EU's newly appointed high representative for foreign affairs and security policy, reiterated her proposal that about $300 billion in frozen Russian assets be used to aid Ukraine.
Kallas stated that Ukraine has a legitimate claim to the funds the Western countries frozen following Russia's full-scale invasion of Ukraine in February 2022.
In an interview with the Guardian, Kallas also noted that Russian frozen assets held in the EU, some €210 billion of the total, were "a tool to pressure Russia."
She suggested the Russian funds could help cover for "all the damage that Russia has caused to Ukraine," adding the financial support for Ukraine "is not charity," but in the interest of Europe and the US.
If the US cuts aid, "then we need to continue supporting Ukraine, because I'm worried about what happens if Russia wins. I think we will have more wars, bigger wars," Kallas stated.
The G7 group of countries in October reached an agreement on the $50 billion loan package for Ukraine backed by the frozen Russian assets. However, the allies have set aside the option of more direct actions, citing legal risks.
Kallas, the former Estonian prime minister, first floated the idea of using the Russian assets to fund Ukraine's reconstruction last month, during her confirmation hearing in the European Parliament.
"I will not use the word confiscation, because it's really using the assets in a legal way," Kallas told the EU lawmakers in November.
Ukraine bonds without early payouts rise on reconstruction optimism, Bloomberg reports
A Ukrainian sovereign bond offering no cashflow to investors until 2027 is becoming increasingly popular due to a feature that links them to the country's economic recovery, Bloomberg reported.
A diverse range of Ukrainian securities has consistently topped emerging-market rankings since Donald Trump's election victory, on hopes of a quick ceasefire.
One type of security has, however, stood out — a sovereign note maturing in 2035 is trading at around 59 cents on the dollar, 10 cents higher than before Trump's victory, Bloomberg reported on Thursday.
A reason behind this is a feature introduced in the so-called "B bonds," that would lead to larger capital payments if the economy outperforms International Monetary Fund projections, the report said. Those anticipating an eventual end to the conflict view it as a pathway to reconstruction efforts, driving economic recovery in Ukraine.
BlackRock, Royal Bank of Canada, and Allianz are among the largest holders of these bonds, according to data compiled by Bloomberg.
The B bonds maturing in 2035 and 2036 have surged, delivering over a 40% return since they began trading in early September following a $20 billion debt restructuring, according to Bloomberg data.
Viktor Schlinchak: Trump risks aligning China and Russia against US with quick peace deal in Ukraine
US President-elect Donald Trump aims to broker a quick peace deal in the Russo-Ukrainian war with the involvement of China, which is a strategy that risks aligning Russia President Vladimir Putin and Chinese President Xi Jinping against the US, Institute of World Policy Chairman Viktor Schlinchak wrote in an op-ed published by Espreso.
WSJ: Kremlin's ambitious influence reaches beyond Ukraine
While Russia faces a setback in Syria, Russian President Vladimir Putin is meddling in Romania and Georgia, where pro-Kremlin figures are challenging pro-Western leadership, and undermining Ukraine's regional allies, according to an op-ed published by the Wall Street Journal. By influencing elections, supporting pro-Russian parties in Georgia and Romania, Moscow aims to weaken resistance to its broader ambitions in Eastern Europe, the article argues.
Ukraine's innovation and science key to post-war recovery, Kyiv School of Economics says
Innovation is key to economic growth and resilience in Ukraine, particularly in the context of the ongoing conflict, where advances in military and healthcare technologies have been critical, the Economic Policy Advisory Council of Kyiv School of Economics said in a policy paper.
Ukraine's science and innovation sector is facing challenges brought forth by the war, including loss of human capital, destruction of research infrastructure, and diminished international collaboration. Addressing these issues is crucial for post-war recovery, the researchers argued.
The researchers highlighted that the loss of human capital due to war-related displacement and emigration is having significant impact. Estimates suggest that 6,000 researchers of Ukrainian researchers left the country, representing 10% of of researchers, according to the paper.
The loss of human capital can also be compounded, as teachers and mentors who leave the country lead to disruptions in university and PhD training for the next generation. The loss of the "top of the pyramid" can threaten long-term human capital development, future of science, and innovation activities in Ukraine, the researchers argued.
Identifying Ukrainian scientific diaspora is a key resource for rebuilding efforts, the researchers stater. The paper pointed out that diaspora can be used for accessing funding, knowledge exchange, and partnerships with international research institutions.
The Council highlighted the importance of "building back better" by modernizing Ukraine's scientific infrastructure. The existing infrastructure still relies on features from the Soviet system, including weak linkages between research and teaching and low levels of commercialization of research.
The Council identified three priority areas for rebuilding the scientific infrastructure. The first is human capital development. The paper stressed the need for targeted policies to retain and attract scientific talent, which could be achieved through tax exemptions on international research funds.
Integration with the international research community is the second priority area. The researchers emphasized the need to increase integration with global networks, while leveraging Ukraine's expertise in military technologies. Instruments for this priority area include fostering connections of Ukrainian diaspora with international experts and co-financing proposals for grants from regional and international sources.
The final priority area is investment for regional development. The Council recommends decentralizing research activities, as most of the science and innovation work is located in Kyiv. Developing a regional innovation program, while fostering interactions between different universities and research institutions, can create a strong innovation ecosystem.
Gross domestic product in Ukraine grew 4% in the first 11 months of 2024, driven by stable operation of the Black Sea export corridor, funding to rebuild damaged infrastructure and increased machinery output, said Yulia Svyrydenko, Ukraine's deputy prime minister and economy minister.
Ukrainian law firm Sayenko Kharenko published an article explaining expected changes in Ukraine under the greenhouse gas emissions trading system (ETS), one of the European integration obligations.
Law firm CMS Ukraine announced the publishing of its updated Rebuilding Ukraine guide, including opportunities in reconstruction, venture capital activity, the regulatory environment, green investment and other issues.
The Ministry of Finance of Ukraine said Finance Miniser Sergii Marchenko met with Japan's newly appointed Ambassador to Ukraine, Masashi Nakagome, to discuss the outcomes of Ukraine-Japan cooperation and further strengthening ties, particularly in the financial area.
Municipal investment promotion agency Invest in Lviv said the local Formatsia Industrial Park received funding of over 114 million UAH from the Ministry of Economy of Ukraine for construction and infrastructure development.
Igor Khrestin, managing director for global policy at the George W. Bush Presidential Center, announced that the center has released its policy recommendations for next steps to bring just and lasting peace to Ukraine.
URN Daily: Sense Bank and Ukrgasbank for sale? And US seeks to cancel $4.7 billion of Ukraine's debt
