Today's Contents
Reporter's Notepad:
- Finland's strength, and weakness, in helping rebuild Ukraine
Just The Facts:
- Trump proposes Ukraine supply rare earth minerals in exchange for US war aid
- Swedish appeals court rejects $6 billion in claims against Ukrnafta over below-market gas withdrawals
- Foreign firms applied for 2,573 trademarks in Ukraine last year, led by Philip Morris
- Russia sees Saudi Arabia and UAE as possible venues for Trump-Putin summit, sources say
- Council of Europe Development Bank approves €150 million for housing projects in Ukraine
- UNDP, Spain launch €4 million project to renovate 8 schools in Ukraine
Here's What They Think:
- NYT: Ukraine's tech innovation could be key to future warfare security
- Kyiv Independent: Ukraine needs real financial reforms, not just leadership changes
Sober Second Thought:
- Reconstruction funding not enough to return Ukraine's economy to pre-war level, KSE says
Dear subscribers,
After an interesting interview, writing a news story is rarely fully satisfying. A reporter inevitably has to leave out much of the information covered.
So today we're publishing snippets of interesting information from our interview on Friday last week with Antti Vänskä, Finland's special envoy to the reconstruction of Ukraine. The story ran yesterday in the URN Daily, which can also be accessed by premium subscribers here.
And below, in our reckoning, are a couple of the interesting parts we had to leave out:
Finland has a much greater involvement in Ukraine's war and recovery efforts than one would expect from a population of a mere 5.6 million people. That would seem to give the country an advantage in eyeing participation in the coming reconstruction. But it's also starting at a disadvantage to many other European countries.
"One of the obstacles for Finnish companies is that, traditionally, they do not know the Ukrainian market that well," Mr Vänskä said. "We don't have a traditional strong presence in Ukraine so it's a relatively new market for many Finnish companies. There's a lot new things for them to to learn and study."
"Russia was a hugely important market for Finnish companies. Before the war, we had hundreds of companies there. I'm happy that practically all Finnish companies have withdrawn from from Russia it was the right thing to do. At the same time, when they were there they were concentrating efforts in the Russian market and Ukraine was a little bit neglected. So they need a lot of basic information about how to how to operate in Ukraine, which is a market of its own kind."
In an interview with URN late last year, Hanna Loikkanen, investment director of Finnish development finance institution Finnfund, said that any involvement Finnish companies did have in Ukraine was generally handled by their staff in Russia. So when they pulled out of Russia, they lost the little Ukrainian experience that did have.
In another interesting comment, Mr Vänskä said the Finnish authorities are watching the Danish involvement in Ukraine, which is notable in its intense involvement focused on a specific region - around the southern city of Mykolaiv.
"Our policy is different from from the Danish one, in that we have not chosen a particular region or city where we'll concentrate our assistance. We have discussed whether we should have a more regional emphasis, but they so far haven't done that."
Instead, he said, said much of the Finnish support aims to focus on the Ukrainian education system, and that required coordination at the national level.
Education "has to do with the central government. We want to work in cooperation with Ukraine to reform the educational system. That has to do a lot with the authorities in Kyiv."
He said private sector companies also want to be in Kyiv, closer to the decisions and events that shape business in the country, or in the western part of Ukraine, where the physical danger from the war is more distant,
And now, on with the news ...
Trump proposes Ukraine supply rare earth minerals in exchange for US war aid
US President Donald Trump said on Monday that he wants Ukraine to provide the United States with rare earth minerals as compensation for US financial support in its war against Russia.
Speaking to reporters at the White House, Trump said he wanted to see some "equalization" from Ukraine for Washington's "close to $300 billion" in support.
"We're telling Ukraine they have very valuable rare earths. We want what we put up to go into the terms of a guarantee. We want a guarantee," Trump stated.
"We're looking to do a deal with Ukraine where they're going to secure what we're giving them with their rare earths and other things," he added.
Rare earth elements are a group of 17 metallic elements essential in a wide range of modern technologies due to their unique magnetic, electrical, and optical properties.
Ukraine is believed to have significant untapped rare earth element deposits, which could play a key role in the global supply of these vital materials.
In his "victory plan" presented in October, Ukrainian President Volodymyr Zelensky proposed concluding a special agreement with the US, the European Union, and other partners to jointly protect and invest in Ukraine's critical resources and use their economic potential.
Zelensky noted at the time that Ukraine is rich in natural resources, including critical metals worth "trillions of US dollars."
"These include uranium, titanium, lithium, graphite and other strategic and strategically valuable resources that will strengthen either Russia and its allies or Ukraine and the democratic world in global competition," Zelensky has said.
Swedish appeals court rejects $6 billion in claims against Ukrnafta over below-market gas withdrawals
The Svea Court of Appeal in Stockholm has rejected $6 billion in arbitration claims filed by three Cypriot companies against Ukrainian oil and gas company Ukrnafta.
The court upheld an arbitration decision from Feb 4, 2021, rejecting the appeal brought by Littop Enterprises Limited, Bordo Management Limited and Bridgemont Ventures Limited.
The companies — which collectively own 40.1% of Ukrnafta — initiated proceedings against Ukraine in 2015 seeking compensation of $6 billion with interest for the gas withdrawal from Ukrnafta's storage facilities at below-market rates or for free.
The claimants also cited the non-enforcement of Ukrainian court rulings regarding the return of the withdrawn gas, an increase in the rent rate for the use of subsoil, and legislative changes that lowered the requirement for general meetings on joint-stock companies.
The court sided with Ukraine's main argument that the three companies had not contributed to the authorized capital of Ukrnafta and did not quality as investors under the Energy Charter Treaty, making them ineligible to file an arbitration claim, Ukraine's Ministry of Justice said in a press release.
"As a result of considering the plaintiffs' claims, the arbitration tribunal agreed with Ukraine's position regarding the tribunal's lack of jurisdiction to consider this dispute, which was confirmed by the Svea Court of Appeal," said Ukraine's Minister of Justice Olga Stefanishyna.
The three Cypriot companies are reportedly linked to oligarchs Ihor Kolomoisky and Hennadiy Boholyubov, according to a report by the New Voice of Ukraine.
Foreign firms applied for 2,573 trademarks in Ukraine last year, led by Philip Morris
Foreign companies submitted 2,573 trademark applications in Ukraine last year, with more than 40% of the m from the US, Cyprus, and Switzerland, according to the Ukrainian National Office of Intellectual Property and Innovation (UKRNOIVI).
Most of the registered companies are engaged in medical and veterinary products, advertising, and administration.
The number of applications is 37% less than pre-Russian invasion period, when the country's UKRNOIVI received an average of 4,000 submissions annually, Opendatabot reported.
Some 18.4% of the applications are from US companies, while Swiss companies submitted 12.5% and Cypriot entities submitted 9.7%. UKRNOIVI also received applications from businesses in China, the UK and Poland.
Some 711 applications — representing 27.6% of filings — were for medicine, veterinary and hygiene, followed by advertising, administration, and office services with 472 applications.
The top five applicants were Philip Morris Products with 91 applications, followed by Mistral Capital Management and UPL Mauritius with 69 filings each, British American Tobacco with 49 submissions, and Farmak with 45 applications.
Russia sees Saudi Arabia and UAE as possible venues for Trump-Putin summit, sources say
Russia sees Saudi Arabia and the United Arab Emirates (UAE) as possible locations for a summit between US President Donald Trump and Russian President Vladimir Putin, two unnamed Russian sources told Reuters.
Russian officials have consistently denied having any direct communication with the US regarding arrangements for a phone call between Trump and Putin, which is expected to take place before any meeting later this year.
There remains some opposition to the idea within Russia, one source told Reuters, clarifying that diplomats and intelligence officers pointed out the strong links between military and security that both Saudi Arabia and UAE have with the US.
Both Trump and Putin have friendly relations with Saudi Arabia and UAE. Saudi Crown Prince Mohammed bin Salman was the first to call Trump after taking office, while Putin visited Saudi Arabia and UAE in 2023.
UAE President Mohammed bin Zayed Al Nahyan has visited Russia several times during the war, and stated during his last visit in 2024 that he is ready to support peace talks.
Both Salman and Al Nahyan maintained a neutral position throughout the Ukraine war, as both refrained from criticizing and sanctioning Russia. Both countries are not members of the International Criminal Court.
Russia dismissed the option of Turkey, a NATO member that hosted the failed peace talks between Russia and Ukraine in March 2022.
Russian analyst Fyodor Lukyanov said Trump and Putin do not have much choice in terms of venues for meeting.
"Almost the entire West is involved on the side of Ukraine. Therefore, all the traditional venues where such things used to take place, like Helsinki, Geneva, and Vienna, are not suitable," Lukyanov told TASS news agency.
Lukyanov highlighted that despite Saudi Arabia and UAE being very close US allies, "as a venue for negotiations, it is probably quite conceivable."
In January, Trump said he would impose new sanctions against Moscow, as well as taxes and tariffs on Russia products if a deal to end the war in Ukraine is not reached soon.
"Let's get this war, which never would have started if I were President, over with! We can do it the easy way, or the hard way - and the easy way is always better," Trump wrote on Truth Social.
Council of Europe Development Bank approves €150 million for housing projects in Ukraine
The Council of Europe Development Bank (CEB) has approved a total of €150 million in funding for two housing projects in Ukraine, the country's finance ministry said on Monday.
Of the total, €50 million will be dedicated to a new project aimed at helping internally displaced persons (IDPs) obtain their own housing, and €100 million will be extra funding for an existing project that allows beneficiaries to receive compensation for housing destroyed during the war.
"The housing sector remains one of the most affected by the full-scale war. The effective implementation of housing projects contributes to the Government's ability to provide essential support to citizens whose homes have been destroyed or damaged due to hostilities, as well as to those forced to flee their homes," Ukraine Deputy Finance Minister Olga Zykova said in a press release.
The new €50 million concessional loan project will provide housing for 1,460 internally displaced Ukrainian families in 2025 under affordable conditions, as per the statement. Through the State Fund for Support of Youth Housing Construction, families can secure loans with a fixed 3% annual interest rate for up to 30 years, requiring a minimum down payment of just 6% of the selected housing cost.
The additional €100 million, under the "HOME: Compensation for Destroyed Housing," project will fund over 2,000 housing certificates, allowing 5,700 Ukrainians to receive compensation for destroyed homes.
In 2024, Ukraine received €100 million from the CEB through the HOME project, enabling recipients of state eVidnovlennia program compensation for war-damaged housing to purchase new homes. More than 5,000 citizens have already secured new housing through this initiative.
Ukraine became the 43rd member state of the CEB in June 2023.
UNDP, Spain launch €4 million project to renovate 8 schools in Ukraine
The United Nations Development Programme (UNDP) in Ukraine, with financial support from the Spanish Agency for International Development Cooperation (AECID), has launched a project to renovate eight schools in Ukraine damaged by the war with a total budget of €4 million.
Restoration efforts will prioritize light to medium repairs for schools with damage levels of 60% or less, incorporating energy-efficient upgrades and ensuring accessibility compliance.
One school will undergo major renovations as a "pilot school," modernized according to the "New School Concept" developed in collaboration with the Ministry of Education and Science of Ukraine, supporting the country's EU accession efforts, the UNDP said in a press release on Monday.
The project, which will include the renovation of eight schools in Volyn, Kyiv, Lviv, and Sumy regions, is expected to be completed by the end of 2026, as per the statement.
"This will enable over 5,000 students and 450 staff members to continue teaching and learning in safe and suitable premises," said Ukraine's Minister of Education and Science Oksen Lisovyi.
According to Ukraine's Ministry of Education and Science, approximately 4,000 educational facilities have been damaged or destroyed since February 2022. The World Bank estimated that 13% of Ukraine's educational infrastructure was war-damaged.
NYT: Ukraine's tech innovation could be key to future warfare security
Ukraine’s history of innovation, dating back to the Soviet era, has fueled its success in the tech industry and is now driving advancements in battlefield technology, according to an op-ed published by the New York Times.
The author argues that NATO allies should strengthen partnerships with Ukraine’s defense sector, leveraging its expertise in drone warfare and rapid military innovation to enhance security against global threats.
Kyiv Independent: Ukraine needs real financial reforms, not just leadership changes
Ukraine’s recent leadership shake-up at the State Financial Monitoring Service is not enough to address deeper issues in the country’s financial system, according to an op-ed published by the Kyiv Independent.
The authors argue that Ukraine must implement structural reforms, including stronger public-private partnerships, clear regulations for virtual assets, and more effective financial investigations, to strengthen financial integrity and build international trust.
Reconstruction funding won't be enough to return Ukraine's economy to pre-war level, KSE says
Investments earmarked for Ukraine's reconstruction will not be enough to return the country's economy to its pre-war level by 2027, the Kyiv School of Economics (KSE) said in its latest macroeconomic handbook release.
As gross fixed capital formation (i.e., investment) over 2025-27 is projected to reach only $100 billion, securing significant additional funding for the recovery must be the key objective for 2025, the KSE said. Damages from the war far exceed $150 billion and reconstruction is expected to cost more than $500 billion, it said.
Both public and private sources must be mobilized to cover the cost of reconstruction and fill in the $400 billion gap. Russian sovereign assets should also be confiscated for this purpose, but full confiscation is unlikely in the near term, according to the KSE.
The greatest damages are in the housing and transportation sectors, but the energy sector was the hardest hit in 2024, with losses rising from $10.6 billion to $16.1 billion in H1 alone. This figure is likely even higher now due to ongoing Russian airstrikes, KSE said.
KSE noted that the war has led to significant losses due to its impact on business activity. As of January 1, 2024, total economic losses amounted to $499.3 billion, according to the World Bank. The KSE, however, now estimates total losses could surpass $1 trillion by the end of 2025.
Total gross fixed capital formation of $100 billion will not enable Ukraine to fully recover economically, and real GDP will in 2027 remain almost 10% below its 2021 level, KSE stated, adding that Ukraine's real GDP is projected to grow at ~4% per year during the war and ~6% per year after the war.
KSE noted that Ukraine's budget outlook appears favorable, with additional foreign financial support from the ERA likely sufficient to cover the country's budget needs for 2025-2027.
Ukraine is projected to receive $75 billion in foreign loans between 2025 and 2027, equivalent to approximately UAH 3.3 trillion, while repayments will total UAH 400 billion. This support will cover a substantial portion of Ukraine's fiscal financing needs, with the cumulative budget deficit for 2025-2027 estimated at UAH 2.9 trillion, according to the KSE.
New Accounting Rule Delay Sought
The European Business Association, which represents European companies in Ukraine, posted that businesses have asked the Ministry of Finance for an extra six months to transition to new accounting documents, which require more details on fiscal receipts and new technical standards for cash register software.
Businesses have run into delays notifying employees and software producers, including foreign partners, carrying out testing, reprogramming cash-handling equipment and more, the EBA said.
How to Deal with Illegal Probes
Avellum, the Ukrainian law firm, promoted an article written by two of its lawyers informing businesses of how to react in case of abusive law enforcement actions such as searches, account seizures and interrogations meant to exert pressure.
The article looks at "the main mechanisms of illegal influence on companies, as well as effective ways of legal protection against reputational, financial and psychological risks."
Mine Action Conference 2025
The Ministry of Economy of Ukraine announced that Japan will co-host this year's Conference on Mine Action in Ukraine, the third such event in three years, following the 2023 conference in Zagreb and last year's conference in Lausanne.
The ministry said Japan has allocated more than $70 million for mine clearance equipment and capacity building in mine removal. It offered few other details of this year's conference, but it's expected to take place in the autumn.
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