Ukraine needs hundreds of billions of euros to rebuild. Before the “Marshall Plan” announced by Chancellor Olaf Scholz, Ukraine is now presenting its own ideas in Lugano.
This Monday, the Ukrainian government is presenting its priorities for the reconstruction of the war-torn country for the first time. Around 40 potential donor countries are represented at the meeting in Lugano, Switzerland, as are many international organizations and financial institutions.
Advice should be given as to who can take on which task. The need is estimated at hundreds of billions of euros. The most important principles for the reconstruction are to be laid down in a “Lugano Declaration”.
The Ukrainian Prime Minister Denys Schmyhal, the President of the European Commission, Ursula von der Leyen and the Federal Development Minister Svenja Schulze (SPD) will take part in the conference. The Ukrainian President Volodymyr Zelenskyj is to be connected live from Kyiv.
Reconstruction must start now
“Ukraine is a huge country, so much has been destroyed. In view of the historical task, it is not too early to start planning and coordinating the reconstruction,” says Markus Berndt, Managing Director of the EIB Global department at the European Investment Bank (EIB), the German Press Agency.
Donors would have to coordinate their help early and transparently. «Ukrainians will ask everyone for everything. If you don’t coordinate well, everyone is promoting the same bridge and nobody is rebuilding the hospital that may be needed more urgently,” said Berndt.
“Rebuilding Ukraine will be an immense task that will take decades and cost hundreds of billions of euros. That’s exactly why we have to talk about reconstruction now,” Schulze told dpa.
Emergency aid must set the course for the future
Schulze said that emergency aid must already lay the foundations for sustainable reconstruction in order to strengthen Ukraine’s course towards the European Union. The goals are a modern administration, effective fight against corruption, sustainable infrastructure and energy security.
Ukraine urgently needs help to secure basic supplies of water, sewage, waste disposal, energy and digital connectivity and to ensure macroeconomic stability, says Berndt. “We need investments, otherwise the economy would collapse completely and then we would lose the most important pillar for reconstruction,” he says. “Of course, a water supply can be destroyed again in war. But if we don’t ensure that the cities can function again and that people can live there, then the long-term costs are significantly higher than if we finance a water supply twice.”
Key problem grain exports: more silos needed
Grain exports must be pushed. “Then the Ukrainian farmer gets his money, the world gets more grain and the Ukrainian state gets foreign currency,” says Josef Schmidhuber, deputy director of the Trade and Markets Department of the UN agricultural organization FAO, the dpa. Around 20 million tons of grain cannot be exported because Russia is blocking the Black Sea ports.
In addition, according to FAO estimates, there will soon be 50 million tons of fresh wheat, corn, barley, oats, rye and other species. There are silos for only about 60 million tons. Exporting by rail is difficult because the Ukrainian and Polish railways have different track widths, and there is a lack of handling capacity on the Danube.
Schmidhuber therefore welcomes plans to build silos on the Polish border. “Then you can fill them with grain from Ukrainian wagons and empty them with Polish wagons,” he says. From there it would be exported to Gdansk, Rostock or Hamburg. “But the construction of the silos would have to start immediately if you still want to store this year’s harvest there, the construction will take a few months.”
To secure the next crop, Ukrainian farmers need loan commitments, agricultural economists say. Because if they cannot sell their existing grain quickly, they will not have enough money for new seed and the next harvest will be even smaller.