Ukraine Business News

What further defensive support have Ukraine's partners promised? In January next year, the UK and its partners will supply Ukraine with thousands of combat drones as part of the Maritime and Drone Capability Coalitions. Britain will also continue training Ukrainian military personnel; 51,000 defenders have already been trained. Secretary of State for Defense John Healey stated that Britain may also train Ukrainian military personnel in Ukraine. In addition, the plans for next year include the development of Ukraine's defense sector, as well as in Britain and throughout Europe. Lithuania is ready to invest in the production of the Palanytsia drone missile, which is part of the Ukrainian long-range weapons program. This year Lithuania will provide €10M through the Danish model, which involves investing directly in Ukrainian weapons production. Ukrainian representatives from the Ministry of Defense met with their counterparts from the Netherlands discussed priority areas of assistance for 2025, including additional spare parts for F-16 aircraft and air defense/missile defense systems, tanks, artillery, and demining equipment. Germany also transferred an additional IRIS-T air defense system to Ukraine. https://lnkd.in/d2sagget

Ukraine's GDP growth slowed to 0.7% at the end of the year due to attacks on energy infrastructure.  The real GDP growth rate slowed from 1.1% year-on-year in October to 0.7% in November. The reason is Russian shelling of energy and industrial infrastructure, the Institute for Economic Research (IER) stated. In particular, these most recent massive attacks led to the return of significant planned and emergency power outages, which affected both industrial enterprises and the civilian population. The launch of decentralized power generation capacities by enterprises and the possibility to import electricity provided support for business stability during this time. Real gross value added (GVA) in the processing industry increased by 4.7% in November (5.2% in October). In the extractive sector, GVA remained at the November 2023 level due to growth in oil and gas production which compensated for the decline in coal and iron ore production. Real GVA in agriculture fell by 7% (down 8% in October). Real GVA in trade grew by 5.6% compared to 6.2% in October, driven by rising wage income. GVA in the transport sector grew by 8%. https://lnkd.in/d6wRcUez

The EC is again considering the full confiscation of frozen Russian assets. The EU should consider taking bolder measures, such as confiscating the Russian Central Bank's foreign assets as compensation for Ukraine, said Valdis Dombrovskis, the European Commissioner for Economic and Monetary Affairs. The discussions have gained new momentum as the bloc faces the risk of the US cutting or ending aid to Ukraine after Donald Trump’s inauguration. The EU’s diplomatic service is conducting new assessments of the financial and economic risks of confiscating Russian assets and transferring them to Ukraine. Several member states, including Germany, Belgium, Luxembourg, and the ECB, remain concerned that the confiscation could violate the principle of state immunity under international law and affect the euro as a reserve currency and the eurozone's financial stability. Dombrovskis said any option must be "legally sound" to withstand potential litigation, while saying that the risks to financial stability from confiscation were exaggerated because none of the risks associated with the asset freeze have materialized. https://lnkd.in/diT_CrYz

Under what conditions are European countries prepared to send peacekeeping troops to Ukraine? European countries would consider sending military personnel to Ukraine in the event of a ceasefire, but they will not unite peacekeeping forces under the NATO flag, as a NATO mission requires unanimous consent of all Alliance members and may provoke Russia. The Kremlin previously stated that a conflict with the military bloc is inevitable if its contingent appears on Ukrainian territory. Negotiations on sending troops are at an early stage because there are no prospects for a ceasefire. Some European leaders are considering the possible deployment of peacekeepers as one of the options for providing security guarantees to Ukraine until it becomes a NATO member. Camille Grand, a member of the European Council on Foreign Relations and former NATO Assistant Secretary General, explained: "An agreement on peacekeepers in Ukraine after the ceasefire will make it clear to the Russians that they shouldn’t restart the conflict and to the Americans that the Europeans have skin in this game and that we mean it." https://lnkd.in/dqFTnrhB

Ukraine will cease the transit of Russian gas on January 1, but pro-Russian EU leaders have not given up hope for its continuation. Beginning January 1, 2025, the Ukrainian GTS will be able to transport gas of Russian origin only at the request of the European Commission, Prime Minister Denys Shmyhal said. At the same time, according to the Association Agreement with the EU and the Energy Charter Treaty, Ukraine is obliged to ensure the transit of Russian oil to Europe at the EC's request. "Therefore, technically, transit requested by the European side continues. However, we are working to impose 100% sanctions on Russian energy," Shmyhal added. Meanwhile, Hungary is negotiating the continuation of Russian gas supplies through Ukraine. Hungarian Prime Minister Viktor Orban announced a cunning approach: transporting gas through Ukraine that already belongs to the buyers before it reaches Ukrainian territory. Hungary has also received assurances from Bulgaria that the transit of Russian gas through the Balkan Stream, an offshoot of TurkStream, will not be restricted. Slovak Prime Minister Robert Fico arrived in Moscow for gas talks with Putin. https://lnkd.in/dBswQF4j

The US will provide Ukraine with a $1.2B military aid package; Trump plans to continue arms deliveries. The Biden administration will announce its final Ukraine Security Assistance Initiative (USAI) package in the coming days, using the remaining funds that have been reserved to purchase new weapons for Kyiv. The package, worth about $1.2B, will likely include interceptors for air defense and artillery ammunition. Under the USAI program, military equipment is purchased from industry or partners, not from American stocks. Pentagon spokesman Patrick Ryder said that Washington aims to use as much as possible of the allocated $6.7B by the end of Biden's term and quickly deliver weapons to the Ukrainian Armed Forces. Although, as FT sources reported, US President-elect Donald Trump plans to maintain supplies of American weapons to Ukraine after his inauguration. Trump still believes that Ukraine should never become a member of NATO and wants an immediate end to the conflict, but he believes that supplying weapons to Kyiv after a ceasefire will ensure "peace through strength." https://lnkd.in/dfdBBbFX

Ukraine is facing a fundamental decision: continue fighting or negotiate? Ukrainians are currently pondering a crucial decision – to continue the fight or negotiate for peace, and the Biden administration is committed to providing Ukraine with the strongest possible position, said US Secretary of State Anthony Blinken. This means further work is needed to strengthen Ukraine's position on the battlefield and to continue exerting maximum pressure on Russia. He stressed that the ceasefire must occur on fair terms and with a long-term perspective. It is essential not to give Russia a break from active combat to rearm and attack again in a year, two years, or five years. "President Trump will want to make a good deal," the head of the State Department noted. However, according to Blinken, the fundamental question is whether Russia is ready for peace. After all, the Putin-led regime wants to rid itself of the yoke of sanctions and export restrictions, but it will not abandon its imperial ambitions. Meanwhile, the German chancellor and the US president-elect agreed that "the war in Ukraine has been going on for too long," so it is crucial to embark on the path to a fair and sustainable peace as soon as possible. https://lnkd.in/d-4Uvsck

How is the policy regarding Ukrainian refugees changing in European countries after almost three years of war? The Chamber of Deputies of the Czech Parliament has finally approved the Lex Ukrajina VII law that will extend temporary protection for Ukrainian refugees. The current protection expires on March 31. With the law's passage, it will be extended for another year. Also, refugees who have stable jobs and do not receive state assistance can apply for a special long-term residence permit. The law will come into force in early February. In Lithuania, due to registrations by persons with inactive status being discontinued, the number of Ukrainian refugees decreased by 33,455 people (41%) during the month to 47,610 as of October 31 2024. This year, the Lithuanian Migration Service has tightened control over the stay of foreigners in the country. As of the end of October, 4.2 million Ukrainians in the EU had temporary protection status. The largest number of refugees was in Germany (1.14 million), Poland (983,880), and the Czech Republic (379,370). https://lnkd.in/dq52Rr_H

Ukraine and Poland plan to create an Eastern European gas hub that will replace the transit of Russian gas for Europe. According to Deputy Energy Minister Mykola Kolisnyk, the completion of Russian gas transit through Ukraine will begin competition for new routes and resources, including LNG, which is becoming an increasingly large percentage of the EU's overall consumption. Ukrainian underground gas storage facilities and Polish LNG gas terminals can create a new business model that will replace gas transit from Russia. "Integration of gas markets based on existing infrastructure and increasing available interstate capacity give impetus to the development of trade and an opportunity to replace Russian gas," Kolisnyk emphasized. The Ministry of Energy added that the Ukrainian side has already officially addressed its partners with a proposal to sign documents to begin the development of interstate "entry-exit" points in the gas transportation system between Ukraine and Poland and to increase the installed capacity. This will help Ukraine and Poland store as much gas as is needed for all of Eastern Europe. https://lnkd.in/dU2xCwc6

Von der Leyen in the European Parliament: Supporting Ukraine is a strategic goal for the EU. Continuing and strengthening support for Ukraine while Putin makes every effort to break Ukrainian resistance is a strategic imperative for the EU, said EC President Ursula von der Leyen in the European Parliament. She noted that after three years of full-scale war, Russia has not been able to break Ukrainian resistance. Putin is now trying to do this with the use of new weapons, with new troops from North Korea, and with new attacks on energy infrastructure. Von der Leyen stressed that in 2025 Ukraine's funding gap is estimated at $42B. The EU, together with its partners, will help close this gap. Next year, the bloc will allocate €13B for Ukraine as part of the Ukraine Fund. And in January, it will start transferring its share of the G7 loan, secured by Russian assets, which will amount to more than €18B. The heads of the UK and Estonian governments have stated the need to apply further pressure on Putin through military and economic support for Ukraine, as well as sanctions. https://lnkd.in/dybm9-sE