As the fighting continues in Ukraine, kyiv’s allies, international institutions and the private sector are meeting from Monday July 4 in Lugano, Switzerland, to talk about reconstruction. A kind of Marshall plan which will not be easy to implement.
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The original idea of the Lugano Conference is to lay the foundation stone for the reconstruction of Ukraine. This involves determining priorities, establishing a method and principles for channeling future international financial assistance. Ukrainian President Volodymyr Zelensky will not be present but will intervene from Kyiv by video conference to discuss his vision of a resumption of economic activity that he wishes “smart.” He could also have added “transparent”. You should know that Ukraine is one of the most corrupt countries in the world. It points to 122nd place out of 180 in the ranking of the NGO Transparency International. Paying a bribe to an official in Ukraine is common practice.
However, this is the main concern of donor countries who fear that their financial aid will be lost in the labyrinth of corruption and be diverted from its objectives. A major effort of fiscal and administrative reforms will therefore be required of kyiv, especially since Ukraine wishes to integrate the European Union. In short, no question of signing blank checks.
At this stage, aid to Ukraine for its reconstruction is not yet precisely quantified. It’s still premature. Firstly because the fighting continues and it will be necessary to take the time to assess the damage and therefore the financial needs.
Even if we already know that the bill will be salty! We are talking in the hundreds of billions of euros. The European Commission has estimated the cost of rebuilding physical infrastructure alone at more than 100 billion euros. All major international institutions will be involved, from the IMF to the World Bank. Europe will undoubtedly be one of the main contributors, in the form of loans and grants. The 27 plan to set up a financial instrument backed by the European budget specifically dedicated to the reconstruction of Ukraine. The EU has already offered nine billion euros in emergency aid to enable the Ukrainian state to continue to function while maintaining the war effort. And then there is a track that Ukrainian President Volodymir Zelensky wants to put forward, which would be to make Moscow pay, in particular by drawing on Russian funds frozen abroad.