This is a curated list of the most important economic news in Ukraine for the past week.
This week has been relatively calm until today, where Germany and the United States of America reached an agreement on Nordstream 2. The agreement is directly against the interests of the Ukrainian government who has been trying to stop Nordstream 2 – a gas pipeline running from Russia to Germany through Danish waters – since the beginning.
The agreement between Germany and the US on Nordstream 2 is the last barrier for the pipeline project, as the US remained the only entity willing to stop it – at a point in time at least – and with the power to actually shut down the process.
Nordstream 2 is feared to make Russia more prone to attack Ukraine, which is why today’s agreement was also accompanied by a statement from the German government reaffirming their support for Ukraine:
“The United States and Germany are steadfast in their support for Ukraine’s sovereignty, territorial integrity, independence, and chosen European path. We recommit ourselves today to push back against Russian aggression and malign activities in Ukraine and beyond. The United States pledges to support Germany’s and France’s efforts to bring peace to eastern Ukraine via the Normandy Format,” wrote the Federal Foreign Office of Germany.
The statement has not really served to douse the flames, as you can read in the article here.
Ukraine needs more investment
Ukraine needs to invest billions in the steel industry, if they are to live up to the European Union standards that are on the way. According to one source, Ukraine will need to invest around 25 billion dollars to meet the new standards not only expected to be imposed by the EU but also by the U.S.
Some confusion remains though. While companies are trying to adapt to the new standards, the government is saying that the new standards will not affect Ukraine. “In fact, as a result of the negotiations (with the EU), we agreed that such a decision would not provide for trade restrictions, would not violate the Association Agreement, and would not produce an immediate impact on the export of Ukrainian products,” the Deputy Prime Minister said, referring to Ukraine’s free trade with the EU.
Arsen Avakov replaced
The former Interior Minister, Arsen Avakov, resigned last week. He has survived in politics for a long time, but now new blood is running to the ministry. Member of parliament Denys Monastyrsky from the President’s party Servant of the People has been appointed as the new interior minister.
“I will do my best to fight those who use their authority to enrich themselves and those who violate human rights… I guarantee that the patrol police will keep punishing judges, prosecutors, and members of parliament for misdemeanors,” he said.
Flooding in Kyiv
Kyiv was hit by floods last week. Though nothing close to the chaos caused by the storms in Germany and Belgium, the floods in Kyiv did bring down enough water to cause traffic problems and even flood and close metro stations.
Guaranteed Buyer sued for 66 million USD
Several solar and wind energy producers in Ukraine have taken legal actions against the country’s energy consulting company named Guaranteed Buyer for more than 66 million dollars. A total of 130 legal actions has been taken against the company.
It is the latest step in a crisis that has been going on for years. The problem started last year when the Ukrainian government, through the company Guaranteed Buyer, halted payments of the so-called green tariffs to the renewable energy producers in Ukraine, arguing that the tariffs were too high and needed to be reduced. It led to lengthy negotiations and a new deal, which reduced the green tariffs, and the Ukrainian government promising to pay its outstanding debt to the companies, but the green tariffs have still not been paid in full.
Time to turn the tide
Ukraine’s population has shrunk by 28 percent since the collapse of the Soviet Union, where millions of Ukrainians have left the country to pursue a better life abroad. Some sources say that up to 100,000 Ukrainians are leaving every month – some temporarily and some for more extended periods, and many send money back home to their family.