Author: Maria Repko, Deputy director of CES, member of RRR4U consotrium

Russia’s war in Ukraine has cemented Ukrainian society: keeping its economy afloat is part of its defence strategy. It has forged its own identity: the right to land ownership is anchored in people’s consciences, foreigners built the steel industry in Donbass before being expropriated by the Soviets. Under their power, Ukraine finds itself exporting capital to the regions promoted by the central government.

The end of the USSR led to a recession until the election of Viktor Youchenko at the end of 2004, who then turned to the EU, encouraging foreign banks to invest massively there. The resulting debt weakened the country during the financial crisis of 2008, favouring the election of the pro-Russian Viktor Yanukovych.

He leaves power because he cancels the agreement with the EU and the disastrous state of the economy. Russia then seizes Crimea and foments the seditions of Donbass and Lugansk.

At the beginning of 2022, Ukraine – thanks to the support of the IMF and the agreement signed with the EU – achieves economic successes frowned upon by Moscow, which invades the country.

This study attempts to understand the current impacts of the war on Ukraine’s economy and the means implemented – with the help of foreign aid – by the authorities to finance the country’s budget, most of which is now devoted to its defense.

Classification JEL: F50, F51, F59, F65.

You can read the article at the following link.