Ukraine’s European integration requires reforms and business support – Metinvest

Ukraine’s accession to the European Union opens up significant opportunities for business, but the government must take into account the realities of the post-war economy. This was stated by Oleksandr Vodoviz, Head of the Office of the CEO of Metinvest Group, at the NV conference “Dialogues on the Future”.

According to Vodoviz, successful European integration is possible only if reforms are implemented and foreign financing is attracted.

“Our economy has suffered from the war. We definitely need to bargain for some preferences. We definitely need to implement reforms. And in return, we need to ask for funds for them, as all the countries that joined the European Union did,” he said.

In addition to political reforms and the end of the war, stable institutional development, transparency of the judicial system and investment protection are important factors for attracting investment. Currently, Metinvest is forced to operate in survival mode, having reduced its investments from $1 billion to $300 million a year, but it is ready to support the European integration process.

The head of the Metinvest CEO’s office paid special attention to the problem of staff shortages. According to him, the return of Ukrainians from abroad is possible only if social infrastructure is restored.

“People will come back if children can go to a normal school, if there is a park in the city, if it is safe, if there is normal housing. We will definitely do these things,” he emphasized.

Another challenge is competition with European countries for labor.

“The Europeans will not let our people go so easily and will fight for them. Because on the one hand, they have migrants living on subsidies, and on the other hand, they have Ukrainians who can work 24/7. And we will compete for millions of our people to bring them back. This will be a huge challenge that awaits us,” Vodoviz added.

The tax hike, which was the government’s response to the budget deficit, is also criticized by business.

“I understand that 51% of our budget is financed by donors, and we are very dependent on them. But in no other country in the world has a tax increase resulted in budget revenues. We will only close the hole for a few months. And then white business will pay taxes, while other companies will go into the shadows or close down. This is not the way out, so we need to pay attention to our tax legislation. No one has ever attracted investment to the country by raising taxes. Even in times of war,” he summarized.

Vodoviz believes that European integration should become a platform for attracting investments and implementing reforms that will ensure the competitiveness of the Ukrainian economy in the EU.

As GMK Center reported earlier, the share of capital investments in iron and steel sector of Ukraine in the total industrial investments amounted to almost 10% in 2023, and their volume increased by 7.2% y/y – to UAH 16.6 billion.

This year, Metinvest plans to invest $320 million in capital and about $350 million in operating investments in equipment and work sites. At the same time, the group expects a large-scale green transformation of its assets worth about $9 billion within 5-10 years after the end of the war.