REUTERS
Many of the approximately 600 German companies operating in Ukraine are now actively carrying out audits to determine the economic feasibility of continuing to work in the country, a German economist has warned.
The investment crisis caused by a sharp cut in gross inflows of capital into the country is the greatest threat to the economy of Ukraine said Executive Director of the Committee on Eastern European Economic Relations and Chairman of the German-Ukrainian Forum Rainer Lindner at a recent roundtable discussion in Kyiv.
"The biggest danger is an investment crisis, and not even the hryvnia crisis or energy price crisis. In this situation, no local or foreign investors have a desire to invest in this country," Linder said.
"In 2014, exports of German companies in Ukraine decreased by 35%, which is too much... We have invested about $8 billion in this country since independence, and in recent years this process has stagnated," Linder said.
According to Linder, Ukraine, nevertheless, remains a strategic partner of German businesses and the reform policy announced by the government and backed up by the international financial organizations could significantly improve the investment climate in the coming years.
The Committee on Eastern European Economic Relations has initiated several projects in Ukraine, including a scholarship program for Ukrainian students and internship opportunities in German companies, energy efficiency projects in Kyiv and Lviv regions, as well as preparation of the platform for introducing energy-saving technologies with the support of leading expert organizations.
In addition, the committee organized a meeting of representatives of the Ukrainian and Russian businesses in Slovakia, which resulted in the approval of a declaration on further cooperation and understanding, despite the challenging political environment.
Linder has also presented his fundamental historical research, analyzing the process of Ukraine’s industrialization in the second half of the 19th century.
"The main thesis is that in that historical period Ukraine hardly lagged behind its European neighbors in the process of industrialization ... Subsequent historical events slowed down the positive trends, but it demonstrates that in your country there is a great prospect for business" he said.
As UNIAN reported earlier, on January 7, a joint statement was signed in Berlin between the governments of Ukraine and Germany on granting Ukraine loan guarantees of EUR 500 million. According to Ukrianian Prime Minister Arseniy Yatseniuk, the loan will be given for 20 years at a very low interest rate and will aim at implementing projects to rebuild infrastructure destroyed by the war in the east of Ukraine.
Later, in February, Deputy Prime Minister Hennadiy Zubkov noted that infrastructure projects would cover activities on resumption of electricity, heat, and water supplies and of drainage systems, as well as the reconstruction of schools and hospitals. The selection of the projects will be performed by a joint Ukrainian-German working group.