Europe struggles to rebuild Ukraine as war rages on

Featured Sponsor

Store	Link	Sample Product
UK Artful Impressions	Premiere Etsy Store

Good morning. A scoop to start: EU officials have a discussion by subtracting the proceeds of the Russian assets held in Euroclearthe mainland’s securities depository, and delivering that cash to Ukraine.

Today, I take stock of the enormous task of financing Ukraine today and its future reconstruction, and explain why it’s critical time for gig workers who want better job security.

Sisyphus task

Can you rebuild a country while it’s still at war? This is the question that governments and multilateral development banks are struggling with for Ukraine.

Context: International financial institutions estimate that more than $400 billion will be needed to finance the reconstruction of Ukraine, nearly three times the amount of the US Marshall Plan — in today’s dollars — used to rebuild post-WWII Europe world.

Officials from across Europe will meet today in Brussels for a workshop dedicated to this topicpart of a series of events and summits attempting to come to grips with the scale of the task, and form the necessary coalition of public and private finance.

The war is still going on, with no sign of ending. But Western governments know they can’t wait for the first day of peace to map out funding needs and get the money moving. That means paying to build things that get blown up soon after, and a lot of rough estimates.

“You don’t know how long the war will last, if what you invest in is destroyed the next week. So it’s very challenging,” said Odile Renaud-Basso, president of the European Bank for Reconstruction and Development. “We will continue to support Ukraine in the war and at the same time we know the reconstruction needs will be enormous.”

The EBRD is the largest institutional investor in Ukraine and plans to invest 3 billion euros in 2022-2023. The lender, whose shareholders are 71 countries, the EU and the European Investment Bank, aims to agree by the end of this year a capital increase of 3-5 billion euros (from the current 30 billion ). With the expected leverage, this could provide around 12-20 billion euros of additional funding to Kiev.

All this comes in addition to Ukraine’s day-to-day needs (set at around €3 billion a month) of which the EU is funding half, and critical issues such as money for military supplies, which comes from Western finance ministries themselves.

More clarity could emerge next month in London at next iteration of the Ukraine recovery conference.

“What we need to discuss now, to fine-tune, is how much, what level of investment will be required for reconstruction. And it’s a stimulating discussion because nobody really knows,” said Renaud-Basso.

Chart of the Day: A trickle

Europe relies on hydropower for about 15% of its energy, but how weather patterns become less predictable, that may change.

Gag economy

Flagship EU legislation setting out workers’ rights for companies like Uber is likely to be suspended until after next year’s European elections, write Ian Johnston AND Javier Espinoza.

Context: The European gig economy is booming. The number of people working in the sector is expected to rise from 27.8 million last year to 43 million in 2025, far above the 29 million employed in the manufacturing sector. But member states cannot agree on rules to harmonize conditions for workers.

A meeting yesterday failed once again to break a stalemate.

Countries like the Netherlands, Belgium and Spain want workers to be more easily classified as employees and have access to social security and other benefits. Others, including France, fear the rules could impact existing union agreements with platforms or hamper job creation.

Germany’s abstention hampered discussions, two negotiators said. Regulators have also come under heavy pressure from platform companies.

The negotiators will meet again in the coming weeks to find a compromise before a ministerial meeting on June 12. According to three people, if countries do not reach an agreement by June, they will struggle to start negotiations with parliament before the end of the mandate.

This would jeopardize other measures that member states give back, such as the need for human oversight of decisions made by platform algorithms.

“If this is delayed again, [the law] it might not happen. The only ones who will be worse off would be the workers,” said a diplomat.

What to watch today

1. Meeting of EU trade ministers to discuss relations with the United States and China.

2. Russian President Vladimir Putin hosts the leaders of Azerbaijan and Armenia in Moscow.

Now read these

Help us identify the main start-up hubs in Europe

The FT, with its partners Statista and Sifted, has launched a research project to identify the main start-up hubs in Europe.

Are you part of a startup incubator or accelerator program? We want to hear from you. Click here for our online registration form. Or, if you are an investor, consultant, venture capitalist or business angel, Click here.

With your answers, we will publish a ranking next February.