Europe’s acceptance of refugees is an important second field of support. 2 Essential state functions have been endangered and must therefore receive external support not only militarily, but also financially. Since the beginning of the so-called special military operation against Ukraine, according to the proclamations of the Kiev government, assets of around US $100 billion have been destroyed in every month of war – an estimated €1.2 trillion since February 2022. In fact, the war began much earlier: ideologically, at the latest with President Putin’s 2007 speech at the Munich Security Conference, which was a declaration of conflict politically, through constant Russian meddling into Ukrainian affairs from the time of the Orange Revolution in 2004-05 to the Euromaidan protests in 2013-14 and militarily, with the annexation of Crimea and the invasion of the Donbas by irregular forces in 2014. Rising from the ruins Ongoing destruction and reconstructionįebrumarked the one-year anniversary of Russia’s invasion of Ukraine – from a naïve Western point of view. Transfers and capital imports must close a current account deficit of about US $200 billion per year. This will require a total of US $8.5 trillion over 15 years, which can, however, be financed to a considerable extent by endogenous, investment-driven economic growth if the institutional framework conditions are designed in a market-economy way, especially the taxation system. The economic goal for Ukraine set in this article is to reach Poland’s present level of prosperity in 15 years, which implies a growth rate of 9% per year.
Key indicators for Germany from 2021 are used as a basis. Based on three approaches, the model is validated for the new German states – namely capital coefficients, actual investment flows and actual public transfers – and applied to Ukraine.
This article uses Aufbau Ost (or reconstruction of the East) of the new German states as a structural model to estimate the possible costs of an Aufbau Ost 2.0 of Ukraine while taking institutional differences into account.
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