The First Deputy Prime Minister – Minister of Economy of Ukraine Yuliia Svyrydenko met with members of the Federation of Employers of Ukraine (FEU) to discuss the current economic challenges and opportunities for post-war reconstruction. During the working meeting, the participants discussed deregulation, grant funding, lending to enterprises, VAT refunds, overstatement of customs value of goods, restrictions on currency transfer abroad, and other concerns of the business community.

“We expect that this year Ukraine will be able to start a growth trend. We now have a window of opportunity to develop strategies for rebuilding the country in the post-war period. That is why we are now working on expanding business support programmes. The deregulation that we have launched should become an impetus for business development. We want to listen to entrepreneurs to hear what regulatory barriers should be removed in the near future and what other issues the Government should address so that business could recover, develop and create new jobs,” said Yuliia Svyrydenko.

The discussion revealed that entrepreneurs were most concerned about lending. Under the existing rules, there are many conditions for obtaining soft loans that entrepreneurs cannot fulfil for objective reasons due to the war. Business owners complain that it is often easier for banks to buy NBU certificates of deposit than to lend to Ukrainian businesses, given the war risks.

Businesses also raised the issue of changing currency regulation. For some projects with long technological cycles, the 180-day timeframe for returning foreign currency earnings is too short.

“We will once again try to develop compliance criteria that would enable businesses to use part of their foreign currency earnings for their own needs and agree them with the NBU,” assured Yuliia Svyrydenko.

For their part, the entrepreneurs raised the issue of expanding funding under grant programmes for processing activities. They would help to produce goods with a higher share of added value in Ukraine, which in turn would create new jobs and encourage Ukrainians to return home.

“We are currently negotiating with the World Bank to attract their funding for grants to Ukrainian processing companies and expand their resources. We may also be able to develop concessional lending instruments for the processing industry together with the European Investment Bank. We will also hold talks with other financial donors to involve them in such programmes," said Yuliia Svyrydenko.

According to the First Deputy Prime Minister, the state can provide the greatest support to business through public procurement for priority reconstruction projects. For example, demining machines will be needed in the near future, so manufacturers need to start developing appropriate models.

In the de-occupied territories, in particular in Kherson region, demining is underway, and agricultural companies will soon be able to start sowing. However, many companies had their equipment destroyed and warehouses with finished products plundered by russian troops. It is important that they obtain bank loans to resume production. The Ministry of Economy of Ukraine is currently developing mechanisms for concessional lending to such companies.

“I am grateful to business community for continuing to work and ensure budget revenues. Today, international donors cover half of public spending. But we understand that without the money from Ukrainian businesses, we would not have an army, because aid money cannot be spent on military needs. Over the past year, together we have overcome several crises that we would not have been able to overcome alone. Thank you very much for supporting the state, and we, in turn, will strive to support you and do our best to ensure that the Ukrainian economy starts growing in the near future,” summed up Yuliia Svyrydenko.

In response, the business representatives expressed their belief in Ukraine’s victory in the war against russia and their readiness to invest in the restoration and reconstruction of their enterprises.

For reference

The Federation of Employers of Ukraine (FEU) represents the interests of 8,500 companies that together generate 70% of Ukraine’s GDP and employ about 5 million people.

Today, the FEU unites about 140 sectoral and territorial employers’ organisations representing the most important sectors of Ukraine’s economy, including: machine building, automotive industry, metallurgy, aerospace and defence, agriculture, chemical production, IT, media, fuel and energy, medical and microbiological industries, construction, transport and infrastructure, retail and logistics, consumer goods and food, tourism, utilities, and services.