Excellencies,
Ladies and Gentlemen,
Dear friends of Ukraine,
As we gather here today, there is a genocidal war going on in Ukraine for the year already. Ukrainians are fighting against Russian aggression because this is their existential fight. For them, there is no Plan B. There is no Plan B for the entire democratic world either.
One of my favourite historians Timothy Snyder has explained what is at stake – and I quote: “if we stopped supporting Ukraine, then everything gets worse all of a sudden, and no one will be talking about 'fatigue' because we will all be talking about disaster." End of quote.
A week ago here in Tallinn, Professor Snyder repeated it again in clear words – and I quote: "The world order depends on what is happening in Ukraine."
We in Estonia understood it already some time ago. It is obvious that aggressors and dictators cannot be appeased, Russia must be opposed and stopped in Ukraine. If Putin succeeds there, he will not stop. This is why we have been with Ukraine so strongly from the first day of the war, actually even before that. Ukraine has to win the war – and Russia must understand that they lost. This is our plan A, B and C.
Words and sanctions are important, but not enough. Ukraine needs weapons, ammunition, training. It also needs financial and economic support. And it needs it now. It is our role and duty to not only continue but increase our support to Ukraine, on all fronts.
Russia is deliberately targeting Ukraine’s economy and perspectives for Ukraine’s future. Direct damage in Ukraine has now reached nearly 140 billion euros. Housing, transport, commerce and energy are the most affected sectors. Ukraine has lost over 80 per cent of energy infrastructure and 10 per cent of housing. Every seventh school in Ukraine is damaged. To recover infrastructure and economic losses, Ukraine will need over 450 billion euros over the next decade.
This also serves as a reminder why reconstruction is necessary already now. Ukraine is fighting bravely – not only its soldiers on the frontline but also Ukrainians running businesses, going to school, continuing to show the Russian terrorist regime that they will not succeed.
Estonia has committed to a total of 1.2 billion euros of assistance to Ukraine from the start of the war until 2027. 316 million euros of this is for civilian assistance while 900 million euros is for military assistance.
We have already started to carry out concrete reconstruction projects. In our focus region Zhytomyr, Estonia has built a kindergarten and contributed to rebuilding a bridge. We have partnered with the Olena Zelenska Foundation to build foster family homes for orphans. The first houses will be ready next week.
What Estonia has done is not only an investment in brick and mortar – we have also been focused on practical cooperation with our Ukrainian partners. Estonian reconstruction projects are locally visible and much appreciated. They deliver hope. It is a model that we are eager to share with others.
It also shows the readiness of the Estonian state to invest into Ukraine. We believe it is money well spent.
Ladies and Gentlemen,
From Estonia’s perspective, the best economic policy is strong security and defence policy. In the same way, we should see ensuring a strong economy as the best defence for Ukraine.
Building up Ukraine’s vibrant, strong and healthy economy sends a clear message to Russia – that Russia’s model of imperialist expansion, built on kleptocracy and subject to international sanctions and isolation, is failing. There is an alternative out there – as demonstrated by Ukraine.
Despite fighting a full-scale war, Ukraine has shown its determination and resilience also in holding up its economy in exceptionally difficult circumstances. Last year, Ukraine' s GDP rebounded by about 5% after the nearly 30% decline in 2022. Ukraine's banking system is profitable and creditworthiness is high despite the war.
Obviously, Ukraine is not capable of bearing the burden alone. Our message has been clear: it will ultimately need to be Russia who pays for the damages they caused. This is why we are working to use Russia’s frozen assets for Ukraine – Estonia’s parliament recently set the example by being the first in Europe to pass a law allowing the use of Russia’s frozen assets for Ukraine. And the EU recently approved the use of windfall profits from frozen assets for Ukraine. This is a first step, of course more needs to be done.
While we are continuing to work on these solutions, we also need to continue to contribute to Ukraine’s fiscal and macroeconomic sustainability. The international community, including Estonia, has stepped in to provide much needed support. The EU has put together the Ukraine Facility – a 50-billion-euro package of support measures. This includes a plan to attract investments for Ukraine's reconstruction and recovery, including guarantees, grants and loans. It also provides the opportunity to engage Ukraine under the EU’s umbrella for the private sector and development banks.
As Ukraine’s needs for recovery and reconstruction are enormous, private sector contribution is crucial. Ukraine’s economy needs private investments, but there is also a strong business case for international private actors to look at the Ukrainian market and its 40 million people. Ukraine has the potential to become one of the most dynamic and fastest growing economies in Europe. Ukraine is still strong and resilient.
We are already seeing positive examples. In recent years, Ukraine has evolved into a global e-governance powerhouse. It showcases digital solutions that not even many EU countries have yet, such as digital IDs or driver’s licenses. For example, almost 20 million Ukrainians simply use their mobile to access key documents and government services. War-time needs have created conditions for Ukraine to significantly accelerate the digitalisation process. This, in turn, creates business opportunities for a modern digital economy. Estonia has been fortunate enough to support Ukraine’s digital success story already for more than a decade, and our cooperation continues.
Business cannot exist in a vacuum – it needs a supportive environment. It needs clear rules, and these rules need to be enforceable – and also enforced. It needs trust. Ukraine has made significant progress on all those counts over the last years – despite the terrible costs of Russian aggression. Reforming the judicial system, strengthening the anti-corruption institutions, ensuring the transparency of public tenders and many other achievements have been remarkable. For the success of their reforms, they have achieved EU candidate country status. We are working to ensure that accession negotiations will start soon.
At the same time, a lot of work remains to be done. EU accession gives the perfect framework for working on reforms – Estonia knows this well from our own experience. Ukraine is working tirelessly to take over the whole rulebook of the European Union. Here Estonia has been assisting Ukraine and we will continue to do that.
Being an EU candidate country means that you are put on the scale with existing member states – being a good performer in your own region is no longer enough. Ukraine should aim to become better than the member states. Estonia definitely had this ambition. For example, we first entered the Transparency International’s Corruption Perception Index in 1998 at 26th place – right behind Japan and ahead of some existing member states. We are now sharing 12th place with Canada.
Ukraine has its own successes to share. I already mentioned its impressive progress in e-governance. Ukraine ranks high regarding tax competitiveness. Still, there is huge potential to do even better. The window of opportunity is now and we must help Ukraine to use it. And I am confident that after beating back the aggressor, Ukraine’s reform results will keep impressing us all.
I have been most impressed by Ukraine’s resilience and the courage and resourcefulness of its people. Ukrainians want to be free, to build their own country, to be a prosperous European nation. This determination will take Ukraine wherever they decide to go – to EU and NATO membership, peace and prosperity.
At the same time, for this to happen, we as members of the EU and NATO have to do our own part. We are helping Ukraine to fight back the aggressor. Looking at our own region, Nordic-Baltic cooperation for Ukraine is crucial: we are very like-minded and also stronger together. With the history and knowledge of the three Baltic countries and the strong multilevel support of other Nordic countries, we have positioned ourselves as Ukraine’s strongest allies. It is time to show that support also continues on the business level.
Ladies and Gentlemen,
The time to invest in Ukraine is now. Yes, investing in Ukraine is risky but not doing it is even riskier. The EU market will benefit significantly from what Ukraine has to offer – from a strong IT landscape to agricultural products to high-tech defence solutions to a highly educated workforce. This is an attractive prospect for international investors.
A strong economy supports Ukraine’s war efforts and paves the way to victory over the aggressor. It also paves the way to security and stability in Europe – something that is also in the interest of the private sector.
In the end, investing in Ukraine means helping Ukraine to win the war.
Thank you – and Slava Ukraini!
