Ukraine’s reconstruction in the context of EU accession

Abstract

This paper outlines the impact of the war on Ukraine’s economy, sets out the main challenges for reconstruction and EU integration, and provides a set of policy recommendations to "build back better" within the EU accession process. The economic and demographic shock caused by the war has been severe. However, we find that Ukraine can feasibly follow the EU-CEE integration path once the war ends, and that it will bring a great deal to the EU. Ukraine will not create an unmanageable extra strain on the EU budget, but the integration of its competitive agricultural sector must be carefully managed. Policy priorities for Ukraine and the EU include measures to mitigate the demographic shock, rebuild infrastructure in a way that integrates Ukraine more tightly into the EU economy, support the regions most impacted by the war, and use trade and FDI policies to maximize the benefits of EU integration.