Central and Eastern Europe’s Role in Ukraine’s Reconstruction: Shared Opportunities, Benefits, and Challenges

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Summary

Ukraine’s reconstruction will be a historic undertaking requiring global leadership and the involvement of the largest economies of the international community. While it is being largely addressed through the expected involvement of the private sector globally and formal channels such as the Multi-Donor Coordination Platform for Ukraine or the annual Ukraine Recovery Conference, there have been considerable responses at the level of individual countries from Central and Eastern Europe (CEE) as well. In the region particularly, the war has had an economic impact, contributing to an already emerged energy crisis and prompting an economic downturn, due to geographic proximity to Ukraine.

Several CEE countries have developed a comprehensive policy approach to Ukraine’s reconstruction. What is more, Czechia, Estonia, Latvia, Lithuania, and Poland are at the forefront of reconstruction planning and financial contributions, as well as participating in the early stage of reconstruction, with comprehensive national policies that have total or near-total political support. Others—including Bulgaria, Croatia, Romania, Serbia, and Slovenia—have either expressed a strong interest in participating in postwar reconstruction or have started implementing individual projects, regardless of the level of domestic political support for Ukraine. The majority of CEE countries can claim to have a sustainable engagement with Ukraine. Only in the cases of Hungary and Slovakia, whose relations with Kyiv have reached a historic low, is it yet to be seen if or how they will engage with postwar reconstruction.

The actions taken by CEE governments in the past three years strongly suggest not only that the countries of the region are well-positioned to contribute to Ukraine’s reconstruction, but also that some will likely be key players—particularly Poland and Romania, which are positioning themselves as key logistics hubs for this goal. The region’s prospects for playing a key role are also supported by policies introduced in countries such as Czechia, Poland, and the Baltic states that provide various incentives for companies aiming to participate in reconstruction. The subnational and sector-specific approach employed by Czechia and the Baltic states also underscores long-term cooperation and commitment. Other smaller CEE economies are also expressing strong interest. They should formulate a comprehensive approach to support Ukraine and their own business community in one effort.

Although the financing of reconstruction remains a key challenge, including regarding the possible use of frozen Russian assets, CEE countries are looking for additional ways and indirect contributions, as well as for policies ensuring that the issue will stay on not only the global but also the regional agenda. Regional cooperation and Ukraine’s EU integration could also prove essential to connect CEE businesses with Ukrainian partners, particularly through the Three Seas Initiative, for which Ukraine’s reconstruction has the potential to become a flagship objective.

Dominik Istrate is a ReThink.CEE fellow 2024 of the German Marshall Fund of the United States.