Business met with the President of Ukraine

10/ 02/ 2022

Yesterday, February 9, the European Business Association met with Volodymyr Zelensky, the President of Ukraine, and Rostyslav Shurma, the Deputy Head of the Office of the President of Ukraine. The discussion was focused on the economy and security issues so that businesses can be informed of what is happening on Ukraines borders, what is going on inside the country, and what are the plans for reforms to improve the business environment. Volodymyr Zelensky started a dialogue on security which is now the number one issue for the country. The current situation at the border reminds the President of psychological pressure, although. That’s not something new as it has lasted since 2014, but the degree of risk is different. However, since 2014, military training in Ukraine has intensified, the country understands its weaknesses, so it reacts to the situation without panic. Moreover, many countries are now allies of Ukraine. And the visits of world leaders testify to the unification of the United States and European countries in this matter. The economic issues were discussed next. Mr. President stressed that in this context, open financial guarantees from other countries, macro-financial assistance (not only for security but also for infrastructure, etc.) provided by international partners are important, as it gives a signal to others that the war is not likely to break out in the near future. Rostyslav Shurma focused on the countrys key economic priorities and risks. Thus, he noted that at the beginning of the year the situation in the foreign exchange market was a matter of concern, but now it has stabilized, according to experts, the fluctuations have already passed. There is also no risk in the payment of the public debt, the country is closing the planned deficit of 3.5% and preparing for a large payment in September. In the context of energy, the country is gradually coming out of the heating season without any disruptions in all energy resources, and the coal reserves have been restored. Also, the country will move towards electrification — a new strategy is being developed. And the increase in energy demand will be covered by nuclear energy and renewable sources. Although the situation with green energy has been difficult, it has been resolved and debts to investors will soon be repaid. The new green will be built on two principles - non-subsidized, coupled with balancing capacity, so as not to overload the power system. As for nuclear energy, a 10-year development program is currently being prepared. Mr. Shurma also mentioned the Government priorities. The first is stimulating consumption and demand. For example, through domestic programs like eSupport, which is considered a pilot project to stimulate the affected sectors of the economy. The experience is planned to be scaled up, and the tools are currently being prepared. Among the large investment instruments, it is planned to launch a large mortgage, a major thermal modernization, a program to stimulate the use of electric cars, etc. The second is boosting investment through the cost of funds. For example, there are plans to scale the program 5-7-9 to specific sectors of the economy - engineering, aircraft, light industry equipment, etc., so that the cost of capital for investment is competitive with neighboring countries. The third is digitalizing the economy, developing Diia, the electronic products, and services. Taxes were discussed separately. This week a special regime Diia.City was launched and in case of a positive experience, it will be implemented in comprehensive tax reform and extended to certain other industries. Anna Derevyanko, the EBA Executive Director, was the first one to speak on behalf of the European Business Association. She thanked the President for the meeting, which helped business and government synchronize their agenda. Surely, business is now mainly concerned with geopolitics and security. But the community does not panic, because business is working on a basic peace scenario. At the meeting, business voiced its expectations from the reforms of the judiciary and law enforcement systems, as well as the fight against the shadow economy. Thus, it is important to continue the fiscalization and focus not only on combating smuggling but also to control the market situation, resolve the situation with e-commerce, promote the protection of intellectual property rights (by combating counterfeiting, gray imports, parallel imports, etc.) At the same time, business representatives stressed the need to reduce fiscal pressure on business, particularly, the burden on the payroll. Moreover, the elimination of planned tax audits of business and in general the reduction of the number of tax audits of transparent business, and a greater focus on combating the shadow. In addition, the transformation of the Tax Service into a service body. Separately, business stressed the importance of having a separate business meeting with the tax authorities, as communication is currently problematic. We also discussed the importance of maintaining macroeconomic stability, the countrys energy situation and energy prices, modernizing labor legislation, developing health care, continuing privatization, concessions, extending the principle of public-private partnership to other businesses, and more. At the end of the dialogue, it was agreed to have regular industrial meetings with business representatives of the European Business Association. The European Business Association sincerely thanks Volodymyr Zelensky and Rostyslav Shurma for their openness to the community and their readiness to present a real picture to business. We very much hope that events of this format, namely, industrial ones, will take place on a regular basis! After all, dialogue is extremely important at such a turbulent time for the country.

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Yesterday, February 9, the European Business Association met with Volodymyr Zelensky, the President of Ukraine, and Rostyslav Shurma, the Deputy Head of the Office of the President of Ukraine. The discussion was focused on the economy and security issues so that businesses can be informed of what is happening on Ukraine’s borders, what is going on inside the country, and what are the plans for reforms to improve the business environment.

Volodymyr Zelensky started a dialogue on security which is now the number one issue for the country. The current situation at the border reminds the President of psychological pressure, although. That’s not something new as it has lasted since 2014, but the degree of risk is different. However, since 2014, military training in Ukraine has intensified, the country understands its weaknesses, so it reacts to the situation without panic. Moreover, many countries are now allies of Ukraine. And the visits of world leaders testify to the unification of the United States and European countries in this matter.

The economic issues were discussed next. Mr. President stressed that in this context, open financial guarantees from other countries, macro-financial assistance (not only for security but also for infrastructure, etc.) provided by international partners are important, as it gives a signal to others that the war is not likely to break out in the near future.

Rostyslav Shurma focused on the country’s key economic priorities and risks. Thus, he noted that at the beginning of the year the situation in the foreign exchange market was a matter of concern, but now it has stabilized, according to experts, the fluctuations have already passed. There is also no risk in the payment of the public debt, the country is closing the planned deficit of 3.5% and preparing for a large payment in September. In the context of energy, the country is gradually coming out of the heating season without any disruptions in all energy resources, and the coal reserves have been restored. Also, the country will move towards electrification — a new strategy is being developed. And the increase in energy demand will be covered by nuclear energy and renewable sources. Although the situation with green energy has been difficult, it has been resolved and debts to investors will soon be repaid. The new “green” will be built on two principles – non-subsidized, coupled with balancing capacity, so as not to overload the power system. As for nuclear energy, a 10-year development program is currently being prepared.

Mr. Shurma also mentioned the Government priorities. The first is stimulating consumption and demand. For example, through domestic programs like eSupport, which is considered a pilot project to stimulate the affected sectors of the economy. The experience is planned to be scaled up, and the tools are currently being prepared. Among the large investment instruments, it is planned to launch a large mortgage, a major thermal modernization, a program to stimulate the use of electric cars, etc. The second is boosting investment through the cost of funds. For example, there are plans to scale the program 5-7-9 to specific sectors of the economy – engineering, aircraft, light industry equipment, etc., so that the cost of capital for investment is competitive with neighboring countries. The third is digitalizing the economy, developing Diia, the electronic products, and services. Taxes were discussed separately. This week a special regime “Diia.City” was launched and in case of a positive experience, it will be implemented in comprehensive tax reform and extended to certain other industries.

Anna Derevyanko, the EBA Executive Director, was the first one to speak on behalf of the European Business Association. She thanked the President for the meeting, which helped business and government synchronize their agenda.

Surely, business is now mainly concerned with geopolitics and security. But the community does not panic, because business is working on a basic peace scenario. At the meeting, business voiced its expectations from the reforms of the judiciary and law enforcement systems, as well as the fight against the shadow economy. Thus, it is important to continue the fiscalization and focus not only on combating smuggling but also to control the market situation, resolve the situation with e-commerce, promote the protection of intellectual property rights (by combating counterfeiting, gray imports, parallel imports, etc.)

At the same time, business representatives stressed the need to reduce fiscal pressure on business, particularly, the burden on the payroll. Moreover, the elimination of planned tax audits of business and in general the reduction of the number of tax audits of transparent business, and a greater focus on combating the “shadow”. In addition, the transformation of the Tax Service into a service body. Separately, business stressed the importance of having a separate business meeting with the tax authorities, as communication is currently problematic.

We also discussed the importance of maintaining macroeconomic stability, the country’s energy situation and energy prices, modernizing labor legislation, developing health care, continuing privatization, concessions, extending the principle of public-private partnership to other businesses, and more.

At the end of the dialogue, it was agreed to have regular industrial meetings with business representatives of the European Business Association.

The European Business Association sincerely thanks Volodymyr Zelensky and Rostyslav Shurma for their openness to the community and their readiness to present a real picture to business. We very much hope that events of this format, namely, industrial ones, will take place on a regular basis! After all, dialogue is extremely important at such a turbulent time for the country.