Ukraine Refugees: From Temporary Protection to Encouraging Return to Support the Ukrainian Economy
ECONOMIC POLICY AND ITS IMPACT
Key Messages
- War of attrition. President Trump’s promises of a quick end to the war are unlikely to come true. German and European policy must shift from providing temporary protection to supporting a productive return to support the Ukrainian economy
- At present many Ukrainian refugees still require substantial financial support from their host country. This is particularly the case in Germany, with the fiscal cost sapping popular support for Ukraine
- Ukraine needs people to strengthen its economy, including the ramping up of domestic production of weapons and machinery. A productive return thus yields a double dividend
- German and European enterprises should be encouraged to start producing in Ukraine by providing them with a guarantee against bomb damage. European FDI in Ukraine, in particular by German SMEs, could provide returning refugees with productive jobs
- Encouraging the productive return of refugees would also make sense in the unlikely event of a near-term cessation of hostilities
Abstract
With the war now one of attrition, the Ukrainian economy needs to be strengthened. To this end, a package of measures is needed to incentivize the return of Ukrainian refugees and help businesses invest in Ukraine to create the jobs needed by returning refugees.
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Citation
Yuriy Gorodnichenko and Daniel Gros: "Ukraine Refugees: From Temporary Protection to Encouraging Return to Support the Ukrainian Economy," EconPol Forum 26 (1), CESifo, Munich, 2025.