A potential conflict of national interests over Ukrainian refugees needs to be anticipated and pre-empted.
The wholesale Russian invasion of Ukraine forced millions of its citizens to flee their homes in search of salvation, including abroad. According to recent estimates, Europe took most of the refugees—5.8 million out of 6.2 million recorded globally.
In this context, Germany’s role can hardly be overestimated. Until now, the country has provided shelter for almost 1.1 million Ukrainians. Among European Union countries only Poland can boast more—1.6 million.
The escape of Ukrainians to Germany was facilitated from the outset by visa-free entry and temporary residency, with no asylum procedures. As a result, the legal conditions for the integration of Ukrainian refugees are quite favourable, including not being excluded from employment—18 per cent are already employed.
Even staying outside the labour market at first, they receive higher social benefits than obtain in Ukraine and are directly integrated into the support structures of the job centres. Such official hospitality, along with many Ukrainian refugees having relatives and/or friends in Germany, has created favourable conditions for more dynamic integration than with others forced to move in the past. But what will happen when the war is over?
Lack of skilled workers
Even before the full-scale invasion, Ukraine was in deep demographic decline. For many reasons, by 2022 its population had decreased by 20 per cent since 1991—from 52 to 42 million. The barbaric attack by its north-eastern neighbour grossly exacerbated this. So for Kyiv a priority after the war will be to try to bring back most of the refugees.
Germany is however experiencing a significant shortage of labour: nearly two million jobs were vacant in the last quarter of 2022. There was an acute shortage of healthcare workers, carpenters, butchers and other labourers—even in information technology the estimated shortfall is 100,000.
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The country’s authorities have recognised that a lack of skilled workers could enduringly hamper Germany’s economic growth. At the East German Economic Forum in June, the chancellor, Olaf Scholz, said the country could not fill the labour shortage from its domestic workforce alone.
Having invested so much in so many respects in the integration of Ukrainian refugees—overwhelmingly female and otherwise largely young, healthy, well-educated and committed—Germany is unlikely to give up on them overnight. Indeed, the government will do everything in its power to retain those Ukrainians who have integrated substantively into the host society.
Investments in Ukraine
The longer the war lasts and Ukrainian refugees remain abroad, the more will settle where they are. Yet it is vital for Ukraine to compete for every refugee—and, strange as it may seem, Germany can help Ukraine in this.
First, German investments in Ukraine, even during as well as after the war, can have a positive impact on the return of Ukrainians but also be of interest to Berlin. Direct investments in Ukraine to restore and support its socio-economic potential, along with the defence industry, will expand the purview and influence of German capital in eastern Europe. Wages at enterprises with German investments will be high by Ukrainian standards but lower than if such enterprises were opened and operated in Germany.
One can even assume that in such a situation the German government would go so far as to encourage some Ukrainian refugees to return home to secure employment at its enterprises in Ukraine. In any event, modern German production facilities in the country, associated with decent wages, would bring back Ukrainian refugees from other, less wealthy European countries. Without any doubt, Kyiv would also be very interested in that.
Indeed, Germany is already taking the first steps in this direction. Rheinmetall announced in May its intention to set up a joint venture with the Ukrainian state-owned conglomerate Ukroboronprom, to manufacture and repair armoured vehicles in Ukraine.
Secondly, even though it has an enduring need for foreign labour, Germany will encourage the more poorly integrated Ukrainian refugees to return home after the war. Here Switzerland provides a template.
The Swiss government is already developing a strategy on returning, as it envisages 80 per cent of Ukrainian refugees will do. It foresees a departure window of six to nine months, once the temporary protection is lifted. Financial assistance of 1-4,000 Swiss francs (€1,050-4,200) per person, depending on the departure time, is considered. The German government will probably over time develop a similar repatriation strategy, implementation of which would be welcomed by Ukraine.
Key incentives
It is certainly good to have partners in the return of the refugees, but the initiative should lie primarily with the Ukrainian government. Key incentives, if used efficiently, could activate a return wave.
Land and housing upon return: the war, which is turning flourishing cities into post-apocalyptic wastelands, has deprived hundreds of thousands of Ukrainians of their homes. No one will return if they have no place to return to. Consequently, refugees should be offered a real, not hypothetical, chance to get a new home, soon after returning.
Providing a plot to build a house could be a strong incentive. Land spoiled by the Russian invaders is now very plentiful. Sooner or later it will have to be redeveloped, so why not involve the refugees themselves? A scheme of interest-free mortgages for the purchase of housing should also be developed. The state’s promise already to provide refugees with flats in new apartment blocks built after the war may alike be a decisive factor in returns.
One-off repatriation payments: the Ukrainian government could act similarly to its Swiss colleagues but, instead of paying refugees to leave the country, do the opposite—pay them to return. The amount of assistance could differ depending on circumstances (such as single-person return or family reunification). Such a programme could involve a numer of payments to refugees over time, while they are looking for housing, employment and so on.
Investment boom as a prerequisite for homecoming: large-scale investment projects attracting foreign capital to Ukraine will indirectly increase the flow of returning refugees, in the medium to long run. Of course, gaining the support of foreign investors for postwar reconstruction will be a serious challenge: the government will need to find special arguments and guarantees if serious money is to be invested in a war-torn country with a missing population. But if it succeeds, the possible ‘Ukrainian economic miracle’ following the war will stimulate large-scale returns.
Strategic partnership
Certainly, it will be extremely difficult for Ukraine to cope with a complex reconstruction and implementation of the suggested repatriation programmes without the help of international financial organisations and partner countries. Germany can and should be among the leaders of this process. It is also in its national interest to do so.
After all, it would not only strengthen the strategic partnership between Berlin and Kyiv for many years to come. It would also establish Germany’s creative leadership in Europe and a world on the threshold of global change.
Taras Romashchenko is an associate professor of international economics at Bohdan Khmelnytsky National University of Cherkasy, Ukraine. He is also a visiting professor at Bielefeld University and visiting research fellow at Danube University Krems.