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• Ukraine has needed financial help to defend against Russian attack since February
• New financial support plan: “Peace Bonds” for retail investors in the EU and the US
• Discussions are ongoing, there is no official confirmation of the program yet
Ukraine’s economy is expected to shrink by almost 45 percent in 2022
Since Russia launched a war of aggression against Ukraine on February 24, the smaller country has needed financial support – the World Bank predicted in mid-April that Ukraine’s economy would collapse by as much as 45 percent by the end of the year. In order to be able to withstand Russia, Ukraine has come up with all sorts of financial aids since February. According to the Ukrainian Digital Minister Mykhailo Fedorov, an NFT program and a crypto donation platform were launched in several Twitter posts. According to “Bloomberg”, around 1.5 billion US dollars have already been raised through bond auctions, and around 10 billion US dollars have so far been pledged to Ukraine in humanitarian and military aid.
According to Bloomberg, the issue of so-called “peace bonds” for small investors in the EU and the USA is planned.
Small investors should be able to support Ukraine via “peace bonds”.
A source told Bloomberg that talks were being held with the EU about issuing such peace bonds to fund the war effort and reconstruction. Brussels has offered to take over the advice and mediation with the national authorities of the EU countries: Within the EU, the individual countries are responsible for the national monitoring, approval and market launch of the bonds.
Ukraine, represented by a law firm, is also in contact with the US Securities and Exchange Commission (SEC). As Bloomberg reports, however, the SEC declined to comment – the Ukrainian Ministry of Finance did not immediately respond to the request either.
The informant familiar with the talks reported that Ukraine is aiming for not just one, but several issuances of the peace bonds – more details are not known, however.
Expert predicts great interest among investors
According to the business magazine Forbes, CFRA strategist Sam Stovall is confident that investors could be very interested in such a peace bond. Nothing is certain yet, however, since the security of the investment and thus the attractiveness of the investment opportunity depend heavily on who will ultimately be responsible for the repayment: If the responsibility lies solely with the economically weak Ukraine, an investment is significantly more speculative than if the responsibility is also shared the EU – or the USA.
According to Bloomberg, Kyiv anticipates total reconstruction costs of half a trillion dollars, while current losses to the war effort are in the tens of billions of dollars.
Olga Rogler / Editor finanzen.net
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