Italy and Ukraine: A European Perspective on Reconstruction

Italy hosted a bilateral conference on the reconstruction of Ukraine at the Palazzo dei Congressi in Rome on April 26, 2023. Prime Minister Giorgia Meloni committed to hosting this conference when she met with President Volodymyr Zelenskyy in Kyiv at the end of February. Before delivering her keynote speech to the representatives of Ukrainian and Italian businesses, Meloni met with Prime Minister Denys Shmyhal of Ukraine.

Meloni reiterated in her remarks that Italy will continue to “do its part … to [fully] support Ukraine on political, military, humanitarian, and reconstruction levels.” In the various meetings held in Rome, Italian officials emphasized to Shmyhal their view that while the search for peace is necessary, it cannot be achieved by sacrificing Ukrainian territory. Meloni added that Italy wants a “diplomatic solution to this conflict … but we do not think that the solution to the conflict can be the surrender of Ukraine.” President Sergio Mattarella echoed her comment, calling for a “just peace that respects Ukraine’s territorial integrity”.

The war is far from over, Meloni cautioned, and although the conference was focused on ways to help Ukraine now, it was planning “also, and above all, for tomorrow”. Starting discussions on reconstruction now can be helpful for a number of reasons.

Planning for the reconstruction can give greater substance to Ukraine’s ambition to join the EU. Italy’s previous government, headed by Mario Draghi, was instrumental in pushing the European Council to grant Ukraine the status of candidate for accession to the EU, overcoming the initial hesitancy of some of the bloc’s heavyweights. While candidate status was politically necessary to send the unambiguous message that the future of Ukraine is in Europe, many significant challenges remain—from Kyiv’s ability to meet the Copenhagen Criteria promptly to the impact that a country with a population of 41 million can have on the institutional and geopolitical balances in the EU. Moreover, Ukraine has significant business and commercial ties with Poland, Germany, and other Central and Eastern European countries, but fewer ties with the rest of Europe. To deepen its integration into Europe, Ukraine must strengthen and expand its economic and logistical ties to European countries beyond its immediate neighborhood.

At the same time, strengthening these ties will be instrumental in ending Ukraine’s economic and logistical dependence on Russia. This dependence is now far less significant than it was ten years ago, but there are still some areas in which Russia can create problems. On the logistical side, Ukraine did a fine job of disconnecting the country’s power grid from the larger Russian-operated network within just two weeks after Russia invaded. However, other sectors—for instance, nuclear technology and energy—are still dependent on Russia or Russia’s allies such as Belarus.

The Russian war of aggression that began on February 24, 2022, has destroyed the political and strategic connections between Kyiv and Moscow once and for all. Ukraine is now fully oriented toward the EU. Yet, to make this strategic shift substantive and irreversible, economic ties must become even deeper and stronger. Kyiv had already made significant progress in this regard even before the war. Its macro-economic fundamentals are far healthier than they were in 2014, and what it needs now is a further step to detach definitively from Moscow’s economic and financial influence. Moreover, Ukraine’s further integration into Europe can help prevent China from stepping in to fill the gap, especially as Beijing is already one of Kyiv’s top economic partners.

For its part, Italy has a strong interest in pursuing closer economic ties with Kyiv. The Russian war of aggression against Ukraine has likely changed Rome’s relations with Moscow for good. While it will be necessary eventually to find a way to re-engage, Italy is unlikely to return to “business as usual” in its relations with Moscow. In Ukraine, Italy can become a major driver of the reconstruction—especially through its small and medium enterprises (SMEs), which have both the expertise and the flexibility to operate in the Ukrainian context.

At the bilateral conference, Foreign Affairs Minister Antonio Tajani mentioned Italy’s SMEs among the actors who can help Ukraine in the future, sending a message to a number of Italian sectors and constituencies that they have a part to play in tomorrow’s Ukraine. Against this backdrop, Minister of Economy and Finance Giancarlo Giorgetti announced that Italy will commit €100 million to the European Investment Bank’s “EU for Ukraine” Initiative. This activism on the part of the government serves an additional, more political goal. While the current government has been rock-solid in its support for Ukraine and its transatlantic commitments, a significant portion of Italy’s public opinion wants the war to be over, even if this means that Ukraine must lose part of its territory.

Moreover, a considerable proportion of the Italian public is still against—or at the very least wary of—Italy’s military support for Ukraine. However, war fatigue is emerging in public opinion in other Western countries as well. Even in the United States, experts are now discussing options to end the war that would have been unthinkable less than a year ago. In this context, to make Italy’s commitment sustainable and reduce the pressure from public opinion, the Italian government must show that it is actively providing not only military assistance, but also other forms of aid.