Since the onset of Russia’s February 2022 invasion of Ukraine, Germany has emerged as a steadfast ally, providing extensive support across various domains.
German Chancellor Olaf Scholz recently reaffirmed this commitment, emphasizing that Germany will remain Ukraine’s biggest national supporter in Europe, even amid discussions of budget cuts. During a visit to Moldova, Scholz declared, “Germany will not let up in its support for Ukraine. We will continue to support Ukraine for as long as necessary.” Germany is also exploring technical solutions to use frozen Russian assets to aid Ukraine—just one example of its multifaceted approach to supporting the war-torn nation. Before Russia’s invasion, Germany was one of Ukraine’s top three investors. This history of cooperation between the two nations has no doubt contributed to Germany’s resolve to support Ukraine.
Financial assistance and economic support
Germany has committed significant financial resources to stabilize Ukraine’s economy and support its recovery. As of 2024, Germany has provided nearly €34 billion in various forms of aid, including direct financial assistance, loans, and contributions to international financial institutions. These efforts are vital in helping Ukraine maintain economic stability and fund essential government functions during the conflict.
In addition to direct financial aid, Germany has been instrumental in fostering economic ties between the two nations. German businesses have been encouraged to invest in Ukraine, with 43 percent of German companies in Ukraine planning new investments in sectors such as energy, pharmaceuticals, IT, and outsourcing. These investments are crucial for Ukraine’s economic recovery, providing jobs and stimulating growth despite the ongoing conflict. Additionally, trade between the two countries has flourished, with Ukraine’s trade volume with Germany surpassing that of Germany’s trade with Russia. Ukrainian entrepreneurs have also benefited from German support, with grants of up to €20,000 available to help them restart and sustain their businesses.
Humanitarian aid and reconstruction efforts
Germany has been at the forefront of humanitarian efforts, delivering essential supplies, medical aid, and support for displaced Ukrainians. The German government has worked closely with NGOs and international organizations to provide food, water, shelter and medical care to those affected by the conflict. Furthermore, Germany has pledged substantial funds for the reconstruction of war-torn areas, focusing on rebuilding infrastructure and restoring essential services. The reconstruction efforts are concentrated on critical sectors such as energy, healthcare, and infrastructure, ensuring that Ukraine can recover and rebuild its economy.
The German Development Bank (KfW) plays a crucial role in these efforts, financing projects that support economic recovery in regions like Sumy, Chernihiv and Kyiv. Through initiatives like grants for micro-enterprises and small businesses, KfW is helping to revitalize Ukraine’s economy at the grassroots level, fostering resilience and growth in the face of adversity.
Diplomatic and technical support
Germany has also played a pivotal diplomatic role in rallying international support for Ukraine. This includes advocating for sanctions against Russia, supporting Ukraine’s bid for EU membership and participating in international forums to uphold Ukraine’s sovereignty and territorial integrity. German agencies like Euler Hermes have provided export credit financing and war-risk insurance programs to protect businesses operating in Ukraine, mitigating the financial risks associated with the conflict. In many cases war-risk insurance programs are crucial for final decisions on investment in Ukraine.
Technical support has been another crucial area of German assistance. Germany has provided expertise in governance, legal reforms and anti-corruption measures, helping Ukraine build a more transparent and accountable government. These efforts are essential for Ukraine’s long-term stability and integration into European and global markets.
Support for the energy sector and infrastructure
Recognizing the strategic importance of energy security, Germany has provided substantial support to Ukraine’s energy sector. This includes financial aid for energy infrastructure projects, technical assistance for energy reforms and investments in renewable energy sources. Germany has been instrumental in helping Ukraine repair and upgrade its energy infrastructure, ensuring a stable supply of electricity and gas.
Investment in Ukraine’s defense sector
German defense companies are actively involved in supporting Ukraine’s defense sector and armed forces. For instance, Flensburger Fahrzeugbau GmbH (FFG) is constructing a military repair hub in Western Ukraine to service German military equipment like Leopard 1A5 tanks, enhancing the efficiency of repairs and training Ukrainian mechanics on-site. Additionally, Rheinmetall has formed a joint venture with the Ukrainian Defense Industry to produce weapons and military equipment within Ukraine, further bolstering Ukraine’s defense capabilities. These initiatives aim to streamline logistics and ensure rapid redeployment of military assets.
Another notable development is the production of German Vector drones in Ukraine. German UAV manufacturer Quantum-Systems has launched a factory in Ukraine that produces these drones for the Ukrainian Armed Forces. This partnership not only enhances Ukraine’s defense capabilities but also contributes to the country’s technological and industrial base, further strengthening its resilience.
Challenges and future outlook
Despite Germany’s comprehensive support, challenges remain. Debates within Germany’s coalition government over budget allocations have raised concerns about the sustainability of future aid. The planned US$50 billion loan agreed upon by G7 leaders, intended to cover Ukraine’s budget deficit and military needs, has faced technical challenges and political objections. Despite Chancellor Scholz’s insistence that Germany will continue to be Ukraine’s most significant supporter in Europe, the recent state election victory of the far-right party Alternative for Germany (AfD) could signal a shift in German politics, potentially reducing support for Ukraine as the AfD gains more influence.
Germany’s multifaceted support for Ukraine underscores its commitment to helping the country navigate the challenges posed by the ongoing conflict. Through financial aid, humanitarian assistance, military support, and economic cooperation, Germany continues to stand by Ukraine in its time of need, demonstrating a deep and enduring partnership that is crucial for Ukraine’s survival and future prosperity.
By Adam Mycyk, Partner, and Evgenia Prudko, Legal Advisor, Dentons
