Six frugal countries this week circulated a letter threatening to block a deal on the next EU budget unless “hundreds of billions” of euros in spending was cut. 

The Dutch and Germans, ever the most zealous keepers of the frugal flame, want to redirect what remains away from regional and farming funds, towards innovation and defence.  

For those following EU fiscal debates, this song will sound familiar. So-called ‘net payer’ countries have never liked sending money to the economic periphery. 

In 2013, after a year of bickering, Britain, Germany, and the Netherlands killed a European Commission plan for a five percent increase and pushed through the EU’s first-ever budget cut, with farm and cohesion funds taking the biggest hit.

But new research suggests that the frugals may be shooting themselves in the foot. 

Last week, Olga Ivanova, a senior researcher at the Netherlands Environmental Assessment Agency (PBL), published a study in Dutch economics journal ESB calculating what EU money actually does for the Netherlands’ 12 provinces. 

And, for most of them, she found that the growth effect of EU investment outweighed their share of what the Netherlands paid into the budget. 

Using PBL’s own economic model, she traced 10 EU funding streams between 2013 and 2024, from Horizon science research grants to farm subsidies and regional development money. 

Across the Netherlands as a whole, provinces get back about 99 cents in extra growth for every euro paid out to the EU budget.

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For more than three decades, the Bangladeshi political left has maintained an unyielding stance on natural resources like gas, coal, and minerals, insisting that state entities must develop them exclusively. Foreign energy companies are viewed with deep suspicion, while production-sharing contracts are routinely condemned as vehicles designed to siphon national wealth to foreign multinationals. Coal […]

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Two American charities recently announced a new fund to fight forest fires. They want to raise US$100 million to help countries find fires faster and put them out sooner. But the fund, announced at the UN General Assembly, is limited to South America, home to the Amazon rainforest. Southeast Asia is left out, and so […]

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Ukraine’s reconstruction is being planned from a map of destruction. Financing its private assets instead follows a map of earnings. 

Since the full-scale invasion, the European Bank for Reconstruction and Development (EBRD) has lent  $131m [€115.3m] to Nova Post, Ukraine’s largest parcel and courier network — an established business with visible demand, revenue, and an owner able to put up around a quarter of the cost itself.

Shipments grew 16 percent in 2024 as traffic reoriented towards western and central Ukraine and across Ukraine’s  borders with the EU. Part of the financing paid for more than 600 safety capsules and shelters at its premises. A wartime resilience need met an earnings stream, and a lender followed. 

Three sets of records show where else those conditions hold. 

The first is what the international financial institutions have financed. Over four years the EBRD,  European Investment Bank (EIB), International Finance Corporation (IFC) and World Bank announced some $19bn (€17bn) of project-level finance for Ukraine, more than two-thirds of it to public authorities and  state-owned companies.

Of the $2.4bn that went directly to private companies, eight corporates  took 83 percent — around $450m to ArcelorMittal’s steel mill at Kryvyi Rih alone.

Guarantees to banks, some $1.8bn of them, are meant to reach smaller and mid-sized firms. Yet bank lending accounts for under four percent of Ukrainian capital investment. Mid-sized companies appear to be underserved. 

The second is what foreign investors have done. They put around $2.9bn of new equity into Ukraine from 2022 to 2025, most of it into services rather than industry or energy.

Across 134 EBRD financed projects, announced third-party equity appears in three, all of them technology companies incorporated outside Ukraine. A growing number of international venture funds are entering Ukrainian defence technology, whose assets can travel with global demand. A food processor in Vinnytsia, for instance, has neither that pull nor that mobility. 

The third is what companies in Ukraine do with their own money, and it dwarfs the other two. Capital investment runs at around $18bn a year, and companies’ own funds finance 71 percent of it.

In construction, the pattern is starker still: unfinished apartment blocks in Kyiv are going up without bank debt, paid for by the people buying the flats. 

That money is heavily concentrated. Kyiv and its surrounding region take 54 percent of it; the eight western regions 16 percent. The eight frontline and border regions, which hold 78 percent of the damage and 62 percent of the projected cost of rebuilding, take seven percent. 

Three kinds of financing, one pattern. Lenders and investors follow earnings, not destruction. 

The limits of private money

Much of reconstruction will therefore remain publicly financed. International funding flows to public entities which meet urgent needs and will likely not go bankrupt. For the most part, this is right. A large share of the damage sits in assets that never earned or whose earnings the war has interrupted, and repairing schools, de-mining fields, or restoring homes whose owners cannot pay will remain public spending.

But the balance matters beyond making public funds reach further. State-led reconstruction creates revenue-generating assets in public hands. EU accession will subject them to competition and state-aid rules they do not currently face, and some will have to be restructured or sold. 

Expanding the overlap between the two maps means mitigating the externalities of war more effectively. Energy infrastructure was hit 4,500 times in 2025, drones striking transformers and substations and interrupting the cash flows of otherwise functioning power plants.

When the Kakhovka dam was destroyed in 2023, up to 1 million people lost access to drinking water, and water supplies across four regions, including Kryvyi Rih’s, have had to be replaced or rebuilt — and  the municipal utilities involved are counterparties private investors are reluctant to contract with. 

Despite around $200bn of international public non-military support to Ukraine since 2022, the instruments addressing those externalities are patchy at best. A solar developer financing a projec against a Ukrainian public buyer needs a payment obligation it can rely on, and insurance that covers both capital and cash flow.  

Closing those gaps is a political decision, not a technical one. European decision-makers need to mandate the EBRD and the EIB to stand behind public buyers of services, widen the guarantees and risk cover available to private investors, and take more risk on their own balance sheets. Of the  €9.6bn EU Ukraine Investment Framework, only €220m is equity, anchoring a fund meant to reach €1bn over time. That pool of public risk capital should be larger. 

Export credit agencies are a separate lever, and it is national governments that set how far they can  reach. Denmark’s agency has backed more than €450m of financing for Ukrainian wind farms built  with Vestas turbines, but uptake of a broader European export credit scheme administered by the EIB has been slow. 

None of this fully aligns the destruction and earnings maps. It widens the ground on which they  meet — the part of the rebuilding that can keep earning when the public money stops.

German investigators have linked an arson attack in Munich, the planned sabotage of drone manufacturer Skyeton near Prešov, and an attempted attack using an explosive drone at Leipzig-Halle Airport to Russia’s military intelligence agency, the GRU, according to media reports.

The most important finding is that part of this network was said to have operated from Slovakia.

We do not yet know all the details of the ongoing investigation, and I trust that Slovak security authorities will thoroughly examine the circumstances of the case and determine the true scope of the entire operation.

However, according to the German security services’ findings so far, the Slovak connection is not marginal.

Slovakia may have served as one of the hubs of a wider network linked to Russia’s military intelligence agency, the GRU.

According to German security sources, two Bulgarian nationals detained after the arson attack in Munich on 3 September were part of a GRU-linked group operating from Slovakia. Incendiary devices were thrown near Rohde & Schwarz and Helsing, companies linked to the defence industry and support for Ukraine.

The same wider network was said to have been preparing an arson attack on Skyeton’s plant near Prešov, which produces reconnaissance drones for Ukraine. Slovak authorities thwarted the plan and detained Latvian and Ukrainian nationals. Another suspect was detained in Germany.

The nationality of those carrying out the attacks is not decisive.

The current model of Russian operations uses nationals of different countries, often recruited through intermediaries. A professional GRU officer can therefore remain several layers removed from the attack itself. Recruitment may take place via Telegram, payments through cryptocurrencies, and those carrying out the attacks may not even know precisely who the real instigator is.

German investigators argued there was also a link to an attempted attack using an explosive drone at Leipzig-Halle Airport on 4 August.

The target was reportedly a Ukrainian cargo aircraft used to transport material. The German government subsequently publicly attributed responsibility for the incident to Russia.

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At the 18th BRICS Summit in New Delhi, Chinese President Xi Jinping proposed that China take the lead in establishing a BRICS AI open-source community. His proposal envisaged cooperation in developing and applying large language models, conducting AI training and seminars and constructing a more open AI ecosystem. He also called for a broader international […]

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