Lagarde reveals what could reshape Ukraine after EU entry
Photo: Christine Lagarde, President of the European Central Bank (Getty Images)
Eastern European countries have demonstrated impressive economic growth after joining the EU. Their current prosperity now stands at about 80% of the European average, according to European Central Bank President Christine Lagarde.
Lagarde reminded that the Iron Curtain, after World War II, divided Europe. Trade between East and West fell by nearly 50%. “It was like imposing a 50% tariff,” she said. This led to major losses in welfare and the isolation of the Eastern bloc from global markets.
"But the transformation since Europe's eastern enlargement has been nothing short of remarkable. On average, countries that joined the EU in 2004 have nearly doubled their GDP per capita over the past two decades," the ECB president said.
Lagarde noted that from 2004 to 2019, GDP per capita in the new EU member states grew 32% more than in countries that had already been part of the bloc.
"The difference was deeper economic integration, and those that were already highly embedded in the regional economy gained the most. While all new members experienced gains, countries with stronger integration into regional value chains recorded nearly 10 percentage points higher GDP per capita growth compared with less integrated peers, regardless of geographic proximity," she said.
Opportunities for Ukraine
Lagarde stated that Ukraine is already integrated into the European Union's economic processes, with Europe being the country’s main trading partner, accounting for around 50% of its goods trade.
"The EU stands to benefit, too, from having Ukraine as a partner," she said.
The ECB chief gave two examples. In the automotive sector, Ukrainian companies already produce about 7% of all wiring used in EU vehicles.
"As the industry shifts towards electric vehicles, which require more complex wiring systems, Ukraine’s manufacturing base is well-positioned to scale up and play a larger role in the EU value chain," she explained.
Lagarde also cited the example of drone production, which has become one of the most advanced industries in Ukraine.
"Drones are not only a critical component of modern warfare, but also a technology with substantial spillover effects and far-reaching dual-use applications. Indeed, the country’s ambitious goal of producing 4.5 million drones by 2025 has accelerated innovation in materials science, battery technology, and 3D printing. These advances are already finding civilian applications in sectors such as logistics, agriculture, and emergency response," she said.
Public support for EU membership among Ukrainians
It’s worth noting that support for joining the European Union has reached a record high during the entire monitoring period of the Democratic Initiatives Foundation and the Razumkov Center.
According to a Razumkov Center survey, about half of Ukrainians believe the country will become an EU member within five years. Specifically, 23.3% believe accession will happen in 1–3 years, while 27.1% expect it within 3–5 years. Additionally, 15% think Ukraine will join in 5–10 years, and another 5% in 10–20 years.
