KSE Institute has released an analytical paper summarising a closed high-level discussion, “EU Accession: What’s Next? Macroeconomic Policy for Integration, Security, and Growth,” focused on Ukraine’s macroeconomic policy choices in the context of EU accession, a protracted war, and long-term growth challenges.

The discussion and the analytical paper were prepared within the framework of the Swedish Centre for European Future of KSE. Participants included representatives of the Government of Ukraine — in particular the Ministry of Finance and the National Bank of Ukraine — as well as experts from the European Commission, international financial institutions, and the analytical community.

The event was held under the Chatham House rule. Accordingly, the paper synthesises key analytical conclusions of the discussion without attributing views to individual participants.

The discussion focused on two core questions: how structural reforms and closer alignment with the EU can generate sustained, productivity-driven growth, and how macro-fiscal frameworks need to evolve to support this process amid elevated security risks and financing constraints.

Economic activity, EU alignment, and growth constraints. The war is treated as a long-term structural constraint on economic growth rather than a temporary shock. Reconstruction alone is insufficient to ensure income convergence with the EU. Investment and productivity growth remain the central drivers of sustainable convergence, beyond the recovery of output levels.

Investment, institutions, and the foundations of growth. Sustained growth requires large-scale private investment. Its scale and quality depend critically on institutional capacity, protection of property rights, regulatory predictability, and effective corporate governance — including in the state sector.

The defence industry as an economic and strategic sector. Defence spending is increasingly viewed as a potential driver of industrial development. Ukraine’s integration into European defence value chains, joint production, and common standards could generate long-term economic benefits while strengthening strategic resilience.

Public finance management. Fiscal policy operates under conditions of wartime pressure and limited domestic resources. Key priorities include expenditure efficiency, broadening the tax base, and ensuring that public finance institutions can absorb large volumes of external support without undermining economic effectiveness.

Debt sustainability. The rise in public debt is a direct consequence of the war. Debt sustainability depends not only on debt levels but primarily on growth dynamics, financing terms, and access to concessional instruments with long maturities. In this context, it was emphasised that debt sustainability should be discussed in close connection with the issue of reparations and addressed at the international level.

External sector and capital flows. Closer EU alignment is gradually reshaping the structure of external financing — from predominantly official assistance toward a greater role for private capital and investment. This transition requires careful macroeconomic coordination to mitigate financial stability risks.

Monetary policy and the exchange-rate regime. Price stability remains a core macroeconomic priority. A flexible exchange rate and a consistent monetary policy framework are seen as essential tools for economic adjustment under wartime conditions and during gradual EU alignment. In the longer term, the discussion also addressed the potential role of the euro as a nominal anchor for macroeconomic expectations, conditional on meeting the necessary macroeconomic and institutional prerequisites.

Institutions, governance, and EU accession as a reform anchor. EU accession is viewed not only as a foreign policy objective but as a mechanism for domestic reform. Conditionality and the phased accession process provide a framework in which institutional capacity becomes a decisive determinant of economic outcomes.

In conclusion, the authors emphasise that Ukraine’s convergence with the EU is a long-term process requiring an investment- and productivity-driven growth model, realistic fiscal choices, and resilient institutions. In this context, EU accession is framed as the central political and economic anchor for Ukraine’s post-war development.