Opening Remarks by NBU Governor Andriy Pyshnyy at the 9th Annual Research Conference Economic and Financial Integration in a Stormy and Fragmenting World, 19 June 2025.
Distinguished guests, colleagues, friends,
This is a special moment. Special not only because we are opening the 9th Annual Research Conference, but because we are doing it here, in Kyiv. In a city that has become a symbol of resilience. In the capital of a European country that has once again suffered a deadly russian attack, and once again stands unbroken. In my country, which has not surrendered and never will.
That is why I would like to begin by expressing my sincere gratitude to all our speakers who were able to join us here today in person. It is a particular honor to welcome to Kyiv the President of the European Central Bank, Madame Christine Lagarde, who has graciously agreed to deliver the keynote address. This is a historic occasion, as it marks the first-ever visit of the ECB President to an independent Ukraine.
We, the Ukrainians, have come to recognize the difference between genuine empathy and mere protocol. We deeply value the willingness to breathe the same air with us, even when that air carries the scent of smoke. We appreciate the choice to stand beneath the same sky, even when missiles fall from it.
Your visit and your presence here are more than a gesture of academic solidarity. They are a political statement. They represent a contribution to the new European reality that we are shaping together.
Let me begin our shared intellectual journey at this conference with a simple reflection: today, we live in a world that is rethinking itself.
Geopolitical fragmentation, deglobalization trends, technological divides and disruptions, crises of trust, radical populism, and wars have created a climate of not only anxiety but also chronic uncertainty. And yet, from the epicenter of this uncertainty and with a clear view of its unfolding, I will take the liberty of offering the first message of this speech.
Uncertainty is no longer a challenge without an answer.
It is gradually, yet irreversibly, being transformed. More and more often, it becomes a catalyst for decision-making. And these decisions are reshaping both our vision and the very architecture of the global order.
Over the past few years, we have grown used to describing uncertainty as "the new normal." But the time has come to look at it differently. Uncertainty is already evolving into a clearer understanding of priorities. It has forced us to focus on strategic conclusions and to build new form factors of cooperation.
This may sound unusual—perhaps even paradoxical—but one of these form factors is integration. Not as a dusty political declaration, but as an active counterforce to fragmentation.
Integration not as a hollow political symbol, but as a tool of survival and a conscious source of strength in a stormy world.
One of the most telling signs of this transformation is the shift in central bank rhetoric. Alongside cautious and conventional messaging, we now hear bold and assertive voices. I notice this increasingly in international meetings and public addresses: central bankers today wield both authority and independence, and they are keenly aware of their responsibility, and are making their voices heard.
Defense and geopolitics, security and the risks of populism—when central bankers speak on these issues alongside monetary policy, they are not overstepping their mandate. On the contrary, central banks are shaping the preconditions in which they fulfill their mandate.
But let us return to the notion of integration as a source of strength. Nowhere is the transformative power of integration more evident than in Ukraine. We are not just changing every structural element of our national "building" and fitting it in the new architecture of Europe. We are pushing Europe forward.
Ukraine is not merely an object of integration. Ukraine is a source of renewal for the European Union. I firmly believe that we do not create strategic challenges for Europe. On the contrary, we reduce those challenges.
We are an answer, not a question.
I find it fitting to turn to the words of the French philosopher Albert Camus: "In the midst of winter, I found there was, within me, an invincible summer." Likewise, at the heart of the storm sweeping through Europe, Ukraine can serve as a source of resolve, momentum, and renewal.
To illustrate this further, let me outline a few key ideas.
First, the institutional capacity of the Ukrainian state remains strong after 1,212 days of full-scale war.
The economy has survived and, despite deep wounds and scars, is recovering step by step. The financial system is resilient, including due to joint efforts and financial support of our partners. The banking sector is operationally sound, liquid, and profitable. Inflation, while persistent and fueled by war, is a challenge we know how to deal with.
At the same time, we prove our ability to manage complex processes while maintaining policy flexibility and adaptability. This enables us to preserve confidence, safeguard macrofinancial stability, and fulfill our mandate under any conditions.
The National Bank of Ukraine is a clear example of resilience and transformation. Even in the midst of war, we continue to reform the financial sector, not only safeguarding our independence but strengthening it. We have learned to see the value of central bank independence as a public good that underlies policy effectiveness. The phrase "independence is not in question" is fully relevant for Ukraine.
We recognize that our institutions must meet European standards for Ukraine to become a participant in joint decision-making within the EU. Institutional sustainability is our asset and our future contribution to European resilience.
We are ready for this, and perhaps one day Kyiv will host a meeting of the Governing Council of the European Central Bank.
Second, EU enlargement is not a risk, but a source of strength.
The EU history confirms that the previous waves of enlargement in 2004 and 2007 contributed to a 30% increase in GDP per capita in the new member states compared to the alternative scenario without accession. At the same time, per capita incomes in the "old Europe" grew by 10%, reflecting the economies of scale generated by the single market. This is directly evidenced by the results of a recent IMF study. Poland, which was considered a risk, has become a growth engine - today its GDP per capita exceeds 80% of the EU average.
This confirms the fact that deeper integration into the EU has benefited everyone without exception. The new member states have enjoyed a jump in living standards, while "core Europe" has seen tangible growth thanks to the expansion of the single market.
Indeed, Ukraine’s accession to the EU does not come without a cost. However, the European Policy Centre estimates that Ukraine's integration will cost only 0.07-0.09% of EU GDP per year.
The cost of integration can be offset by using the immobilized assets of the aggressor state to support Ukraine’s reconstruction. This is not only economically feasible, but also morally justified and legally grounded. The one responsible for the destruction must pay the price.
With EU budgets being tight, this approach helps to reduce the burden on taxpayers while ensuring that the recovery is sustainable.
The third point is that integration is a prerequisite for reducing geopolitical risks.
The experience of the Baltic countries proves that joining the EU and NATO reduces risks, not the other way around. IMF data show that candidate status reduces sovereign premiums by about 200 basis points, as markets view integration as a stabilizing factor.
Involving Ukraine will allow the EU itself to better manage these risks through the exchange of experience, digital and energy integration, and the use of Ukraine's potential.
Ukraine's military assets are worth a separate mentioning. I propose we view them as a contribution to the EU’s collective defense capacity. Europe’s potential costs could be reduced through support from Ukraine’s defense resources, since today the most combat-ready army in Europe is the Ukrainian one.
Europe will be stronger and more capable with Ukraine. Without Ukraine, it will be weaker.
This is not only recognized by the military but increasingly by economists and central bankers as well. Olli Rehn, Governor of the Bank of Finland, recently emphasized in his speech: "Supporting Ukraine and reinforcing European defence is imperative for the security of the whole of Europe."
The war has demonstrated that security is not simply an expense. It is an invaluable public good. It is a prerequisite for sustainable development. I can hardly find better words than those of Madame Lagarde in her speech in Berlin: "Europe must ensure it has a solid and credible geopolitical foundation by maintaining a steadfast commitment to open trade and underpinning it with security capabilities."
Madame Lagarde calls for united efforts to build military and defense capacity within the framework of strengthening the euro’s global role.
I would like to expand on this idea: the possibilities of achieving this goal are not obvious without the integration of the most capable force in Europe - the Ukrainian army.
Fourth, Europe should not fear competition from Ukrainian companies. On the contrary, it should encourage it.
One of the key conclusions of Mario Draghi’s report is that the EU needs to update its internal rules of the game, particularly by strengthening the competition to stimulate productivity and innovation.
Instead, market fragmentation, regulatory barriers, and weak competition are holding back the potential of European businesses. This prevents the creation of European "champions" capable of competing globally.
To achieve greater autonomy and influence, Europe must make a genuine breakthrough in developing the single market, with a focus on bolstering competition in digital technologies, energy, finance, and defense. This comes from another important report by Enrico Letta.
These conclusions are already on the surface. They directly contradict the fears of some EU countries about competition from Ukrainian producers. In fact, this competition is a chance for the EU to strengthen its economy, increase productivity, and move closer to its own strategic goals. This is the key to the EU's strategic autonomy.
What is more, Ukrainian businesses that were forged in conditions of war and harsh adaptation represent relevant examples for making qualitative updates to EU approaches. They will encourage old economies to rethink issues of efficiency, speed, and flexibility. This is also a prerequisite for development.
I would also add that the structure of Ukrainian exports is quite complementary to the EU.
In the agricultural sector, it’s feed and grains, not wine, cheese, or olive oil.
In the field of machine building, it’s components for the European automotive industry, and going forward, it’s military technology products that are currently at the forefront of innovative development.
In the IT sector, it’s high-quality services that will make European companies more competitive in the global market.
Lessons from previous waves of enlargement show that adaptation through transitional periods and other tools works. So, should a united Europe be afraid of producers from Ukraine?
And another important issue is food security. It’s one of the key factors behind price stability (especially since 2021 in the EU). Ukraine’s agricultural potential can serve as Europe’s insurance against climate shocks and geopolitical blockades.
Competition is what the EU needs to become more efficient. Ukraine is a catalyst for this process.
Talking point five: Ukraine’s integration into the EU will not trigger a new wave of migration.
Migration processes are a sensitive issue for Europe today. And a politically charged one.
Ukraine’s labor market could indeed have posed significant risks to European labor markets. However, Ukrainian migrants, including forced ones, are already – even before an official accession to the EU – significantly integrated into the EU’s labor market, and their contribution to GDP and social systems is substantial.
According to a study recently published by the UNCHR, the net contribution of Ukrainians to Poland’s GDP in 2024 reached 2.7%, while the employment rate rose to 67% from 61%.
Moreover, in many EU countries, Ukrainian migrants have already paid more in taxes than they have received in aid. If we scale this example up, Ukraine’s accession to the EU will create additional budgetary space by increasing the scale of the EU’s economy.
Our shared task is to create conditions for circular migration, the return of Ukrainians home, and stabilization. And Ukraine’s accession to the EU is not a trigger for migration, but a tool for balancing it.
The experience of the Baltic States and Poland shows that 25–30% of migrants return within five to seven years after stabilization.
Finally, the sixth point: greater alignment on financial regulation between the EU and Ukraine will strengthen the development of Europe’s entire financial sector.
Ukraine has significant potential for the development of financial services and the capital market. Although financial depth in Ukraine remains low, this creates a substantial opportunity - to mobilize savings, develop insurance and pension systems, and attract investment capital. At the same time, the financial sector plays a vital role in Ukraine’s sustainable recovery, defense funding, and long-term development efforts.
We’re stating the obvious: the financial sector of Ukraine is flexible, innovative, profitable, and customer-oriented. Market participants not only are able to meet customer needs, but also have learned to overcome unprecedented challenges and adapt. The increase in European presence in Ukraine and, accordingly, familiarity with Ukrainian practices is an impetus for improving financial services in the EU itself.
Of course, integration does not mean the technical implementation of every provision of acquis communautaire. Fully implementing EU legislation is a significant challenge for any candidate country, and even more so in our context.
It is like chasing a moving target - one that not only keeps moving but also frequently changes pace, direction, and even destination. As the EU’s regulatory landscape evolves, it is essential that both sides move toward each other in a spirit of mutual commitment. And again, let me remind you of Mario Draghi's report, which implies that Europe needs not only regulation, but also reducing the regulatory burden to strengthen competitiveness. Ukraine is exactly the case where we can create a win-win again.
Regulation is not dogmatism, but a clever architecture that must be calibrated with smart regulations. In some cases, a minimum of regulation is sufficient, but in every case, decisions should be reasonable. This is exactly what Europe is striving for today, and what Ukraine aspires to.
This is the new space for joined-up actions.
Allow me to conclude my speech by citing Jean Monnet, who passionately desired a large-scale European unification – political, military, and economic. He said, "Europe will be forged in crises, and will be the sum of the solutions adopted for those crises.
Today is the time for such solutions. And Ukraine’s integration into the EU is one of them.
Ukraine’s integration is not a matter of charity. It’s a matter of strategy.
It’s not a concession. It’s reinforcement.
We are not asking for privileges. We gratefully and respectfully seek a comprehensive partnership.
We are not demanding that the rules be changed. We affirm our readiness to align, while reminding that the rules must serve Europe’s stability, development, strength, dignity, and values.
This is our goal and our reality. And yes, this is a point where history accelerates.
And those who are ready to act are the ones who shape the future.
Ukraine is an answer, not a question.
Thank you for your attention!
Glory to Ukraine!