The Institute of World Economy of Kiel University released a study showing that military support for Ukraine for Germany in the current conditions is the most profitable option from an economic point of view.
The study’s authors contradict voices that have increasingly called in recent weeks to reduce or even end military support for Ukraine.
The arguments of the authors Johannes Binder and Moritz Schularik are as follows:
- If Russia wins, Germany will face an influx of refugees from Ukraine, which will lead to huge additional costs.
- If Russia wins, Germany will have to increase its own security spending in Europe.
- A Russian victory would hurt trade and Germany would lose its direct investment in Ukraine.
Since the start of Russia’s full-scale invasion in February 2022, Berlin has provided 10.6 billion euros in military aid to Kyiv. If Ukraine is defeated, Germany could lose 10 or even 20 times more.
From an economic point of view alone, if we ignore political and humanitarian reasons, it is in Germany’s interest to provide more military assistance to Ukraine, since this is ultimately a cheaper alternative for us, says Johannes Binder, researcher at IfW Kiel and co-author of the Kiel analytical note. What is the cost of not supporting Ukraine?
So far, Germany’s spending on assistance to Ukraine as a percentage of GDP per capita is one of the lowest in Europe.
We estimate that the cost to Germany in the event of a Russian victory would be about 10 times higher than what we currently provide in military aid,” says Moritz Schularik, president of IfW Kiel and co-author of the study.
The authors of the Kiel study believe that, from an economic point of view, Moscow can be persuaded to begin serious peace negotiations only if the regime has no chance of military victory and can no longer speculate on the depletion of Ukraine or the end of Western support.
Source: Racurs
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.