Source: http://bunews.com.ua/

Germany is Ukraine’s No. 2 investor but cooperation remains below capacity due to difficult business climate

With a total of around seven billion euros and counting, Germany is currently the No. 2 international investor in independent Ukraine. The most important sectors of this economic cooperation are trade and finance, the car component industry, the construction materials industry, and logistics. Providing many thousands of jobs, German companies are a significant source of employment throughout the Ukrainian economy. Because of its advantageous location and proximity to the EU, Ukraine is a particularly interesting place for German companies to do business: business trips can be easily scheduled to last a single day if necessary, while short delivery routes make integration in cross-border production cycles easier. Entrepreneurs from the eastern part of Germany often enjoy a strong personal connection to the region and a familiarity with local business culture. In turn, industrial equipment from Germany enjoys a good reputation in Ukraine. However, despite this glowing initial overview it must be noted that in comparison to other locations in Eastern Europe the amount of German investment in Ukraine is still relatively low and has not lived up to the potential of the two countries’ bilateral economic relations. The reasons for this are well known: political instability, bureaucratic hurdles, legal uncertainties, and corruption are the main impediments to greater German investment just as their serve as barriers to the rest of the broader international community. German investors all too often complain of getting the impression that Ukraine loves the investments but not the investors. (more…)