Location: EU

Georgia’s SME Digitalization Lags Behind EU Despite IT Growth

Digital transformation is reshaping how businesses worldwide operate, yet SME digitalization in Georgia continues to lag despite strong IT sector growth. Many small and medium-sized firms struggle to adopt key digital tools like ERP, CRM, AI, and e-commerce. This raises questions about whether Georgia’s growing tech industry is truly driving digital progress across the wider economy. A new ISET Policy Institute study tracks SME digitalization from 2020 to 2024, comparing Georgia’s progress with EU benchmarks to reveal key gaps and opportunities for growth.

Why SME Digitalization in Georgia Matters

Across advanced economies, digital technologies fuel productivity and national growth. Investments in ICT, automation, and innovation enhance resilience and efficiency. Studies show that firms using e-commerce, digital payments, and remote work tools recover faster from disruptions and perform better overall. Yet, in both the EU and Georgia, smaller firms lag far behind large enterprises in adopting advanced technologies such as ERP, CRM, and AI. Bridging this divide is central to both the EU’s 2030 Digital Decade goals and Georgia’s economic modernization efforts.

How Georgia Compares to the EU

While EU SMEs steadily embrace digital tools, Georgia trails in both basic and advanced tech.

  • Only 50% of Georgian SMEs have broadband speeds of at least 30 Mbps, compared to 89% in the EU.
  • Just 7% of Georgian SMEs have websites with advanced features, versus 78% of EU firms.
  • Adoption of ERP, CRM, and AI systems remains minimal among Georgian SMEs.

Key Findings from the ISET Study

  • In 2024, only 6–7% of small firms used ERP and 3% used CRM, compared to 68% and 41% among large firms.
  • AI use was just 2% for small firms versus 20% for large ones.
  • Georgian SMEs lag EU peers in ERP (7% vs 42%), social media (30% vs 56%), and AI (2% vs 13%).
  • Only 3% of Georgian SMEs sell online, compared with 20% in the EU.

Economic Implications for Georgia

The SME digitalization gap threatens long-term productivity and export potential. Still, progress is visible. Fast broadband access for small firms rose from 33% in 2020 to 49% in 2024. Local e-transactions jumped 135% from 2020 to 2023, signaling growing online demand. Targeted support for digital skills, financing ERP/AI adoption, and simple e-commerce onboarding programs could help Georgian SMEs catch up with EU counterparts.

Meet the Researchers

  • Ana Burduli: ISET Policy Institute. 
  • Zizi Galustashvili: ISET Policy Institute. 
  • Giorgi Papava: ISET Policy Institute.

Read the Full Report

Read the full report on the ISET Policy Institute websiteto explore the complete findings. Explore more policy briefs on economic growth and development on the FREE Network website.

EU Adopts 18th Sanctions Package Against Russia to Cut War Funding

The European Union has adopted its 18th sanctions package against Russia, marking one of the toughest measures since the start of the war in Ukraine. The new package targets Russia’s oil revenues, banking system, and trade routes that have been used to bypass earlier restrictions. Slovakia had initially blocked the move but lifted its veto after negotiations. The authors of the package described it as crucial to closing loopholes and weakening Russia’s wartime economy.

Why the EU Tightened Sanctions?

Russia has repeatedly adapted to previous sanctions by finding new trade partners and exploiting loopholes. As a result, the EU introduced the 18th sanctions package against Russia to strengthen enforcement rather than create entirely new bans. Sanctions are part of a constant economic battle, with the EU closing gaps as Russia discovers new ways to evade them.

What are the Main Goals of the New Package?

The 18th sanctions package focuses on reducing Russia’s energy income and financial resources. It aims to block the shadow fleet of tankers, target Russian banks, and restrict access to military technology.

What are the New Measures of the 18th Sanctions Package?

  • The oil price cap has been lowered to about $47.6 per barrel, with dynamic adjustments.
  • Imports of refined oil made from Russian crude in third countries are now banned.
  • Twenty-two more Russian banks face transaction bans, including those linked to Nord Stream projects.
  • Over 105 new vessels were blacklisted, bringing the “shadow fleet” count to more than 400.
  • Export restrictions on military-use technology have been tightened.
  • Sanctions now extend to third-country actors helping Russia evade restrictions.
  • New limits on liquefied natural gas (LNG) aim to reduce Russia’s long-term energy revenues.

Why These Measures Matter?

The 18th sanctions package against Russia is not just about new bans; it is about ensuring old rules work. Energy is still Russia’s biggest source of money, and cutting this income weakens its ability to fund the war. However, Russia has proven resilient by redirecting oil exports to Asia, relying on smuggling networks, and depleting its National Wealth Fund to cover deficits.

To learn more about the 18th sanctions package, how Russia is adapting, what tools the EU has left, how well the EU is responding to Russian countermeasures, and how long Russia can hold out, visit the Sanctions Hub—a website that collects data and insights on sanctions against Russia and its economic retaliation (read more).

To learn more about Western sanctions and Russia’s countermeasures, visit the Sanctions Timeline. And for details on sanctions imposed on Russia and their effects, see the Evidence Base section of the sanctions portal.

European Security Needs Ukraine’s Lessons to Deter Russia

German army soldiers boarding military helicopters during field operations, highlighting their role in strengthening European security.

Russia’s full-scale invasion of Ukraine has shattered Europe’s long-held belief in lasting peace. The continent now faces its most serious security crisis since World War II. In response, Ukraine’s battlefield-tested innovations offer a powerful blueprint for a stronger and more resilient European defense system.

In their latest report, Rethinking European Security in the Face of the Russian Threat,” authors from the KSE Institute, Olena Bilousova, Pavlo Shkurenko, Kateryna Olkhovyk, Elina Ribakova, and Lucas Risinger, outline how Europe can integrate Ukraine into its defense strategy to build lasting protection and deterrence against future aggression.

Europe’s Wake-Up Call on Security

For decades, Europe’s defense relied heavily on U.S. military power. But with Washington’s commitment increasingly uncertain, European nations must prepare to defend themselves. Years of underinvestment have left defense industries underdeveloped and ammunition stockpiles dangerously low.

Meanwhile, Russia continues to expand its military capabilities well beyond the war in Ukraine. This shifting landscape makes Ukraine’s role, both as a frontline defender and a hub of defense innovation, indispensable to Europe’s long-term security.

How Ukraine Became a Model for European Defense

For over three years, Ukraine has resisted a larger, nuclear-armed aggressor through speed, adaptability, and rapid technological innovation. From AI-driven battlefield systems to anti-drone warfare, Ukraine demonstrates how creativity and decentralization can offset limited resources.

Europe can learn from Ukraine’s experience to modernize its own defense systems and close existing capability gaps.

Key Research Insights

  • Combat-tested technologies: Ukraine’s AI-based DELTA systems and digital command tools provide models for next-generation European defense.
  • Cost-effective innovation: Interceptor drones and low-cost countermeasures can neutralize expensive Russian weapons at scale.
  • Decentralized procurement: Streamlined processes speed up the delivery of critical battlefield tools and reduce bureaucratic delays.
  • Strategic integration: Including Ukraine in European defense programs enhances deterrence and joint security across the continent.

Building a Future-Ready European Defense

The report calls for full integration of Ukraine into Europe’s defense ecosystem — from procurement and research to industrial planning. This includes:

  • Granting Ukraine access to EU defense funds
  • Embedding Ukrainian military expertise in European training programs
  • Co-producing weapons and defense technologies

Such integration would not only bolster European security but also make rearmament faster, more affordable, and more coordinated across the EU and its partners.

Meet the Researchers

  • Olena Bilousova: KSE Institute
  • Pavlo Shkurenko: KSE Institute
  • Kateryna Olkhovyk: KSE Institute
  • Elina Ribakova: KSE Institute
  • Lucas Risinger: KSE Institute

Read the Full Report

Explore the complete findings and recommendations in the full report on the KSE Institute website. You can also explore more policy briefs covering conflict and sanctions in the FREE Network’s policy briefs section.

Inequality in Europe: The Role of EU Enlargement

European Union flag outside the European Parliament building, symbolizing political and economic unity amid ongoing discussions about inequality in Europe.

A new study reveals that the 2004 enlargement of the European Union helped narrow inequality in Europe. Using data from the World Inequality Database, researchers found that Eastern European countries joining the EU saw strong income growth across all income groups. This growth reduced inequality across the bloc, even though some countries experienced rising gaps internally. The study was conducted by Jesper Roine of the Stockholm School of Economics and Svante Strömberg of Uppsala University.

The Divide Before Enlargement

Before 2004, inequality in Europe reflected a clear divide between richer northern and poorer southern nations. Eastern European countries outside the EU were still adjusting to the post-communist era, facing both rapid economic changes and widening income gaps.

How Enlargement Shifted the Balance

The 2004 expansion brought ten mainly Eastern European states into the EU. These countries experienced rapid income growth that reached both rich and poor households. In contrast, many older member states—especially in Southern Europe—saw stagnating or shrinking incomes for lower- and middle-income earners.

Key Research Findings

  • New Eastern European members saw faster income growth than older EU states across all income levels.
  • The poorest 50% of the EU population enjoyed annual growth three times higher than the top 10%.
  • Many income groups in Southern Europe lost ground in the EU-wide income rankings.
  • Overall inequality in Europe fell after enlargement, despite mixed trends within individual countries.

Implications for Future Growth

The findings suggest that future EU expansions—such as the possible accession of Ukraine, Moldova, and Georgia—could also reduce inequality in Europe if new members experience inclusive growth. However, continued stagnation in older members could deepen political divides.

Read the Full Peer-Reviewed Research Paper 

Explore the complete findings and analysis by reading the full report in the International Tax and Public Finance journal.

A Potential Broadening of the Excise Tax on Food Products High in Sugar and Salt: The Case of Latvia

Woman holding a burger with fried chicken, donuts, and sugary foods – concept image for excise tax on sugar and salt.

Overweight and obesity are significant public health issues, contributing to various chronic diseases such as cardiovascular diseases, diabetes, and certain cancers. Latvia’s second-highest share of overweight adults in the EU is a compelling reason for public health measures. These should aim to discourage excessive consumption of high-calorie foods and beverages. Excise tax is one of the tools in a complex approach to encourage a balanced diet and promote positive health outcomes. Motivated by evidence from Hungary, currently the only country in Europe imposing a tax on pre-packaged food products high in sugar and salt, we simulate the short-term impact of the introduction of a differentiated broad-based tax on food products in Latvia. We conclude that to influence consumer behaviour, price increases should be at least 10 percent, which implies introducing tax rates that are at least 1.5 times higher than those in Hungary.

Extremely High Overweight and Obesity Rates in Latvia

Overweight and obesity are serious public health challenges across Europe. Together with an unbalanced diet and low physical activity they contribute to many non-communicable diseases (NCDs), including heart diseases, diabetes and certain cancers (WHO, 2022). For many individuals, being overweight is also linked to psychological problems.

Overweight and obesity rates are extremely high in all EU countries. In 2022, more than half of all adults in the EU (51.3 percent) were overweight (including pre-obese and obese). Latvia has the 2nd highest rate of overweight adults in the EU (60.4 percent). This puts significant pressure on Latvia’s health care system and social resources.

Recognizing that overweight and obesity has multifactorial causes, a comprehensive approach is required to effectively tackle this problem, involving experts from various fields and addressing the issue from multiple angles.

One potential tool in a complex approach is an excise tax on foods and drinks high in sugar and salt since excessive consumption of such foods and drinks represents a major risk factor for NCDs (WHO, 2015a). Such a tax could help to reduce excessive consumption, encourage healthier eating, and improve public health outcomes.

The Intake of Added Sugars

According to data from the EFSA Panel on Nutrition, Novel Foods and Food Alergens (EFSA, 2022), the main source of added sugar intake in almost all European countries is sugar and confectionery. The numbers for adults (18–64 years) range from 20 percent in Austria to 57 percent in Italy (48 percent in Latvia). For children aged 1–18 years, sugar and confectionary contribute to 36 – 44 percent of added sugar intake in Latvia.

In Latvia, other key sources of added sugar are fine bakery wares, processed fruits, and vegetables. The contribution of sweetened soft and fruit drinks to total added sugar intake is only 8 percent for adults (18–64 years) and 3–7 percent for children (1–18 years).

Excise Tax on Soft Drinks

As of 2024, 14 European countries have implemented taxes on sugar-sweetened soft drinks. In Latvia, the tax was introduced in 1999 and was mainly motivated by the financial needs of the state budget.

The evidence from international case studies (WHO, 2023) shows that taxes on sugar-sweetened soft drinks can be effective in reducing consumption in the short term, particularly when the tax leads to significant price increases that reduce affordability. However, the overall evidence on whether these taxes successfully reduce sugar intake is inconclusive. In a review by the New Zealand Institute of Economic Research (NZIER, 2017), the authors conclude that methodologically robust studies  show only small reductions in sugar intake, too small to produce significant health benefits, and easily offset if consumers switch to other high-calorie products. On the other hand, studies reporting a meaningful change in sugar intake often assume no compensatory substitution. At the same time, experience from Hungary suggests that a sugar tax imposed on a wide range of products is effective in reducing the overall consumption of products subject to the tax, and in encouraging healthier consumption habits. The impact assessment conducted 3 years after the introduction of the tax in Hungary showed that consumers of unhealthy food products responded to the tax by choosing a cheaper, often healthier product (7–16 percent of those surveyed), consuming less of the unhealthy product (5–16 percent), switching to another brand of the product (5–11 percent), or substituting it with another food item – often a healthier alternative (WHO, 2015b).

The Short-term Effect of a Broad-Based Excise Tax in Latvia

Approach

Motivated by the evidence from Hungary, we simulate the short-term impact of the introduction of a similar differentiated broad-based tax on food products high in sugar and salt using the approach applied in Pļuta et. al (2020). First, we use AC Nielsen monthly data from 2019 to 2023 on sales volume and prices of pre-packaged food products of selected categories in the modern trade retail market to estimate the price elasticity of demand for these products. The selected product categories included:

  • Pre-packaged sweetened products (e.g., breakfast cereals, cacao, chocolate bars, soft and hard candies, sweet biscuits, etc.)
  • Sweetened dairy products (e.g., ice cream, yoghurt, condensed milk, curd countlines, etc.)
  • Salted snacks (salted nuts, salted biscuits, etc.)
  • Ready-to-eat and instant foods (e.g., pizza cooled and frozen, frozen dumplings, vegetables and canned beans, etc.)
  • Condiments (e.g., dehydrated instant and cooking culinary, dehydrated sauces and seasonings, dressings, ketchup, mayonnaise, etc.)

Second, we simulate different scenarios to assess the increase in price, reduction in sales and budgetary effect using the estimated elasticities and assuming different degrees of tax pass-through rate to retail prices (100 and 50 percent, respectively). Our results represent a short-term or direct fiscal effect, meaning we do not account for any second-round effects that may arise due to changes in domestic production and employment, which could in turn generate additional tax revenues.

The Tax Object and Rates

In defining the scenarios to be considered when modelling the potential broadening of the tax base, we use the Hungarian Public Health Product Tax (PHPT) as a practice example. As a basis, we use the list of product categories under taxation by the PHPT, the two-tier tax system and the PHPT rates as of 2024. In addition, we are also looking at other product categories (such as sugar sweetened dairy products, sweetened cereals and vegetables and beans containered), expanding the tax base even more. In total, we simulated four scenarios for taxing the food products high in sugar and salt. The scenarios consider a two-tier tax system, meaning products with lower sugar or salt content are taxed at a lower rate, while those with higher content face a higher tax. For condiments, only a high rate is applied due to the, usually high, salt content. A differentiated tax rate is expected to stimulate the industry to drive down sugar and salt content in their products, i.e., offering sugar and salt-reduced options. The scenarios differ from each other in the applicable rates.

  • Scenario 1: Uses the same tax rates as Latvia’s excise tax on non-alcoholic beverages (as of March 2024) – EUR 7.40 per 100 kg (low rate) and EUR 17.50 per 100 kg (high rate).
  • Scenario 2: Uses Hungary’s PHPT rates – in the general case, the low rate is EUR 17 per 100 kg, and the high rate is EUR 54 per 100 kg.
  • Scenario 3: Sets rates 1.5 times higher than Hungary’s rates.
  • Scenario 4: Doubles Hungary’s rates.

Assumptions

Unfortunately, the retail price and sales time series used in the analysis are not disaggregated into groups according to the sugar and salt content in the product. As a result, we apply assumptions to estimate the potential range of tax impacts.

To calculate the lower bound of the expected impact, we assume that 100 percent of sales in each product category are subject to the new sugar and salt tax, but all products have low sugar and salt content and therefore qualify for the lower tax rate.

To calculate the upper bound, we assume that 25 percent of the sales volume is taxed at the lower rate (due to low sugar and salt content), while the remaining 75 percent of sales are taxed at the higher rate, reflecting higher sugar and salt levels in those products.

Results

According to our estimations, the application of an excise tax on food products high in sugar and salt could lead to a price increase and sales decrease of taxed food products. The magnitude would depend on the type of food product (i.e., average retail price in the country) and scenario assumed (i.e., tax rates). Within each single scenario, the largest impact is expected for condiments. This is because we simulate only the high tax rate applied to them (not a two-tier system), as is the case in Hungary. The tax makes up a larger share of their price, and due to high price sensitivity, the decrease in sales is also greater.

Based on previous research, we conclude that price increases need to reach at least 10 percent to meaningfully influence consumer behaviour. This level of change is achieved in Scenario 3, which assumes tax rates 1.5 times higher than those used in Hungary.

Below we present the obtained estimations under Scenario 3.  The estimates for Scenarios 1 and 2 are not included here because the price increase caused by the tax does not reach 10 percent for several product categories. Under Scenario 4 the price changes could exceed 10 percent but this scenario may also provide stronger incentives for manufacturers to reformulate their products (and in this case, the average price increase within a given product category will be lower). The results for Scenario 4 are available in a recent BICEPS report (Pļuta et al., 2024).

Under Scenario 3, with full tax pass-through (100 percent), the estimated reduction in sales volume is:

  • 3.0–8.1 percent for pre-packaged sweetened products;
  • 3.6–17.1 percent for sweetened dairy products;
  • 0.9–4.7 percent for salted snacks;
  • 10.4–54.1 percent for ready-to-eat and instant foods;
  • 11.0–11.8 percent for condiments.

If only 50 percent of the tax is passed through to retail prices, the sales reductions would be approximately half as big.

The estimated revenue from the excise tax in this scenario would range between EUR 15.0 million and EUR 54.9 million. The resulting change in VAT revenue would range from a loss of EUR 0.7 million to a gain of EUR 1.1 million.

Conclusion

Although overweight and obesity rates are extremely high in all EU countries, Latvia, in 2022, had the second highest rate in the EU. In this brief, we explore the use of the excise tax as one of the tools in a complex approach to discourage excessive consumption of foods and beverages high in sugar and salt and encourage a balanced diet and promote positive health outcomes. Based on findings from previous studies, a price increase of at least 10 percent is needed to influence consumer behaviour. In Latvia, this would require tax rates approximately 1.5 times higher than those applied in Hungary, i.e. in the general case equal to EUR 25.5 (low rate) and EUR 81 (high rate) per 100 kg of product. Under such a scenario, the estimated revenue from the tax could range from EUR 15.0 to 54.9 million. For comparison, in 2024, Latvia’s excise tax on soft drinks generated EUR 15.6 million. To remain effective, tax rates should be adjusted over time in line with growth in disposable income.

Acknowledgement

This brief is based on a study Taxation of the non-alcoholic beverages with excise tax in the Baltic countries. Potential broadening of the tax base to food products high in sugar and salt completed by BICEPS researchers in 2024 (Pļuta et al., 2024). The study was commissioned by VA Government. It was developed independently and reflects only the views of the authors.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

From Integration to Reconstruction: Standing with Ukraine by Supporting Ukrainians in Sweden

People gathered in Sweden showing solidarity and supporting Ukrainians with national flags.

Sweden has strongly supported Ukraine through both public opinion and government actions, yet there has been little discussion about the needs of Ukrainian displaced people in Sweden. The ongoing war and the rapidly shifting geopolitical landscape have created uncertainty – geopolitical, institutional, and individual. Ukrainian displaced people in Sweden face an unclear future regarding their rights, long-term status, and opportunities, making future planning or investing in relevant skills difficult. This uncertainty also weakens the effectiveness of integration policies and limits the range of policy tools that can be deployed, which hinders participation in the labor market, affecting both displaced and employers. Addressing these challenges is essential, not only for the well-being of Ukrainians in Sweden, but also for Sweden’s broader role in supporting Ukraine. Helping displaced Ukrainians rebuild their lives also strengthens their ability to contribute both to Swedish society and to Ukraine’s future reconstruction and integration into Europe.

The Swedish Approach to Displaced Ukrainians

In response to the Russian full-scale invasion of Ukraine, the Temporary Protection Directive (2001/55/EC) (commonly referred to as collective temporary protection) was activated in March 2022, granting Ukrainians seeking refuge temporary protection in EU countries, including Sweden. This directive provides residence permits, access to work, education, and limited social benefits without requiring individuals to go through the standard asylum process.

However, the practicalities of the Directive’s use differed significantly between countries. Sweden, despite its, until recent, reputation of being relatively liberal in its migration policies, has at times, lagged behind its Scandinavian neighbors in supporting Ukrainian displaced people. To illustrate this, it is useful to compare the Swedish approach to that of other Nordic states, as well as Poland.

Comparison to Other Nordic States

The Nordic countries have implemented the directive in different ways, adopting varying policies toward Ukrainians demonstrating different degrees of flexibility and support. Despite its generally restrictive immigration policy, Denmark introduced some housing and self-settlement policies for Ukrainians that were more liberal than its usual approach. Norway also initially introduced liberal measures but later tightened regulations, banning temporary visits to Ukraine and reducing financial benefits. Finland, meanwhile, has taken a relatively proactive stance, granting temporary protection to over 64,000 Ukrainians – one of the highest per capita rates in the region. Its strong intake reflects a more flexible and effective implementation of the directive, particularly from late 2022, when it surpassed Sweden and Denmark in number of arrivals.

In Sweden the so-called “massflyktsdirektivet“ grants Ukrainians temporary protection until at least March 2025. Its future beyond that, however, remains uncertain, adding to the challenges faced by refugees and policymakers alike. Sweden – considered liberal in migration policies (at least, up until 2016) – has been criticized for offering limited rights and financial support to displaced Ukrainians, making it one of the least attractive destinations among the Nordic countries (Hernes & Danielsen, 2024). Under “massflyktsdirektivet”, displaced Ukrainians were entitled to lower financial benefits and limited access to healthcare compared to refugees or residents with temporary permits. It was only in July 2023 that they became eligible for Swedish language training, and only in November 2024 could they apply for residence permits under Sweden’s regular migration laws – a pathway that can eventually lead to permanent residence.

Figure 1 illustrates significant fluctuations in the number of individuals granted collective temporary protection in the Nordic countries over the first two years following Russia’s full-scale invasion. As Hernes and Danielsen (2024) show in a recent report, all Nordic countries experienced a peak in arrivals in March-April 2022, followed by a decline in May-June. Sweden initially received the most, but aside from this early peak, inflows have remained relatively low despite its larger population (Table 1). Since August 2022, Finland and Norway have generally recorded higher arrivals than Denmark and Sweden. By August 2023, Norway’s share increased significantly, accounting for over 60 percent of total Nordic arrivals between September and November 2023.

Figure 1. Total number of individuals granted collective temporary protection in the Nordic countries

Source: Hernes & Danielsen, 2024, data from Eurostat.

Table 1. Total number of registered temporary protection permits and percent of population as of December 2023

Source: Hernes & Danielsen, 2024, data from Eurostat.

Comparison to Poland

Sweden’s policies and their outcomes compare rather poorly to those of Poland, one of the European countries that received the largest influx of Ukrainian migrants due to its geographic and cultural proximity. A key factor behind Poland’s relatively better performance is that pre-existing Ukrainian communities and linguistic similarities have facilitated a smoother integration. Ukrainians themselves played a crucial role in this regard, with many volunteering in Polish schools to support Ukrainian children. Sweden also had a community of Ukrainians who arrived to the country over time, partly fleeing the 2014 annexation of Donetsk and Crimea. Since these individuals were never eligible for refugee status or integration support, they had to rely on their own efforts to settle. In doing so, they built informal networks and accumulated valuable local knowledge. Nevertheless, after the full-scale invasion in 2022, they were not recognized as a resource for integrating newly arrived Ukrainian refugees – unlike in Poland.

However, Poland’s approach was shaped not only by these favorable preconditions but also by deliberate policy choices. As described in a recent brief (Myck, Król, & Oczkowska, 2025), a key factor was the immediate legal integration of displaced Ukrainians, granting them extensive residency rights and access to social services, along with a clearer pathway to permanent residence and eventual naturalization.

Barriers to Labor Market Integration

Despite a strong unanimous support for Ukraine across the political spectrum, there is less public debate and fewer policy processes in Sweden regarding displaced Ukrainians, most likely attributable to the general shift towards more restrictive immigration policies. The immigration policy debate in Sweden has increasingly emphasized a more “selective” migration, i.e. attracting migrants based on specific criteria, such as employability, skills, or economic self-sufficiency. This makes it puzzling that displaced Ukrainians, who largely meet these standards, have not been better accommodated. Before the full-scale invasion, Sweden was a particularly attractive destination among those who wanted to migrate permanently, especially for highly educated individuals and families (Elinder et al., 2023), indicating a positive self-selection process.

When large numbers of displaced Ukrainians arrived after the full-scale invasion, many had higher education and recent work experience, which distinguished them from previous refugee waves that Sweden had received from other countries. Despite a strong labor market in 2022, their integration was hindered by restrictions imposed under the Temporary Protection Directive, which limited access to social benefits and housing. At the same time, Sweden explicitly sought to reduce its attractiveness as a destination for migrants in general, contributing to a sharp decline in its popularity among Ukrainians after the war escalated.

In addition to the restrictiveness and numerous policy shifts over time, the temporary nature of the directive governing displaced Ukrainians – rather than the standard asylum process – creates significant policy uncertainty. This uncertainty makes it difficult for Ukrainians to decide whether to invest in Sweden-specific skills or prepare for a potential return to Ukraine, whether voluntary or forced, complicating their long-term planning. It also hinders labor market integration, increasing the risk of exploitation in the informal economy. Another key challenge is the unequal distribution of rights, as entitlements vary depending on registration timelines, further exacerbating the precarious situation many displaced Ukrainians face in Sweden.

A survey of 2,800 displaced Ukrainians conducted by the Ukrainian NGO in Sweden “Hej Ukraine!” in February 2025 provides key insights into their labor market integration (Hej Ukraine!, 2025). Survey results show that, currently, 40 percent of respondents are employed, with 42 percent of them holding permanent contracts while the rest work in temporary positions and 6 percent being engaged in formal studies. Employment is concentrated in low-skilled sectors, with 26 percent working in cleaning services, 14 percent in construction, and 12 percent in hospitality and restaurants. Other notable sectors include IT (11 percent), education (8 percent), warehousing (7 percent), elderly care (5 percent), forestry (3 percent), and healthcare (3 percent). The lack of stable permits, access to language courses (until September 2024), and financial incentives for hiring displaced persons have complicated their integration.

As mentioned above, the Swedish government has over time introduced several initiatives to facilitate the integration of displaced Ukrainians. However, assessing their effectiveness is crucial to identify persistent challenges and to formulate targeted policy solutions.

The Role of the Private Sector and Civil Society

The business sector, civil society and NGOs have also played a role in supporting displaced Ukrainians, filling gaps left by the public sector. This includes initiatives aimed at creating job opportunities that encourage voluntary return. However, broader systemic support, including simplified diploma recognition and targeted re-skilling programs, is needed to enhance labor market participation.

Moreover, there is a lack of information among displaced, potential employers and public institutions (municipality level) about the tools and programs available. For example, a community sponsorship program funded by UNHCR, which demonstrated positive effects on integration by offering mentorship and support networks, was only applied by five municipalities (UNHCR, 2025). Similar programs could be expanded to address structural barriers, particularly in the labor market. Another example is the Ukrainian Professional Support Center established to help displaced Ukrainians find jobs through building networks and matching job seekers with employers (UPSC, 2024). The center was funded by the European Social Fund, and staffed to 50 percent by Ukrainian nationals, either newcomers or previously established in Sweden, to facilitate communication. Experiences from this initiative, shared during a recent roundtable discussion –  Integration and Inclusion of Ukrainian Displaced People in Sweden, highlighted that between 2022 and 2024, about 1,400 Ukrainians participated in the project, but only one-third of participants found jobs, mostly in entry-level positions in care, hospitality, and construction.  Restrictions under the temporary protection directive, along with the absence of clear mechanisms for further integration, posed significant challenges; the lack of a personal ID, bank account, and access to housing were considered major obstacles. The uncertainty of their future in Sweden was also reported as a significant source of stress for participants.

Implications and Policy Recommendations

The lack of clarity surrounding the future of the EU Temporary Protection Directive, as well as its specific implementation in Sweden, leaves displaced Ukrainians in a precarious situation. Many do not know whether they will be allowed to stay or if they should prepare for a forced return. This uncertainty discourages long-term investment in skills, housing, and integration efforts.

Uncertainty also affects Swedish institutions, making it difficult to implement long-term policies that effectively integrate Ukrainians into society. To address these issues, the following policy recommendations are proposed.

  • Extend Temporary Protection Status Beyond 2025: Clear guidelines on the duration of protection are necessary to provide stability for displaced Ukrainians
  • Improve Labor Market Access: Introduce targeted programs for skill recognition, language training, and financial incentives for businesses hiring displaced Ukrainians
  • Enhance Civil Society and Private Sector Collaboration: Support mentorship and community sponsorship programs that facilitate integration
  • Acknowledge and Utilize displaced Ukrainians as a Resource: Recognizing displaced Ukrainians as potential assets in rebuilding Ukraine and strengthening European ties should be a priority.
  • Increase Public and Policy Debate: There is a need for greater discussion on how to integrate Ukrainians in Sweden, as an important complement to the policy priority of providing aid to Ukraine.

By implementing these measures, Sweden can provide displaced Ukrainians with greater stability, enabling them to engage in the formal labour market rather than being pushed into informal or precarious employment. This not only benefits Ukrainians by ensuring fair wages and legal protection, but also strengthens Sweden’s economy through increased tax revenues and a more sustainable labour force.

As Sweden continues to support Ukraine in its fight for sovereignty, it should also recognize the value of displaced Ukrainians within its borders, fostering their contribution to both Swedish society and Ukraine’s eventual reconstruction.

References

  • Hernes, V., & Danielsen, Å. Ø. (2024). Reception and integration policies for displaced persons from Ukraine in the Nordic countries – A comparative analysis. NIBR Policy Brief 2024:01. https://oda.oslom et.no/oda-xmlui/handle/11250/3125012
  • Hej Ukraine! (2025). Telegram channel. https://t.me/hejukrainechat
  • Elinder, M., Erixson, O., & Hammar, O. (2023). Where Would Ukrainian Refugees Go if They Could Go Anywhere? International Migration Review, 57(2), 587-602. https://doi.org/10.1177/01979183221131559
  • EUROSTAT. Decisions granting temporary protection by citizenship, age and sex – monthly data. Dataset. https://ec.europa.eu/eurostat/databrowser/view/migr_asytpfm__custom_15634298/default/map?lang=en
  • Myck, M., Król, A., & Oczkowska, M. (2025, February 21). Three years on – Ukrainians in Poland after Russia’s 2022 invasion. FREE Policy Brief. Centre for Economic Analysis (CenEA). https://freepolicybriefs.org/2025/02/21/ukrainians-in-poland/
  • Ukrainian Professional Support Center (UPSC). (2024). https://professionalcenter.se/omoss/
  • United Nations High Commissioner for Refugees (UNHCR). (2025). Community sponsorship. UNHCR Northern Europe. Retrieved [March 6, 2025] from https://www.unhcr.org/neu/list/our-work/community-sponsorship

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Human Capital Loss Among Belarusian and Ukrainian Migrants to the EU

Silhouettes of construction workers on scaffolding at sunset, symbolizing underemployment among human capital migrants in the EU.

This policy brief examines the underutilization of human capital among involuntary migrants from Ukraine and Belarus in Poland and Lithuania. Focusing on those who migrated after 2020 (Belarus) and 2022 (Ukraine), the brief investigates the factors influencing the conversion of their pre-migration skills into gainful employment in their host countries. Our findings show that despite many migrants possessing high levels of education and professional qualifications, structural barriers and low convertibility of their skills, hinder their full labor market integration. This skill underutilization not only limits migrants’ professional growth and earning potential but also deprives the host countries of valuable skills and potential economic gains.

Effective labor market integration substantially benefits both host and sending countries and migrants themselves. For host nations, successful integration can alleviate critical skill shortages, boost productivity, and drive economic growth (Boubtane, Dumont, & Rault, 2016; Boubtane, 2019; Engler, Giesing, & Kraehnert, 2023; Bernstein et al., 2022). Conversely, inadequate integration leads to underemployment, diminished potential, and economic inefficiency. Countries of origin can benefit from remittances, the return of migrants with enhanced skills, and strengthened international economic ties. However, poor integration risks an uncompensated “brain drain” (Reinhold & Thom, 2009; Barrett & O’Connell, 2001; Iara, 2006; Barrett & Goggin, 2010; Co, Gang, & Yun, 2000). For migrants, the ability to continue their careers means higher earnings and less stress from the acquisition of a new profession, while the non-utilization of existing skills results in their depreciation, potentially causing permanent wage reductions even upon return to the home country (Bowman & Myers, 1967).

Migrants can be broadly categorized into voluntary migrants or forced migrants. Voluntary migrants assess labor market prospects beforehand and often possess convertible human capital – one that can be used in a new labor market. This group often includes professionals like IT specialists and scientists and those in low-skilled but highly transferable professions. Forced migrants, on the contrary, may be utterly unprepared for changes in jurisdiction and possess skills of limited transferability. For example, even highly specialized professions requiring extensive training and substantial human capital, such as lawyers, officials, and teachers, often prove “non-convertible“ (Duleep & Regets, 1999). These individuals’ skills are frequently country specific.

Low convertibility of skills generates significant negative consequences. Highly educated professionals, for instance, may find themselves relegated to low-paying, unskilled jobs, unable to leverage their expertise. This hinders their professional development and deprives host countries of valuable skills and potential contributions to economic growth. Addressing these mismatches is crucial for maximizing the benefits of migration for stakeholders in both home and host countries.

Forced Migration from Belarus and Ukraine

The political crisis in Belarus, starting with the contested 2020 presidential elections, led to widespread repression and significant forced migration. Belarus’s role in supporting Russia’s 2022 invasion of Ukraine exacerbated this situation, resulting in approximately 300,000 Belarusians seeking refuge in the European Union (Eurostat). This number accounts for a substantial proportion of the country’s 9 million population and its approximately 5 million-strong labor force (Belstat).

Russia’s full-scale invasion of Ukraine triggered the most significant wave of migration in Ukrainian history, with over 6 million of the pre-war 44 million population fleeing to the EU (UNHCR). About 90 percent of the initial refugees were women and children due to a mobilization law preventing most men aged 18 to 60 from leaving (UNHCR).

Online Survey and Migrant Differences

To better understand the situation of migrants, their integration into the EU labor market, and to develop data-driven recommendations for improving their conditions, the CIVITTA agency, in partnership with BEROC, conducted an online survey in the summer of 2024. This brief is based on the survey results. The survey includes responses from 616 Ukrainian nationals who migrated to Poland or Lithuania after Russia’s full-scale invasion of Ukraine in 2022, as well as 173 Belarusian migrants who left their home country after 2020. The research focuses on individuals aged 28 to 42, providing insights into their experiences and challenges in the labor market in their host countries. While we acknowledge the sample’s limitations in terms of representativeness, we believe the findings provide valuable insights into the specific challenges faced by involuntary migrants and their adaptation strategies in the new labor market.

Key differences characterize these migration waves. Ukrainian migration comprises of more women, while Belarusian migrants show a more balanced gender distribution, with 47 percent women in our sample versus 62 percent for Ukrainians. Family separation is also notable, as 91 percent of married Belarusians live with their spouses, compared to only 75 percent of Ukrainians (due to the mobilization law).

Survey respondents from both groups possess high levels of human capital with 60 percent of Ukrainians and 90 percent of Belarusians holding higher education degrees. Among Belarusians, 94 percent had over five years of work experience before migration, with and 79 percent of Ukrainians stating the same.

Ukrainian return intentions are split: 38 percent plan to return, 19 percent will not, and the rest are undecided. An end to the war and changes in Russian foreign policy would increase return rates to 70 percent. For Belarusians, 35 percent plan to return, 38 percent will not, and the rest are undecided. Education level is key, as less-educated Belarusians are more likely to stay abroad. An end to repression would increase the share of those Belarusians who want to return to 70 percent, and a regime change would increase this percentage to 82 percent.

Factors Conditioning Human Capital Loss

As expected, due to the involuntary nature of migration of the two groups in focus, a large fraction of survey participants reported losing their profession after migration. As Figure one shows, 48 percent of Belarusians and 63 percent of Ukrainians in our sample reported full loss of their prior careers. The lower percentage of Ukrainians fully retaining their careers (23 percent) compared to Belarusians (44 percent) could be attributed to several factors, including the more recent and disruptive nature of the Russo-Ukrainian war leading to more significant displacement and challenges in finding comparable work. The higher percentage of Ukrainians starting their careers from scratch (49 percent compared to 29 percent among Belarusians) also supports this idea.

Figure 1. Preservation of careers in the EU

Source: Authors’ computations based on survey data.

To foster an evidence-based discussions on the smooth integration of migrants into the EU labor market and the prevention of human capital loss, it is crucial to examine the individual factors that influence career continuity for Belarusian and Ukrainian migrants. We therefore utilize a logistic regression model to identify key predictors that increase the likelihood of migrants remaining in their profession after relocating to Poland and Lithuania.

In our quantitative analysis, an outcome binary variable for staying in the profession is equal to 1 if an individual either “continued career started in a home country (in the same position)” or “remained in the same profession but started working in a position lower than the one held before emigration.” As predictors, we consider a set of sociodemographic variables reasonably related to the probability of staying in the profession and dummy variables for the most common spheres of employment (see Table 1).

Table 1. Overview of model variables

Who Maintains Their Career After Emigration?

Based on the regression coefficients in Table 2, we can identify characteristics related to losing career-specific human capital. In our regression, we control for both home and host country factors. One noteworthy finding is that, while Ukrainian migrants in our sample report significantly higher rates of career loss than Belarusian migrants, nationality itself does not emerge as a significant predictor of career loss once other characteristics are accounted for.

Our results also show that the probability of staying in a profession is higher among men, those with more extended work experience and higher income before emigration, and those who were invited to a host country by an employer. The same holds for entrepreneurs, those who do not plan to return, and those employed in the fields of Architecture & Engineering and Information and Communication Technologies.

Table 2. Results of regression analysis

Note: *** Significant at the .001 level. ** Significant at the .01 level. * Significant at the .05 level.

Conclusion

Several conclusions and policy advice can be derived from the survey results.

The higher likelihood of entrepreneurs staying in their profession suggests that supporting migrant entrepreneurship can be a valuable strategy to retain human capital. This can be done, for example, by:

  • Providing access to resources, mentorship, and funding for migrant entrepreneurs.
  • Streamlining the procedures for migrants to start and operate businesses.
  • Facilitating access to capital for migrant-owned businesses.

The research highlights the disproportionate impact of human capital loss on women.  Therefore, policies should include gender-specific programs that address women’s unique challenges in integrating into new labor markets. This could include:

  • Skills retraining and certification programs: Designed to align women’s existing skills with the demands of the host country’s labor market, with consideration for childcare needs and other barriers women may face.
  • Connecting women migrants with established professionals in their fields to facilitate knowledge transfer and career guidance.
  • Language training programs: Tailored to the specific needs of women, potentially incorporating childcare support to enable participation.

The study highlights the positive role of international companies in supporting employee relocation. Respondents who were invited by an employer demonstrated the most successful integration into the new labor market. To enhance and strengthen these networks, policies may focus on:

  • Encouraging corporations to hire and train migrant workers, potentially through tax breaks or other incentives. This could include partnerships with migrant-serving organizations to connect companies with qualified candidates.
  • Developing digital platforms that connect migrants with diaspora networks, potential employers, and relevant resources.

In addition, policies should address the non-recognition of foreign qualifications, simplifying and expediting the procedures for recognizing foreign degrees and professional certifications. Initiatives to create targeted training programs could complement such policies and allow migrants to quickly acquire any missing skills or certifications required by the host country’s professional bodies. These policy measures would enhance the utilization of migrants’ human capital, benefiting both migrants and host countries while also supporting sending countries. This could be achieved by fostering a successful diaspora or facilitating productive reintegration in the case of return migration.

References

  • Barrett, A., & Goggin, J. (2010). Returning to the question of a wage premium for returning migrants. National Institute Economic Review, 213, R43–R51. https://doi.org/10.1177/0027950110389752
  • Barrett, A., & O’Connell, P. J. (2001). Does training generally work? The returns to in-company training. ILR Review, 54(3), 647–662. https://doi.org/10.1177/001979390105400403
  • Bernstein, S., Diamond, R., McQuade, T. J., & Pousada, B. (2022). The contribution of high-skilled immigrants to innovation in the United States (No. w30797). National Bureau of Economic Research. https://doi.org/10.3386/w30797
  • Boubtane, E. (2019). The economic effects of immigration for host countries. L’Economie politique, 84(4), 72–83. https://doi.org/10.3917/leco.084.0072
  • Boubtane, E., Dumont, J.-C., & Rault, C. (2016). Immigration and economic growth in the OECD countries 1986–2006. Oxford Economic Papers, 68(2), 340–360. https://doi.org/10.1093/oep/gpv024
  • Bowman, M. J., & Myers, R. G. (1967). Schooling, experience, and gains and losses in human capital through migration. Journal of the American Statistical Association, 62(319), 875–898. https://doi.org/10.2307/2283723
  • Co, C. Y., Gang, I. N., & Yun, M.-S. (2000). Returns to returning. Journal of Population Economics, 13, 57–79. https://doi.org/10.1007/s001480050121
  • Duleep, H. O., & Regets, M. C. (1999). Immigrants and human-capital investment. American Economic Review, 89(2), 186–191. https://doi.org/10.1257/aer.89.2.186
  • Engler, P., Giesing, Y., & Kraehnert, K. (2023). The macroeconomic effects of large immigration waves. IAB-Discussion Paper. https://doi.org/10.5167/uzh-239271
  • Iara, A. (2006). Skill diffusion in temporary migration? Returns to Western European working experience in the EU accession countries (Development Studies Working Paper No. 210). Centro Studi Luca d’Agliano. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=921492
  • Reinhold, S., & Thom, K. (2009). Temporary migration and skill upgrading: Evidence from Mexican migrants. University of Mannheim, unpublished manuscript.
  • UNHCR. (n.d.). Operational Data Portal. https://data.unhcr.org/

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Ukraine’s Fight Is Our Fight: The Need for Sustained International Commitment

A large Ukrainian flag being carried by a crowd of demonstrators in Lithuania, symbolizing Ukraine International Commitment and global solidarity against aggression.

We are at a critical juncture in the defense of Ukraine and the liberal world order. The war against Ukraine is not only a test of Europe’s resilience but also a critical moment for democratic nations to reaffirm their values through concrete action. This brief examines Western support to Ukraine in the broader context of international efforts, putting the order of magnitudes in perspective, and emphasizing the west’s superior capacity if the political will is there. Supporting Ukraine to victory is not just the morally right thing to do, but economically rational from a European perspective.

As the U.S. support to the long-term survival of Ukraine is becoming increasingly uncertain, European countries need to step up. This is a moral obligation, to help save lives in a democratic neighbor under attack from an autocratic regime. But it is also in the self-interest of European countries as the Russian regime is threatening the whole European security order. A Russian victory will embolden the Russian regime to push further, forcing European countries to dramatically increase defense spending, cause disruptions to global trade flows, and generate another wave of mass-migration. This brief builds on a recent report (Becker et al., 2025) in which we analyze current spending to support Ukraine, put that support in perspective to other recent political initiatives, and discuss alternative scenarios for the war outcome and their fiscal consequences. We argue that making sure that Ukraine wins the war is not only the morally right thing to do, but also the economically rational alternative.

The International Support to Ukraine

The total support provided to Ukraine by its coalition of Western democratic allies since the start of the full-scale invasion exceeded by October 2024 €200 billion. This assistance, which includes both financial, humanitarian, and military support, can be categorized in various ways, and its development over time can be analyzed using data compiled by the Kiel Institute for the World Economy. A summary table of their estimates of aggregate support is provided below.

A particularly relevant aspect in light of recent news is that approximately one-third of total disbursed aid has come from the United States. The U.S. has primarily contributed military assistance, accounting for roughly half of all military aid provided to Ukraine. In contrast, the European Union—comprising both EU institutions and bilateral contributions from member states—stands as the largest provider of financial support. This financial assistance is crucial for sustaining Ukraine’s societal functions and maintaining the state budget.

Table 1. International support to Ukraine, Feb 2022 – Oct 2024

Source: Trebesch et al. (2024).

Moreover, the EU has signaled a long-term commitment to provide, in the coming years, an amount comparable to what has already been given. This EU strategy ensures greater long-term stability and predictability, guaranteeing that Ukraine has reliable financial resources to sustain state operations in the years ahead. Consequently, while a potential shift in U.S. policy regarding future support could pose challenges, it would not necessarily be insurmountable.

What is crucial is that Ukraine’s allies remain adaptable, and that the broader coalition demonstrates the ability to adjust its commitments, as this will be essential for sustaining the necessary level of assistance moving forward.

Putting the Support in Perspective

To assess whether the support provided to Ukraine is truly substantial, it is essential to place it in context through meaningful comparisons. One approach is to examine it in historical terms, particularly in relation to past instances of large-scale military and financial assistance. A key historical benchmark is the Second World War, when military aid among the Allied powers played a decisive role in shaping the outcome of the conflict. Extensive resources were allocated to major military operations spanning multiple continents, with the United States and the United Kingdom, in particular, dedicating a significant share of their GDP to support their allies, including the Soviet Union, France, and other nations.  As seen in Figure 1, by comparison, the current level of aid to Ukraine, while substantial and essential to its defense, remains considerably smaller in relation to GDP.

Figure 1. Historical comparisons

Source: Trebesch et al. (2024).

Another way to assess the scale of support to Ukraine is by comparing it to other major financial commitments made by governments in response to crises. While the aid allocated to Ukraine is significant in absolute terms, it remains relatively modest when measured against the scale of other programs, see Figure 2.

A recent example is the extensive subsidies provided to households and businesses to mitigate the impact of surging energy prices since 2022.  Sgaravatti et al. (2021) concludes that most European countries implemented energy support measures amounting to between 3 and 6 percent of GDP. Specifically, Germany allocated €157 billion, France and Italy each committed €92 billion, the UK spent approximately €103 billion. These figures represent 5 to 10 times the amount of aid given to Ukraine so far, with some countries, such as Italy, allocating even greater relative sums. On average, EU countries have spent about five times more on energy subsidies than on Ukraine aid. Only the Nordic countries and Estonia have directed more resources toward Ukraine than toward energy-related support. Although not all allocated funds have been fully disbursed, the scale of these commitments underscores a clear political and financial willingness to address crises perceived as directly impacting domestic economies.

Figure 2. EU response to other shocks (billions of €)

Source: Trebesch et al. (2024).

Another relevant comparison is the Pandemic Recovery Fund, also known as Next Generation EU. With a commitment of over €800 billion, this fund represents the EU’s comprehensive response to the economic consequences of the Covid-19 pandemic. Again, the support to Ukraine appears comparatively small, about one seventh of the Pandemic Recovery Fund.

The support to Ukraine is also much smaller in comparison to the so-called “Eurozone bailout”, the financial assistance programs provided to several Eurozone member states (Greece, Ireland, Spain and Portugal) during the sovereign debt crisis between 2010 and 2012. The programs were designed to stabilize the economies hit hard by the crisis and to prevent the potential spread of instability throughout the Eurozone.

Overall, the scale of these commitments underscores a clear political and financial willingness and ability to address crises perceived as directly impacting domestic citizens. This raises the question of whether the relatively modest support for Ukraine reflects a lack of concern among European voters. However, this does not appear to be the case. In survey data from six countries – Belgium, Germany, Hungary, Italy, the Netherlands, and Poland – fielded in June 2024, most respondents express satisfaction with current aid levels, and a narrow majority in most countries even supports increasing aid (Eck and Michel, 2024).

A further illustration comes from the Eurobarometer survey conducted in the spring of 2024 which asked: “Which of the following [crises] has had the greatest influence on how you see the future?”. Respondents could choose between different crises, including those mentioned above, and the full-scale invasion of Ukraine.

Figure 3 illustrates the total commitments made by EU countries for Ukraine up until October 31, 2024, compared to other previously discussed support measures, represented by the blue bars. The yellow bars, on the other hand, show a counterfactual allocation of these funds, based on public priorities as indicated in the Eurobarometer survey. Longer yellow bars indicate that a higher proportion of respondents perceived this crisis as having a greater negative impact on their outlook for the future. By comparing the actual commitments (blue bars) with this hypothetical allocation (yellow bars)—which reflects how resources might have been distributed if they aligned with the population’s stated priorities—it becomes evident that there is substantial public backing for maintaining a high level of support for Ukraine. The results show that the population prioritizes the situation in Ukraine above several other economic issues, including those that directly affect their own personal finances.

Figure 3. Support to Ukraine compared to other EU initiatives – what do voters think?

Source: Trebesch et al. (2024); Niinistö (2024); authors’ calculations.

The Costs of Not Supporting Ukraine

When discussing the costs of support to Ukraine it is important to understand what the correct counterfactual is. The Russian aggression causes costs for Europe irrespective of what actions we take. Those costs are most immediately felt in Ukraine, with devastating human suffering, the loss of lives, and a dramatic deterioration in all areas of human wellbeing. Also in the rest of Europe, though, the aggression has immediate costs, in the economic sphere primarily in the form of dramatically increased needs for defense spending, migration flows, and disruptions to global trade relationships. These costs are difficult to determine exactly, but they are likely to be substantially higher in the case of a Russian victory. Binder and Schularik (2024) estimate increased costs for defense, increased refugee reception and lost investment opportunities for the German industry at between 1-2 percent of GDP in the coming years. As they put it, the costs of ending aid to Ukraine are 10-20 times greater than continuing aid at Germany’s current level.

Any scenario involving continued Russian aggression would demand substantial and sustained economic investments in defense and deterrence across Europe. Clear historical parallels can be drawn looking at the difference in countries’ military spending during different periods of threat intensity. Average military spending in a number of Western countries during the Cold War (1949-1990) was about 4.1 percent of GDP, much higher in the U.S. but also in Germany, France and the UK. In the period after 1989-1991 (the fall of the Berlin Wall, the dissolution of the Soviet Union), the amounts fell significantly. The average for the same group of countries in this period is about 2 percent of GDP and only 1.75 percent if the U.S. is excluded.

Also after 1991 there is evidence of how perceived threats affect military spending. Figure 4 plots the change in military spending over GDP between 2014-2024 against the distance between capital cities and Moscow. The change varies between 0 (Cyprus) and around 2.25 (Poland) and shows a very clear positive correlation between increases in spending and proximity to Moscow.  There has also in general been a substantial increase in military spending after 2022 in several European countries, but in a scenario where Russia wins the war, these will certainly have to be increased further and maintained at a high level for longer.  An increase in annual military expenditure in relation to GDP in the order of one to two percentage points would mean EUR 200-400 billion per year for the EU, while the total EU support to Ukraine from 2022 to today is just over €100 billion.

Figure 4. Increase in military expenditures in relation to distance to Moscow

Source: SIPRI data, authors’ calculations.

A Russian victory would also have profound consequences for migration flows, with the most severe effects likely in the event of Ukraine’s surrender. The Kiel Institute estimates the cost of hosting Ukrainian refugees at €26.5 billion (4.2 percent of GDP) for Poland, one of the countries that received the largest flows. Beyond migration, a Russian victory would also reshape the global geopolitical order. Putin has framed the war as a broader conflict with the U.S. and its democratic allies, while an emerging alliance of Russia, Iran, North Korea, and China is positioning itself as an alternative to the Western-led system. A Ukrainian defeat would weaken the authority of the U.S., NATO, and the rules-based international order, potentially driving more nations in the Global South toward authoritarian powers for military and economic support. This shift could disrupt global trade, affect access to food, metals, and energy. Estimating the full economic impact of such a shift is difficult, but comparisons can be drawn with other global shocks. The European Union’s GDP experienced a significant contraction due to the Covid-19 pandemic, 5.9 percent contraction in real GDP according to Eurostat, 6.6 percent according to the European Central Bank. While the economy rebounded relatively quickly from the pandemic, a permanent geopolitical realignment caused by a Russian victory would likely have far more severe and lasting economic consequences.

Given that Ukraine is at the forefront of Russia’s aggression, its resilience serves as a critical test of Europe’s ability to withstand potential future threats. Thus, strengthening our own security and economic stability in the long term is inseparable from strengthening Ukraine’s resilience now. The fundamental difference lies in the long-term trajectory of these investments. In a scenario where Ukraine is victorious, military and financial aid during the war would eventually transition into reconstruction efforts and preparations for the country’s integration into the EU. This outcome is undeniably more favorable—both economically and in humanitarian terms—not only for Ukraine but for Europe as a whole. Therefore, an even more relevant question is whether the level of support is enough for Ukraine to win the war.

Is Sufficient Support Feasible?

Is it even reasonable to think that we in the West could be able to support Ukraine in such a way that they can militarily defeat Russia? Russia is spending more on its war industry than it has since the Cold War. In 2023, it spent about $110 billion (about 6 percent of GDP). By 2024, this figure is expected to have increased to about $140 billion (about 7 percent of GDP). These amounts are huge and represent a significant part of Russia’s state budget, but they are not sustainable as long as sanctions against Russia remain in place (SITE, 2024). For the EU, on the other hand, the sacrifices needed to match this expenditure would not be as great. The EU’s GDP is about ten times larger than Russia’s, which means that in absolute terms the equivalent amount is only 0.6-0.7 percent of the EU’s GDP. If the U.S. continues to contribute, the share falls to below 0.3 percent of GDP.

Despite the economic advantage of Ukraine’s allies over Russia, several factors could still shift the balance of power in Russia’s favor. One key issue is military production capacity—Russia has consistently outproduced Ukraine’s allies in ammunition and equipment. While Western economies have the resources to manufacture superior weaponry, actual production remains insufficient, requiring both increased capacity and political will. Another challenge is cost efficiency. Military purchasing power parity estimates suggest that Russia can produce approximately 2.5 times more military equipment per dollar than the EU, giving it a cost advantage in volume production. However, this does not fully compensate for its overall economic disadvantage, particularly when factoring in quality differences.

Manpower is also a critical factor. Russia’s larger population allows for sustained mobilization, but at a steep financial cost. Soldiers are recruited at a minimum monthly salary of $2,500, with additional bonuses bringing the first-year cost per recruit to three times the average Russian annual salary. Compensation for injured and fallen soldiers further strains state finances, with estimated payouts reaching 1.5 percent of Russia’s GDP between mid-2023 and mid-2024. Over time, these costs limit Russia’s ability to fund its war effort, making mass mobilization financially unsustainable.

Overall, advanced Western weaponry and superior economic capacity can match Russia’s advantage in manpower if the political will is there. Additionally, Russia’s already fragile demographic situation is deteriorating due to battlefield losses and wartime emigration. Any measure that weakens Russia’s economic capacity—particularly through sanctions and embargoes—diminishes the strategic advantage of its larger population and serves as a crucial complement to military and financial support for Ukraine.

Conclusion

Ukraine’s western allies have provided the country with substantial military and financial support since the onset of the full-scale invasion. Yet, relative to the gravity of the risks involved, previous responses to economic shocks, and citizens’ concerns about the situation, the support is insufficient. The costs of a Russian victory will be higher for Europe, even disregarding the human suffering involved. With U.S. support potentially waning, EU needs to pick up leadership.

References

  • Becker, Torbjörn; and Anders Olofsgård; and Maria Perrotta Berlin; and Jesper Roine. (2025). “Svenskt Ukrainastöd i en internationell kontext: Offentligfinansiella effekter och framtidsscenarier”, Commissioned by the Swedish Fiscal Policy Council.
  • Binder, J. & Schularick, M. (2024). “Was kostet es, die Ukraine nicht zu unterstützen?” Kiel Policy Brief No. 179.
  • Eck, B & Michel, E. (2024). “Breaking the Stalemate: Europeans’ Preferences to Expand, Cut, or Sustain Support to Ukraine”, OSF Preprints, Center for Open Science.
  • Niinistö, S. (2024) .“Safer Together – Strengthening Europe’s Civilian and Military Preparedness and Readiness” European Commission Report.
  • Sgaravatti, G., S. Tagliapietra, C. Trasi and Zachmann, G. (2021). “National policies to shield consumers from rising energy prices”, Bruegel Datasets, first published 4 November 2021.
  • SITE. (2024). “The Russian Economy in the Fog of War”. Commissioned by the Swedish Government.
  • Trebesch, C., Antezza, A., Bushnell, K., Bomprezzi, P., Dyussimbinov, Y., Chambino, C., Ferrari, C., Frank, A., Frank, P., Franz, L., Gerland, C., Irto, G., Kharitonov, I., Kumar, B., Nishikawa, T., Rebinskaya, E., Schade, C., Schramm, S., & Weiser, L. (2024). “The Ukraine Support Tracker: Which countries help Ukraine and how?” Kiel Working Paper No. 2218. Kiel Institute for the World Economy.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Three Years On – Ukrainians in Poland after Russia’s 2022 Invasion

Ukrainians in Poland rallying in Kraków, waving Ukrainian and Polish flags.

The wave of Ukrainian refugees that followed the full-scale Russian invasion on February 24th, 2022, was met in Poland with unprecedented levels of support and solidarity. According to data from the Polish Household Budget Survey, 70 percent of households offered some help to Ukrainians in Poland, and over 10 percent (1.3 million households) provided direct personal assistance. Overall, by early 2025, 1.9 million refugees had registered in the dedicated social security registry (PESEL-UKR system), and 1 million continue to be registered as residing in Poland. Drawing on other data sources, we argue in this policy paper that the latter figure is highly overstated, giving rise to unjustified criticisms of low school enrolment among Ukrainian children and low rates of labour market activity among adult refugees. We highlight the risks that these critical voices may become prominent in the ongoing campaign ahead of the Polish presidential elections. During the crucial months of prospective peace negotiations, when presidential candidates are appealing for voters’ support, we argue that the public debate in Poland concerning Ukraine and Ukrainian refugees ought to be grounded in reliable evidence.

Polish Support for Ukraine: Shifts in Public Attitudes, and Policy Challenges Amid War and Elections

The dramatic events of late February 2022 shook the populations across Ukraine, Europe and the world. The objective of the massive, full-scale Russian aggression was clear – to rapidly take over Kyiv, force Ukraine to surrender and take over full control of the country thus subjugating it into Kremlin’s rule. Three years later, while thousands of Ukrainian soldiers and civilians have lost their lives, and while Russia has imposed a massive economic and social burden on Ukraine, its key objective has badly failed and remains far from being realised. This thanks to the commitment of the Ukrainian government, the country’s army and the mobilisation of the Ukrainian population. In turn, the country’s resistance would not have been possible without substantial support from the outside, primarily from countries in the European Union and the U.S. International aid from governments to Ukraine between February 2022 and October 2024 amounted to over €230 billion (bn) with the largest part contributed by the US (€88 bn), the European Commission and European Council (€45 bn) and Germany (€16 bn). Proportional to 2021 GDP levels, the highest support came from Estonia (2.20 percent), Denmark (2.02 percent) and Lithuania (1.68 percent) (Kiel Institute, 2024). Support for Ukraine has come in many forms – military, material, financial, political and diplomatic. The international community has also imposed substantial economic and political sanctions against Russia, and has excluded it from many international forums, marginalising its voice in international discussions and meetings.

On top of that, Ukraine’s neighbours and many Western countries opened their borders and welcomed a massive wave of refugees escaping the immediate military invasion in the east and north of Ukraine, seeking safety from continued bomb and drone attacks on the entire country, and running away from the risk of a complete Russian take-over. It is estimated that up to 8 million Ukrainians left the country in the first months after the full-scale war started, initially moving mainly to Poland, Romania and Slovakia (Polish Economic Institute, 2022; UNCHR, 2022). At the same time the Russian aggression resulted in internal displacement of more than 3.6 million Ukrainians (IOM UN Migration, 2024). While many of the international and internal refugees have since returned, over 6.8 million Ukrainians still reside outside of Ukraine’s borders (UNCHR, 2025).

The wake of the war was met with an unprecedented wave of support among the Polish population (Duszczyk and Kaczmarczyk, 2022). We use data from one of the largest representative Polish surveys – the Household Budget Survey 2022 and 2023 – to show the degree of involvement among Polish households in direct and indirect support to Ukrainian refugees. We also show that declarative general sympathy towards Ukrainians reached over 50 percent in 2023 –  twice as high compared to 16 years earlier. This support has by now fallen close to the levels from just before the full-scale war (40 percent). As the immediate need for help has become less urgent, and the refugees have organised their lives in Poland, the involvement of Polish households in supporting the Ukrainian population has also declined. At its peak at the beginning of the war the proportion of Polish households that were actively involved in helping the Ukrainian population reached nearly 70 percent, with over 10 percent (i.e. more than 1.3 million) of the households providing direct assistance to the refugees.

In this policy paper we call into question some of the official data on the number of Ukrainian refugees who continue to reside in Poland (almost 1 million) (EUROSTAT, 2025). We argue that inconsistency across different sources with regard to precise numbers – such as likely inflated refugee count in the official social security register – may be used  to build unfavourable claims against the refugees and the Ukrainian cause overall, as arguments and narratives develop based on marginal anecdotal evidence and incorrect statistics. As the new U.S. administration tries – in its own way – to bring an end to the war, Ukraine will need continued strong support from all Western allies to end the war on favourable terms for Ukraine and to get significant additional help to rebuild the country. Ukraine’s safety and economic security will depend on Western military guarantees and closer integration with the EU. All of this requires the support of populations in these countries, which gets increasingly undermined by internal disputes and external political interferences.

As negotiations to end the war begin to take shape, Poland enters a crucial electoral campaign ahead of its May 2025 presidential elections. This combination is likely to place the Ukrainian question among the top issues on the local agenda. At the same time, there is a risk  that the extent of support towards Ukraine and Ukrainian residents in Poland will be used in the battle for electoral votes. We argue that any debate around this topic should draw on reliable, up to date data sources. In this regard, the  government should provide more information to clarify data inconsistencies, to shed more light on the situation among Ukrainian citizens currently residing in Poland, and to ensure that any doubtful narratives raised in the public debate are quickly addressed.

Ukrainian sovereignty, its peaceful development and prosperity are very much in the interest of both Poland and the rest of Europe. Therefore, the Polish government must provide arguments to reinvigorate the support for Ukraine among its population. This will be fundamental to ensure Ukraine’s military success and stability, to guarantee the mutual benefits of integration of the Ukrainian population in Poland, and for the future economic cooperation with Ukraine in the prospective enlarged European Union.

The Outbreak of the Full-Scale War: Ukrainians in Poland

In the first couple of months after the full-scale Russian invasion of Ukraine on February 24th  2022, over 2 million refugees fled to Poland through the common land border, with as many as 1.3 million people crossing the border during the first two weeks of the war (Figure 1a). The exact number of refugees who arrived in Poland is difficult to gauge as some people left Ukraine via the border with Romania or Slovakia and could have entered Poland across the uncontrolled borders of the Schengen area.

BOX 1. Ukrainian citizens in Poland before the war in 2022

Before February 24, 2022, the migration of Ukrainian citizens to Poland was regulated by existing legal mechanisms concerning all foreigners coming from non-EU countries (European Parliament, 2010). Migrants could apply for a temporary residence permit for a maximum of three years, most often in connection with prearranged employment or education (Sejm RP, 2013). Since 2017 Ukrainian citizens with biometric passports could travel to Poland and other EU countries without a visa, but their stay was limited to 90 days (European Parliament, 2017). Access to the Polish social transfer system for migrants and their families was strictly regulated and limited. Labor migrants and temporary visitors under the visa-free regime had no right to public benefits or healthcare (Sejm RP, 2003).

At the time, application for refugee status was possible, but required undergoing a lengthy and burdensome asylum procedure. Those with refugee status granted had access to public transfers and healthcare (Sejm RP, 2003).

In accordance with the European regulations of Council Directive 2001/55/EC of 20 July 2001, the Polish government responded to the refugee crisis by establishing a special residence status for those fleeing the war. The regulations were introduced as early as  March 12, 2022, and as a result, all Ukrainian refugees who arrived in Poland since 24 February could register themselves (and their family members) in a special social security registry, the so-called PESEL-UKR (Sejm RP, 2022). This registration immediately provided the refugees with an official status of temporary protection and legalized their stay in Poland until a specified date, which – as the war continued – has been regularly extended. In comparison to other, non-EU migrants, the PESEL-UKR status grants the refugees simplified access to the Polish labour market and gives them access to public healthcare and social transfers – including general support available to all legal residents, as well as special financial and non-monetary aid targeted specifically at refugees (Duszczyk and Kaczmarczyk, 2022). The registration process was streamlined and widely accessible in all municipality offices throughout Poland and resulted in rapid registration of the majority that had arrived to Poland since February 24, 2022. By the end of June 2022, 1.2 million individuals had registered for the PESEL-UKR status. The number grew to 1.4 million by October 2022 and continued to grow to 1.9 million registrations by January 2025. As evident from Figure 1b not all of those who crossed the Polish border (or arrived in Poland having left Ukraine through a different country) stayed in the country. Some continued their journey to other EU countries and beyond, while some decided to return to Ukraine. It is worth noting though that of all the registrations carried out by the end of 2024, nearly half happened in the first 8 weeks following the invasion.

Figure 1. Number of Ukrainian citizens crossing the border between Poland and Ukraine and registering for PESEL-UKR, 2021-2024

Note: Weekly data on crossings via all land borders with Ukraine.
Source: Open Data Portal (2025a, 2025b).

A notable and important legal change was introduced in October 2022, whereby individuals are automatically withdrawn from the PESEL-UKR registry after a period of 30 days when they (1) leave Poland, (2) apply for a residence permit, or (3) apply for international protection status (Sejm RP, 2022). This change is the reason for the substantial drop in the number of registered refugees at the end of 2022, with over 400 000 individual withdrawals (Figure 1b). This change in legislation was aimed at estimating more precisely the number of Ukrainian refugees currently residing in Poland. However, since withdrawals from the system require that departures from the territory of Poland are officially recorded at the border, or follow a parallel registration in another EU country, or are recorded as departures from the Schengen area through another country, the numbers in the system may still be far from the actual number of refugees currently residing in Poland.

Since late 2022 the number of registered Ukrainian refugees in Poland has been fairly stable at slightly below 1 million. Similarly, the shares of different age cohorts have not changed. In Figure 2 we show the split of those in the PESEL-UKR registry by age. Children under the age of 18 account for about 40 percent of all refugees, of which 30 percent are in schooling age (7-17). 7 percent of the refugees are aged 62 years or older. Among those aged 18-61 years old, 70 percent are women. It is worth noting that out of about half a million children recorded in the first 7 months, almost 400 000 are still registered in the PESEL-UKR registry, a number that has been stable since the end of 2022. As we show below, these values are significantly higher compared to the number of refugee children reported by two other administrative sources. This in turn casts doubt on the reliability of the estimates of the total number of Ukrainian refugees in Poland.

Figure 2. Ukrainian citizens registered with PESEL-UKR, by age group

Note: Based on registered year of birth, age as of 2025.
Source: Open Data Portal (2025b).

Where Are All the Registered Children?

To check the reliability of the PESEL-UKR registry data, we match the information from the registry with information from school registers provided by the Ministry of National Education, and the number of children benefitting from social transfers provided by the Social Insurance Institution (ZUS). As evident in Figure 3, the number of registered school-age children in the PESEL-UKR registry and the number of those who are officially registered in Polish schools significantly differ, and the difference seems stable over time. According to school records, most of the Ukrainian parents promptly enrolled their children in schools right after their arrival in Poland – about 120 000 pupils joined Polish schools as early as March 2022. The numbers grew in September 2024, which followed the introduction of obligatory schooling for all Ukrainian children aged between 7 and 17  (Sejm RP, 2024), with online classes in Ukraine permitted only for those in their final year. When we compare data for late 2024 and early 2025, we see that while about 270 000 children aged 7-17 were registered in the PESEL-UKR database, only 152 000 attended Polish schools – resulting in a very low enrolment rate of about 56 percent – raising legitimate concerns over the children’s academic and social development (see for example CEO, 2024).

Figure 3. Number of school-age children among Ukrainian refugees

Note: School registrations: all school types except preschool education, post-secondary schools, schools for adults and grades in which children are at least 18 years old. Ukrainian refugees only. Child benefit data points as reported in June, October and December.
Source: Open Data Portal (2025b, 2025c); information on 800+ benefit recipients: unpublished data from the Social Insurance Institution (ZUS).

As evident from Figure 3 though, from late 2023 all the way until early 2025, the ‘800+ benefit’ (which is a universal child benefit paid to all children aged 0-17) was paid to around 150 000 Ukrainian refugee children aged 7-17. Given the ease of claiming the benefit, and the relatively high value of the transfers (about 23 percent of net minimum wage per child per month), it seems very unlikely that so many families would opt out of the support. Looking at the close match between the numbers from ZUS and from the Ministry of Education, the more likely interpretation of the figures is not that children stay away from school and fail to claim social transfers, but rather that far fewer children continue to reside in Poland.

An additional argument supporting the inaccuracy of the PESEL-UKR data comes from a report published by the Narodowy Bank Polski (the Polish Central Bank) (NBP, 2024). Using information from a large survey conducted among Ukrainians living in Poland the report shows that 83 percent of school-age children in refugee families were enrolled in either a Polish or a Ukrainian school physically based in Poland. This is very far from the 56 percent rate calculated with reference to administrative data, again suggesting that the PESEL-UKR numbers of school-age children are highly inflated. If that is the case, not only the number of refugee children but the overall PESEL-UKR numbers (992 000 by January 2025) should be called into question.

How Many of the Registered Adults Are Active on the Labor Market?

The accuracy of the overall number of refugees is important because it is one of the key references for policy discussions. While international regulations specify that victims of war and conflict are granted the same basic rights and privileges as other legal residents, including access to the labour market, healthcare and other public services (Duszczyk et al., 2023), negative sentiments towards Ukrainian citizens have recently grown in Poland. Further, various restrictions on access to public support for Ukrainian refugees have already been publicly discussed and proposed in Parliament. These sentiments feed on the claims of fraudulent behaviour, unwillingness to engage in official employment and crowding out of public services for Polish nationals. Such claims about Ukrainians are spread more easily if not met by accurate numbers.

Figure 4. Number of Ukrainian men and women contributing to pension insurance in Poland

Note: ‘Other countries’ refers to other registered foreigners.
Source: Social Insurance Institution ZUS (2024).

Looking at labour market activity, the number of Ukrainians who were officially active on the Polish labour market (as employees, self-employed or receiving unemployment benefit) and who thus paid pension contributions to social security in December 2023 stood at 759 000 (see Figure 4). Of those 396 000 were men and 363 000 were women. While ZUS, the Social Insurance Institution, does not distinguish between migrants (those with the right to stay before February 24th, 2022) and refugees (with PESEL-UKR status) it seems safe to assume that those who registered in the ZUS database in 2022 and 2023 belong to the latter group. The difference between the number of Ukrainians contributing to social security in December 2021 and December 2023 is 132 000 and, as seen in Figure 4, the additional numbers of those registered differ only for Ukrainian women. New Ukrainian male refugees certainly also appear in the database in 2022 and 2023, but their number is difficult to estimate as some earlier migrants returned to Ukraine after the outbreak of the war, and as a result the net effect of men between 2021 and 2023 is essentially zero. Focusing on women, we can compare the number of new registrations in the ZUS database to the total number of women aged 18-59 (excluding students) in the PESEL-UKR database (about 335 000 in December 2023). Such a ratio would suggest that only about 40 percent of female Ukrainian refugees are formally contracted on the Polish labour market (on contracts paying social security contributions). This is much lower than the values presented in the NBP report (2024), suggesting that in July 2024, around 70 percent of the adult war refugees were working and further 19 percent were looking for a job. This comparison once again suggests that the PESEL-UKR numbers are significantly inflated.

Addressing the public concerns with regard to school enrolment and labour market activity with correct figures could help counter the growing negative sentiments towards Ukrainians in Poland as well as towards the overall support for the process of securing peace in Ukraine and integrating it closer with Poland and the EU. In the next section we show that when the full-scale war started in February 2022, not only the sentiments were strongly in favour of supporting Ukraine. Additionally, the level of engagement of the Polish population in actively assisting Ukrainian refugees was truly unprecedented.

Individual Support in Response to the Outbreak of the War

In the first few weeks after the full-scale Russian invasion the Polish society almost uniformly united in providing help and assistance to Ukrainians affected by the war. The Polish Economic Institute estimated that during the first 3 months the financial, humanitarian and material help provided by the Polish society alone reached 9-10 billion PLN, which corresponded to 0.34-0.38 percent of Poland’s GDP (Baszczak et al. 2022). Polish private businesses were also quick to join the assistance efforts, donating money, food, medical and other specialized equipment, and providing services such as transportation, insurance, and education free of charge (WEI 2023). Until May 2022, 53 percent of Polish enterprises engaged in different kinds of relief or support.

The assistance to refugees has been documented in numerous anecdotes, formal reports and extensive media coverage. The scale of support is also reflected in the Polish Household Budget Survey, a regular household survey conducted by the Central Statistical Office. Already in the first quarter of 2022 the survey included several questions related to the assistance given by the interviewed households to Ukrainian refugees. These questions were then included in the survey throughout 2022 and 2023. As shown in Figure 5, when the inflow of refugees from Ukraine started in late February 2022, nearly 70 percent of Polish households offered some form of assistance. Most of this help took the form of gifts and money transfers, but 10.4 percent, i.e. over 1.3 million Polish households, offered direct help such as transport, providing an overnight stay, delivering goods to accommodation venues, etc. The fraction of those offering assistance stayed very high through the first half of 2022, and 23 percent of Polish households still provided some form of assistance in the last quarter of 2022 (Figure 5). As the war stalled, and the Ukrainian population settled and became more independent, and the Polish government took official responsibility of assisting those still in need, the level of direct support from households fell. However, in late 2023 9 percent of Polish households still continued to provide some form of assistance. What is really special about the initial wave of support is that the positive attitudes towards the refugees and the Ukrainian cause were nearly universal. As seen in Figure 6, assistance was offered by high and low educated households (79 and 59 percent), those living in large cities and in rural areas (73 and 68 percent), the young and the old (66 and 63 percent). Households who declared good material conditions were more likely to offer help (75 percent), but even among those who declared difficulties with their financial status 41 percent came forward to offer some assistance.

Figure 5. Polish households engaged in assisting Ukrainian refugees, 2022-2023 (by quarter)

Note: Help covers support and transfers to individuals and institutions in Ukraine as well as to Ukrainian refugees in Poland. “Personal assistance” – direct help to refugees (with job search, doctor’s visits, public matters, language lessons, translation, etc.), “Other help” – help at the border, in reception points, temporary accommodation points, gift collection points, transportation, hosting or subletting own housing free of charge, blood donation.
Source: own compilation based on the Polish Household Budget Surveys 2022-2023.

Figure 6. Polish households engaged in assisting Ukrainian refugees (any help) in the first quarter of 2022, by household characteristics

Notes: Urban status – A: rural area, B: city below 100 000 inhabitants, C: city over 100 000 inhabitants. Material situation (self-assessed) – D: bad or rather bad material situation, E: average material situation, F: good or rather good material situation. Age of head of household – G: 18-29, H: 30-59, I: 60 and older. Education of head of household – J: lower than secondary, K: secondary or postsecondary, L: tertiary. Source: own compilation based on the Polish Household Budget Survey 2022.

It is worth noting also that by the time the full-scale war broke out in February 2022 the sentiments among the Polish population towards Ukrainians had improved compared to attitudes in the 1990s and early 2000s. These sentiments have been regularly surveyed by the Public Opinion Research Center CBOS, and we summarize them in Figure 7. As evident, in the early 1990s the proportion of Poles declaring positive sentiments towards Ukrainians was very low. It steadily increased until  about 2017 and then grew rapidly from 2018 till 2020. In 2022 the sentiments towards Ukrainians reached their peak, with over 50 percent of Poles declaring fondness towards them – on par with nations such as Lithuania and Slovakia. At the same time positive attitudes towards Russians reached an all-time low of 6 percent. Positive sentiments towards Ukrainians declined in 2024 – the last year for which the data is available – but even after the drop they are still high when compared with attitudes before 2023.

While the general positive sentiments towards Ukrainians in Poland has improved over the years, 2022 was truly unique when it comes to attitudes toward Ukrainian refugees (see Figure 8). Between 2015 and 2018, i.e. after Russia’s annexation of Crimea in 2014, around 50-60 percent of Poles declared that refugees from the conflict areas in Ukraine should be welcomed in Poland. When the same question was asked again in March 2022, 95 percent agreed that Ukrainian refugees should be welcomed in Poland and nearly 60 percent declared that they ‘definitely’ agreed with such a policy. However, the proportion of Poles in support of welcoming Ukrainian refugees has decreased. In late 2024 the share was more or less back at the level prior to the full-scale war, i.e. at over 50 percent.

Figure 7. Share of survey participants declaring fondness towards foreigners of different origin

Source: The Public Opinion Research Center CBOS (2024a).

Figure 8. Opinion survey: If Poland should accept Ukrainian refugees coming from the conflict territories

Note: The surveys were discontinued between 2018 and 2022.
Source: Public Opinion Research Center CBOS (2024b).

Why Have Sentiments Shifted?

At the crucial time of a possible long-awaited end to the Russian invasion, when coordinated support of Western governments will be essential to secure a just and long-lasting solution, the willingness of these governments to firmly stand behind Ukraine will, to a large extent, depend on the sentiments among their voters. Thus, the wavering enthusiasm for the Ukrainian cause in countries such as Poland can be seen as a worrying sign, in particular given how high the level of support was in the early days of the invasion. This support will be particularly important over the next few months, given the likely period of intensive international negotiations and the battle for votes in the upcoming Polish presidential elections.

It is not unusual to try to put the blame for various unfortunate developments on external forces, including global trends, external conflicts and all things ‘foreign’. Thus, the fact that many people in various countries, including Poland, blame their perceived worsened economic conditions on the consequences of the war and the related influx of Ukrainian refugees is far from surprising. While some politicians might want to explain the complex broad context, others will take advantage of these sentiments and continue to fuel the negative discourse. With that in mind, three main topics have been particularly visible in the public debate in Poland:

  • access to social transfers, in particular to the ‘800+’ child benefit for Ukrainian refugees
  • Ukrainian refugees’ participation in the Polish labour market and tax contributions to the local budget
  • risks to particular groups of interest, most prominently reflected in Poland by the crisis surrounding imported Ukrainian grain (see Box 2)

The first two issues are strongly related to the general approach to immigration and integration of migrants in the Polish society. The popular media discourse – in traditional and social media – tends to focus on instances of abuse of social support and public services, and to build up negative sentiments along the lines of supposed unwillingness to engage in legal economic activity among those who have settled in Poland. While one can certainly identify anecdotes which selectively confirm all sorts of misbehaviour, the overall evidence would clearly reject such claims. As discussed, the surveys conducted by the NBP show that a significant majority of migrants and refugees from Ukraine find legal employment in Poland. Further research based on administrative data demonstrates that many Ukrainians establish and successfully run their businesses in Poland (Polish Economic Institute, 2024). Between January 2022 and June 2024 Ukrainian migrants and refugees established almost 60 000 enterprises in Poland, and as Vézina et al. (2025) argue, these firms did not crowd out Polish businesses, meaning they represent a true value added to the national and local economies.

Recent public discussions, however, have focused on the combination of employment and benefit claims. The debate started with two parliamentary initiatives by the right wing Konfederacja and Prawo i Sprawiedliwość opposition parties and was then picked up by the leading government party’s presidential candidate, Rafał Trzaskowski (money.pl, 2025). The proposed legislative changes are broadly similar, suggesting that access to the main child benefits – the ‘800+ benefit’ – should be limited to those refugee families where at least one of the parents is formally employed. Such conditionality does not apply to Polish families, and according to current legislation, to no other families legally residing in Poland (Konfederacja, 2025; Prawo i Sprawiedliwość, 2025). The supposed aim of the changes would be to, first of all, limit fraudulent claims among those who no longer reside in Poland, and secondly, to restrict access to the benefits to those who contribute with their taxes to the public budget only. On both counts the policy seems badly misconceived. As shown above, the ‘800+’ claims closely match the numbers of children officially registered in Polish schools, far below the numbers registered in the PESEL-UKR database. Moreover, such a policy is unlikely to lead to much higher employment among refugee parents. The benefit is universal and received by all families regardless of employment status or income; previous research has shown a similar benefit to have negligible effects on employment (see for example: Myck and Trzcinski, 2019). Therefore, the most likely reason for some refugee parents to not take up work is not unwillingness, but rather other constraints – constraints which will not change as a result of the proposed restrictions. Most Ukrainian families who fled the war are mothers whose partners could not join them due to military restrictions on the mobility of Ukrainian men. While many women settled and found jobs, family obligations may significantly limit some refugee’s options for regular employment. For these families, withdrawing the eligibility for the ‘800+ benefit’ would be a significant loss of income with potentially dire consequences for their children. It is thus difficult to understand the initiatives as anything other than attempts to address the growing critical sentiments towards the refugees to gain support among voters who are convinced by the anecdotal narrative. As argued above – with the exception of anecdotes – there is very little evidence in support of such legislative changes. Even from the point of view of potential budgetary gains, the proposed limitations on benefit claims would impose heavy administrative costs which would likely exceed any resulting savings. The politicians coming forward with such proposals would be well advised to consider data from various sources and avoid raising issues which have a clear potential to fuel negative sentiments towards refugees and migrants.

BOX 2. The dispute over the Ukrainian grain

In February 2022, Russia’s full-scale invasion destabilized the Ukrainian market, in particular the agricultural sector, due to blocked exports through the Black Sea. To enable exports, so-called Solidarity Lanes were established, including corridors crossing Poland (European Commission 2022). However, Poland was not prepared to handle and re-export large volumes of Ukrainian agricultural products, due to insufficient capacity of Polish sea ports (farmer.pl, 2023; for such quantities experts argue that road transport is unprofitable; Kupczak, 2023). This led to a surplus of grain in multiple storehouses throughout the country, especially in Southeastern Poland. Overall, Polish grain stocks increased by over 250 percent, from 3.8 to almost 10 million tones (Supreme Audit Office, 2023).

The drastic surplus of grain, together with much lower prices for Ukrainian crops, led to a dramatic price drop—one could buy mixed Polish-Ukrainian grain for half the price it cost the previous year (rp.pl, 2023). Apart from its impact on quantity and price, Ukrainian grain drew public attention also due to concerns regarding its quality (money.pl, 2023). Imported agricultural and food articles must undergo rigorous quality controls at the border, depending on their purpose – human consumption, animal fodder or cultivation, conducted by the respective state inspection office. Random controls held in 2022 by the Food Articles Inspection revealed that 2.4 percent of the grain samples were banned from entering the market (rp.pl, 2023).

According to a report by the Supreme Audit Office (2023), controls run by the Veterinarian Inspection were drastically limited as of May 2022 which allowed poor quality fodder grain to enter the Polish market (Supreme Audit Office 2023). Since technical grain – used in the production of biofuels, insulating materials or oils – is exempt from border quality controls, its imports and sale as consumable grain could be particularly profitable. Several incidents of such forgery were subject to investigation confirming that large quantities of technical grain originating from Ukraine were sold as consumable to Polish companies (gov.pl, 2024).

The tightened border controls that followed, resulted in multiday delays in the transportation of food products from Ukraine. To mitigate these constraints an agreement was reached, and, as of March 8, 2023, grain transit through Poland to other final destinations (within EU or to a third country via Polish ports) is exempt from border controls at the Polish-Ukrainian border and sealed by the National Revenue Administration. These seals can be removed only at the final destination (gov.pl, 2023a).

Throughout this period Polish farmers held demonstrations opposing the influx of Ukrainian grain. The border crossings with Ukraine were temporarily blocked by protests aimed at disrupting the flow of goods. The symbolic dumping of Ukrainian grain on the ground at the Medyka border crossing resulted in a famously cited statement by the Ukrainian President Volodymyr Zelensky that this event may be seen as evidence of the “erosion of solidarity” with Ukraine (BBC, 2024).

After the EU-level temporary embargo on four types of grains and oil seeds from Ukraine was lifted in mid-September 2023 (which was in effect since May 2023), Ukraine agreed to introduce export measures to avoid grain surges (European Commission, 2023). Nevertheless, Poland administered a unilateral ban on selected products and their derivatives (gov.pl, 2023b), which led Ukraine to file a complaint with the World Trade Organization (WTO, 2023). While the ban still applies (gov.pl, 2025), the Polish government has on multiple occasions actively sought to convince the EU to include wheat (and other grains) among the crops covered by the quotas under the EU-level 2022 regulation on temporary trade liberalization with Ukraine (the Autonomous Trade Measures Regulation; OKOpress, 2024; European Commission, 2024).

Conclusions

Considering the current approach by the U.S. administration under President Donald Trump, Ukraine’s position in the prospective negotiations will strongly depend on the support it can gather from its European allies. This in turn is likely to reflect the sentiments towards the Ukrainian cause among European voters. In Poland, where critically important presidential elections are scheduled for May 2025, the importance of these sentiments might be particularly salient. On the one hand, the candidates are likely to voice support for Ukraine to secure peace and stability in the region. On the other hand, they may appeal for support among voters who are critical of the generous approach of Polish public institutions towards Ukrainian refugees.

As shown in this policy paper, the critical voices highlighting instances of abuse of privileges granted to refugees are largely unfounded, and much of the critical discourse is linked to – in our view – highly inaccurate numbers of officially registered refugees with the PESEL-UKR status system. The government would do a service to the quality of the debate about Ukrainian refugees in Poland, and at the same time defuse some of the critical claims, by verifying the PESEL-UKR database.

Using administrative data on school enrolment and benefit claims we show that these match almost perfectly, with around 150 000 children aged 7-17 in both registries in late 2024. This is far less than the 270 000 children in this age group registered in the PESEL-UKR database and assumed to be residing in Poland. Similarly, survey data suggests that about 70 percent of Ukrainian refugees are active on the Polish labour market. This proportion is much lower when official data based on social security contributions is compared to the total number of adult refugees in the PESEL-UKR registry. The comparison once again suggests that the figures in the latter database are significantly overstated. It is thus very unlikely that the number of Ukrainian refugees in Poland is as high as the numbers officially reported in the registry (992 000 in January 2025).

The accuracy of the numbers is important for several reasons, and the ability to address various critical claims in the public debate is only one of them. At the time of an electoral campaign ahead of a highly significant presidential election, this reason, however, may prove fundamental to avoid further polarization of the debate about continued support for Ukrainian refugees in Poland. It is also crucial for securing strong support for Ukraine by the Polish government in the coming challenging months of peace negotiations. While it is likely impossible to restore the level of positive attitudes toward Ukrainian citizens seen in Poland in February and March 2022, that degree of solidarity should serve as a foundation for a deepened relationship between the two countries.

Acknowledgement

The authors acknowledge the support from the Swedish International Development Cooperation Agency, Sida. We are grateful to Patryk Markowski for helpful research assistance. The Polish Household Budget Survey data (2022, 2023) used in the analysis was provided by Statistics Poland (Główny Urząd Statystyczny). We are grateful to the Social Insurance Institution ZUS (Zakład Ubezpieczeń Społecznych) for providing us with unpublished data on child benefit recipients.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Development Day 2024: Integrating Ukraine, Moldova, and Georgia into the European Union

Flags of Ukraine, Moldova, and Georgia alongside EU flags in a conference setting.

For Ukraine, Moldova, and Georgia, integration into the European Union (EU) is a pathway to modernization, economic development, and increased resilience against authoritarianism. At this year’s Development Day Conference, hosted by the Stockholm Institute of Transition Economics (SITE), policymakers, researchers, and experts convened to discuss the shared challenges, opportunities, and reforms required for these countries’ successful EU accession.

This policy brief draws on the insights from the conference, briefly outlining the discussions across panels and presentations on governance reforms, hybrid threats, economic transformation, and security challenges.

The Geopolitical Context for Enlargement

The Russian invasion of Ukraine has intensified the European Union’s strategic focus on enlargement. Ukraine, Moldova, and Georgia find themselves at a crossroads, where integration into the EU is not merely aspirational but essential for safeguarding sovereignty and ensuring economic and political stability. The urgency of this enlargement stems from the need to counteract Russian aggression and bolster the EU’s geopolitical standing.

At the opening sessions of the Development Day Conference, three special guests offered their respective countries’ perspectives. Yevhen Perebyinis, Ukraine’s Deputy Minister of Foreign Affairs, underscored how Ukraine’s integration process aligns with its defense of European values against Russia’s aggression. Cristina Gherasimov, Moldova’s Deputy Prime Minister for European Integration, highlighted Moldova’s efforts to advance reforms while countering persistent Russian hybrid threats, including systematic election interference. Christian Danielsson, Sweden’s State Secretary to the Minister for EU Affairs, accentuated the necessity of ensuring that the EU is ready for enlargement, something political leaders now see as an imperative in the shadow of Russia’s war on Ukraine. Similarly, discussions emphasized Georgia’s historical and policy-oriented commitment to Europe, despite recent democratic backsliding and a recent pivot toward Russia.

Challenges on the Pathway to EU Accession

The integration paths of Ukraine, Moldova, and Georgia face numerous challenges. Critical areas for alignment with EU standards include governance reforms, anti-corruption efforts, and institutional capacity building. Moldova has made strides in public administration reform and jumped significantly on the Corruption Perceptions Index from 120th place in 2019 to 76th in 2023. However, persistent gaps in judicial independence and public procurement transparency remain hurdles. Similarly, Ukraine has enacted sweeping reforms under extraordinary wartime circumstances, reflecting a persistent and widespread commitment to European values. Yet, continued progress in judicial and financial oversight is essential, with the administrative framework in these areas needing improvement in both countries.

Russia’s hybrid warfare poses a persistent and evolving threat to democratic resilience across the region. Moldova’s elections in 2024 showcased large-scale, sophisticated interference by Russian actors. This interference began well before election day and continues in the form of disinformation campaigns and energy blackmailing in the Transnistria region. In Georgia, Russian influence compounds the challenges of domestic political unrest, particularly as the ruling party engaged in substantial electoral fraud and manipulation to secure its position in the 2024 October elections. These challenges highlight the need for robust countermeasures, including enhanced cybersecurity and strengthened democratic institutions across the candidate countries. It also points to the need for support from the international community, especially in the case of Georgia, where protesters are currently taking to the streets to challenge the widely recognized electoral fraud.

Economic transformation and alignment also remain a critical challenge. Ukraine’s economy, suffering wartime devastation, requires extensive reconstruction, with the cost of infrastructural damage alone nearing its annual GDP. Ukraine’s vast agricultural sector, a major player in global markets, will require careful integration into the EU to address compliance costs and alignment with the Common Agricultural Policy while maintaining its competitive edge. Moldova faces significant challenges in effectively communicating the benefits of EU integration to its population, a critical issue in countering Russian influence and maintaining public support for reforms. Despite clear economic progress, such as the increase in Moldovan exports to the EU, many Moldovans remain skeptical about the long-term benefits of EU alignment. This skepticism is particularly pronounced in regions like Gagauzia, where pro-Russian sentiment is strong and local populations are vulnerable to disinformation and propaganda.

As emphasized by multiple panelists, targeted communication strategies are vital to ensuring that the benefits of EU integration are understood across populations. Concrete examples—such as enhanced economic opportunities, improved infrastructure, and access to EU funding—must be clearly communicated to counteract Russian narratives and build broad-based support for EU accession.

In this regard, pre-accession funding offers a potentially transformative tool. The successful use of pre-accession funding in Poland in the 1990s and early 2000s demonstrates the potential for such resources to modernize infrastructure, connect markets, and build institutional capacity, a capacity that has later proved pivotal to overcoming democratic backsliding. Poland serves as a reminder that alignment and integration may take time, but also clearly showcases the economic and social benefits it can yield.

During the conference, security concerns were at the core of the enlargement discussion, with several panelists emphasizing NATO’s historical role as a critical security complement for EU member states. However, Ukraine’s potential EU accession may advance without parallel NATO membership. This raises significant challenges, as the absence of NATO guarantees leaves Ukraine vulnerable to further Russian aggression. Panelists highlighted the urgent need for the EU to adopt concrete security measures, such as strengthened hybrid defense capabilities, cybersecurity frameworks, and coordinated responses to disinformation—threats already witnessed in Moldova and Georgia. Additionally, ensuring Ukraine’s security would require increased military and financial support from EU member states to safeguard territorial integrity and maintain resilience against Russia, argued a necessity by several panelists.

The Opportunities of Enlargement

The integration of Ukraine, Moldova, and Georgia into the European Union offers profound opportunities for these states. It represents access to the single market, pre- and post-accession funding, and vital structural support that can accelerate modernization efforts. Overall, this can reduce the countries’ infrastructure gaps and cause an increase in foreign direct investment. Beyond economic gains, EU support drives crucial institutional reforms, enhances public administration capacity, and provides a framework for addressing corruption and strengthening the rule of law—key challenges across all three countries.

For the EU, enlargement would entail strategic benefits aligned with its new geopolitical focus and long-term economic goals. Ukraine’s reserves of critical raw materials, including lithium and titanium, are essential for Europe’s green transition. Furthermore, Ukraine and its defense industry offers strategic benefits to Europe by bolstering collective security. Its agricultural capacity remains pivotal not only for the EU but for global food security, and its IT sector provides additional growth potential. Moldova and Georgia, on the other hand, offer untapped market potential and workforce integration opportunities, which could strengthen the EU’s competitive edge. Enlargement also represents a critical opportunity to counter the threat from Russia, manifesting the Union as a geopolitical leader committed to stability, democracy, and shared values.

However, as voiced throughout the conference, the EU must prioritize clear communication of these benefits. Concerns about increased competition in existing member states need to be met with transparency while communicating the long-term economic and security advantages of enlargement. Involving the business perspective in the enlargement process and ensuring that both candidate countries and current EU citizens and businesses see tangible benefits early in the process will be key to sustaining both momentum and public support. Such messaging could include the fact that the EU is originally a peace project and that the counterfactual scenario to the current enlargement ambitions is Russia and its wars creeping even closer to the Union’s border. In regard to the business sector, it could be emphasized that enlargement associated risks can be met with risk sharing instruments and credit guarantees.

As emphasized by several speakers, the EU also needs to ensure that it is ready for enlargement in terms of capacity. As the EU was not initially built to be this large, a further expansion requires the Union to critically reflect on how to ensure it will stand up for the rule of law and all member states’ adhesion to EU principles in the years to come.

Concluding Remarks

How to facilitate the accession of Ukraine, Moldova, and Georgia into the European Union was the topic for discussion at the 2024 Development Day. The discussions highlighted the substantial early progress and rapid reforms undertaken by Ukraine while being a country at war. Moldova’s steady progress toward its ambitious 2030 accession target underscores its commitment to reform, though challenges remain in securing public trust and countering Russian interference. Georgia, meanwhile, serves as a warning of how quickly democratic gains can erode, with political turmoil and Russian influence threatening its European path. These examples underscore the need for sustained support and clear communication of the benefits of EU integration. Panelists and participants also underscored that integrating these nations is not merely about expanding the EU—it is a vital response to ongoing geopolitical threats, in particular from Russia, and an affirmation of the EU’s foundational values.

Ultimately, the enlargement of the EU to include Georgia, Moldova and Ukraine holds significant potential, both for the aspiring members and the EU itself. However, as the discussions at Development Day 2024 showcased, such enlargement requires robust partnerships, unwavering and early support, and a recognition that integration strengthens the EU as a whole, ultimately positioning the EU as a much-needed major democratic geopolitical actor.

List of Participants

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.