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© Reuters. FILE PHOTO: General manager of the German Eastern Business Association (OAOEV) Michael Harms is pictured during an interview with Reuters in Berlin, Germany, October 16, 2019. REUTERS/Fabrizio Bensch

BERLIN (Reuters) – German companies active in eastern European have called on the government in Berlin to take on more risk and provide increased security for business in Ukraine, particularly for transport.

The situation is especially acute when it comes to transport liability insurance as reinsurers have withdrawn from the market, which poses a problem for logistics companies, said Michael Harms, managing director of the German Eastern Business Association.

“The federal government has to take on more risk than usual,” Harms said, and it “shouldn’t relieve companies of business risk but should help with creative instruments.”

The association’s demand follows German Economy Minister Robert Habeck’s promise during a visit to Kyiv this week to provide German companies investment guarantees in Ukraine as part of reconstruction efforts. Russia’s February 2022 invasion of Ukraine has caused large-scale damage.

The group supports roughly 350 members who are active in 29 countries in eastern Europe.

“Company representatives say that these investment guarantees are necessary in order to get investment decisions through the board of directors,” said Harms, who travelled with Habeck to Kyiv. More than 20 applications for such investment guarantees are in the pipeline, ministry sources said.

In addition, the Ukrainian government needs to provide “reliable, stable and transparent framework conditions,” said Harms, who criticized Kyiv for putting pressure on many companies to abandon business in Russia, calling it “not wise.”

He added that the corruption situation has improved significantly since 2014 and things are going in the right direction, based on feedback he has received from companies.

“The Ukrainian leadership is young, Western-educated, it no longer has a ‘hidden agenda’ as it used to,” he said.

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