This case study examines Ukraine’s critical minerals sector, which encompasses lithium, titanium, graphite, cobalt, and rare earths, and asks: How does EU-Ukraine integration shape whether Ukraine becomes a mere raw material supplier or successfully moves up the value chain into midstream processing and advanced manufacturing?
EU regulatory harmonization and market integration generate contradictory externalities. Positively, Ukraine gains access to massive green transition investments, European industrial alliance participation, and technology transfer through Joint Important Projects of Common European Interest (IPCEIs). Negatively, integration risks locking Ukraine into extractive activities while value-added processing concentrates in existing EU industrial centers—reproducing classical core-periphery patterns where Ukraine supplies raw materials for German battery plants or Polish refineries.
EU-level dynamics: Key actors include DG GROW (industrial policy), the European Investment Bank, and multinational mining/processing firms. The Critical Raw Materials Act, strategic partnership agreements, and Industrial Alliance on Raw Materials represent governance tools. However, these mechanisms currently prioritize securing European supply chains over developmental upgrading in supplier countries. Transitional regimes allowing Ukraine to deploy strategic export restrictions or domestic content requirements could mitigate extractive lock-in.
Domestic dynamics: Ukrainian capacity to leverage its geological endowment depends on building state capacity for strategic sector planning, navigating oligarchic control of mineral assets, and mobilizing pro-developmental coalitions linking state institutions, reformist business actors, and labor. Regional disparities in mining regions require place-based industrial strategies.
Policy Implications
Drawing on Asian developmental state experiences, Ukraine needs “electrostate” policies coupling resource extraction with mandatory local processing requirements, strategic joint ventures transferring technology, and EU support for integrated battery/renewable energy manufacturing ecosystems rather than pure extraction.
Inna Melnykovska, European University Institute (Florence)
This research is interested in the economic and political development of the EU-funded digital growth coalition of Ukraine. The Ministry of Digital Transformation (MDT) sits at the center of this coalition. The MDT has gained strong political capital through the launch of Diia platform, which consolidates identity documents, public services, and social support into a single app. However, the concentration of essential services in a centralized digital system also creates vulnerabilities: cybersecurity threats, potential abuse of state data, and risks of excluding those without digital literacy, reliable internet access, or modern smartphones. The Ministry’s push for efficiency thus carries the danger of reinforcing social divides and undermining inclusivity.
On the private sector side, Monobank exemplifies the fusion of fintech innovation with state-led digitalization. Its app-based banking model, closely integrated with Diia, encourages cashless transactions and expands financial inclusion. Yet, it also risks deepening financial exclusion among the elderly, rural populations, or those dependent on cash economies. Monobank’s rapid growth illustrates how fintech can benefit from integration into state-led platforms, but also highlights the risk of private actors capturing new digital rents, concentrating financial power, and aligning too closely with political agendas.
European development banks like the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) reinforce the coalition by supplying capital, technical expertise, and regulatory guidance. Their investments in broadband rollout, e-governance, and fintech strengthen Ukraine’s capacity to align with the EU’s Digital Single Market. Yet reliance on these institutions also generates structural dependencies: reforms are shaped by external funding conditionalities and European regulatory frameworks, potentially prioritizing integration goals over domestic social needs. International technology corporations, which provide cloud infrastructure and cybersecurity services, further embed Ukraine in global digital supply chains, raising questions about sovereignty and long-term autonomy. Civil society organizations add democratic legitimacy to this coalition, advocating for accessibility and accountability. Yet, their capacity to influence strategic decisions remains limited compared to state, financial, and private sector actors. This imbalance raises concerns about whether the coalition serves broad societal interests or primarily benefits elites and investors aligned with EU integration.
Taken together, Ukraine’s digital growth coalition—anchored in Diia, Monobank, the MDT, and supported by EIB/EBRD—drives modernization and accelerates European integration. But it also produces new inequalities and vulnerabilities: the exclusion of digitally marginalized groups, financial inequality from fintech-driven market concentration, and risks tied to over-reliance on centralized systems and international funding. As Ukraine advances toward the EU, the sustainability of this coalition will depend not only on efficiency and investment, but also on addressing the social and political risks embedded in digital transformation.