Athens, 01/04/2014 (Agence Europe) - Europe's money men are worried about how the Ukrainian crisis may impact on the European economy.
On Tuesday 1 April, the head of Eurogroup, Jeroen Dijsselbloem, said that the ministers did not discuss the economic impact on the European economy of the tension in Ukraine. Euro Commissioner Olli Rehn said the impact would be relatively limited. Early in March, the head of the ECB, Mario Draghi, said that European banks' exposure was only 1% (see EUROPE 11030).
At the end of March, the European Commission offered macrofinancial aid of €1 billion to Ukraine, in addition to the already earmarked €610 million (see EUROPE 11042). The aid is conditional upon the introduction of structural reforms, one of the most symbolic of which is reducing public subsidies for gas without causing too many problems for the poorest sections of the population. Half a billion of the planned aid will have the same conditions attached as for the aid package recently agreed with the International Monetary Fund (see EUROPE 11048). The European Commission is currently negotiating with Kiev the strings to be attached to the remaining half a billion.
Over breakfast, the ECOFIN Council discussed the second macrofinancial aid package before it was put on the negotiating table. It is expected to be formally approved next week by member states' representatives to the EU on the COREPER committee and then by a future meeting of European ministers.
Rehn said the EU was not trying to force Ukraine to choose between the EU and Russia, but he did compare the growth in per inhabitant GDP in Poland and Ukraine since the fall of the Berlin Wall. Per capita wealth was identical in the two countries in the early 1990s, but it is now two and a half times higher in Poland than in Ukraine because, he said, joining the EU had attracted foreign investment into Poland. (MB)