The President of the European Commission, Ursula von der Leyen, announced, on Sunday 6 November, during a telephone conversation with the Ukrainian President, Volodymyr Zelensky, that the Commission would present this week a substantial EU financial package of up to €1.5 billion per month, totalling up to €18 billion.
This amount should contribute “significantly to cover Ukraine’s financing needs for 2023”, the Commission said in a statement, adding that the two leaders had recognised the importance of ensuring predictable and regular funding of essential state functions.
The support in the form of highly concessional long-term loans, with coverage of the interest costs, would also “work to support Ukraine’s reforms and its path towards EU membership”, the Commission said.
While the question of how to provide a public guarantee (EU budget or national budgets) has yet to be decided (see EUROPE 13057/1), the Hungarian Foreign Minister, Péter Szijjártó, has already warned that his country would not accept the EU taking out a loan to support Ukraine financially.
The EU financial package should be matched by similar support from other major donors, according to the Commission.
Since the beginning of the Russian invasion on 24 February 2022, of the €9 billion proposed by the Commission, 1 billion was disbursed in August, 2 billion in October and 3 billion are expected to be disbursed by the end of the year. Work on the remaining 3 billion is ongoing, according to the Commission (see EUROPE 13056/9). In addition, on top of this plan, the Commission had proposed for 1 February, €1.2 billion in emergency macro-financial assistance (see EUROPE 12881/15).
Speaking to MEPs on the European Parliament’s Committee on Foreign Affairs, the European Commission’s Deputy Director-General for the Eastern Neighbourhood Policy, Katarina Mathernova, said, on Monday 7 November, that in addition to military assistance, it was necessary to ensure that “Ukraine is in a position to survive economically” with macroeconomic assistance to safeguard the balance of payments and repair critical infrastructure.
Michael Siebert, Managing Director for the Eastern Partnership at the European External Action Service, claimed that “Ukraine has safeguarded the functioning of the country in an amazing way. Reconstruction and repair are omnipresent”. “We are already in the middle of the reconstruction efforts and we need to think about what the structure of the reconstruction will be in the much longer term. You have to have the money there where you need it”, he explained. Mr Siebert said that the country’s reforms were a prerequisite for the disbursement of the “considerable sums” that would be needed over the years for reconstruction.
While Mick Wallacem (The Left, Irish) stated that giving loans that Ukraine will never be able to repay will make it poorer, Márton Gyöngyösi (NI, Hungarian) claimed that there should be a treaty-based model, where Russia would be responsible and have a legal obligation to pay the bill for reconstruction, as was the case after the Second World War with Nazi Germany.
While supporting financial aid to Ukraine, several MEPs questioned the control of these funds, expressing concern about corruption in the country. “Given that we are going to spend a lot of money on a country plagued by corruption, are there certain structures (to control), can we be sure that the money is used wisely and reassure our own citizens?”, asked, for example, the rapporteur on Ukraine, Michael Gahler (EPP, German).
But Ms Mathernova sought to reassure, saying that while she could not say that there was no corruption in Ukraine, there was, in her view, “a systematic effort by Russia to paint a profile of Ukraine that persists in our rhetoric”. “It is a functioning state. If it were so corrupt, it would fall like a house of cards”, she said. The Commission representative said that there was a very rigorous control of the funds and that civil society was functioning well and playing a “very serious” role as guarantor.
However, as Dietmar Köster (S&D, German) pointed out that, according to Transparency International’s June 2022 Corruption Perceptions Index, Ukraine ranked 122nd out of 180 countries.
In addition, during her conversation with Mr Zelensky, Ms von der Leyen promised that the EU would continue to provide immediate humanitarian assistance to Ukraine, especially during the winter (see other news).
The two leaders also discussed the importance of ensuring that Ukrainian agricultural exports can leave the country. In particular, they discussed plans to expand the capacity of the EU-Ukraine solidarity lanes, which have so far been used to transport the vast majority of Ukrainian agricultural and non-agricultural exports since the start of the war with Russia.
Finally, the leaders discussed the strengthening of sanctions and the negative role played by Iran’s support for Russia’s aggression and how to respond. The EU has already adopted sanctions against Tehran in this context. (Original version in French by Camille-Cerise Gessant)