EU to provide EUR 50 billion aid to Ukraine
The European Commission is proposing that EU Member States provide a total of €50 billion in grants and loans to Ukraine over the next four years (2024-2027) to help rebuild the country, Brussels President Ursula von der Leyen said on Tuesday.
According to von der Leyen, the facility proposed in the context of the multiannual financial framework will allow the EU to calculate aid to Ukraine according to the developments in the war.
The European Commission said it is proposing to establish
a dedicated financing instrument that will provide coherent, predictable as well as flexible support for the period 2024-2027 to Ukraine, adapted to the unprecedented challenges of supporting a country at war.
The assistance will be administered through grants and loans. The reserve aims to provide Ukraine with "perspective and predictability" as well as incentivize other donors to step up their support.
It will allow us to calibrate our financial support according to the evolution of the situation on the ground because we all know that a war requires at most flexibility from us,
von der Leyen said at a press conference.
- Grants will be mobilised through a new special instrument, proposed in the context of the Multiannual Financial Framework (MFF) mid-term review.
- The loans will be guaranteed through the headroom, similar to the current financing under the Macro Financial Assistance ‘Plus' (MFA+).
"The headroom is the difference between the own resources ceiling (i.e. the maximum amount of resources that the Commission can ask Member States to contribute in a given year) and the funds that the Commission actually needs to cover the expenses foreseen by the budget."
The Facility also opens the possibility to use contributions from other donors as well as revenue generated by frozen and immobilised Russian assets as a contribution to Ukraine's recovery and reconstruction. Work is ongoing on the possible use of Russian assets for Ukraine's recovery and reconstruction.
Speaking about migration, President von der Leyen underlined the need for urgent, fast responses.
“We are proposing to equip our Member States with financial support to strengthen the management of our external border. We need to work more intensively with our neighbourhood to foster their economic development, to stabilise those countries. We need to enhance our international partnerships”, she said, adding that EUR 15 billion would be needed to cater to these aspects.
The EC President also said that the EU aims to boost investments to strengthen its technological edge to EUR 160 billion partly by combining existing funds with new money and leveraging them.
She said that the Commission had identified three sectors of priorities that are critical to preserve the bloc's competitive edge - deep tech, clean tech and bio tech and proposed to create STEP (A Strategic Technologies for Europe Platform).
She added that the commission would introduce a trade barrier against non-EU countries, focusing on a "limited and narrow range of high-technologies" in order to preserve its own competitiveness.
According to the President, "globalisation and the open economy are good for Europe economically, but we also see that the world has become more contested and geopolitical. And there is a limited set of key technologies that can be used in a different and in an aggressive way. This is why the topic of economic security has become a priority for us and for many of our partners," she stressed.
Cover photo: Getty Images
