As of: March 28, 2024, 11:33 a.m
By: Lisa Mayerhofer
Comments
Press
Split
Ukraine needs a lot of money to survive in the war against Russia. But in the EU the decision-making processes are lengthy. An economist has a proposed solution.
Brussels – After months of discussions, the EU countries finally agreed in March on joint military aid for Ukraine worth five billion euros for 2024. But can it be faster? Economist Torbjörn Becker, director of the Stockholm Institute of Transition Economics (SITE), has a suggestion – which could be implemented quickly.
Economist: Russian money as leverage for larger sums for Ukraine
Ukraine needs the funds now, emphasized Becker in an interview with
Spiegel.
“That’s why we should make the most of the resources available to Ukraine that are already available to us today.”
The EU actually wants to skim off around three billion euros in revenue per year from frozen Russian central bank billions and use it to finance a new, large fund. However, in an interview with the magazine, Becker argues that the three billion euros are not enough to make a difference for Ukraine.
Ukraine has been fending off a Russian invasion for more than two years now. © Efrem Lukatsky/AP/dpa
He suggests: “Europe should therefore use this money as leverage to release a much larger sum now: EU states should take on debt and use it to fill a fund, but pay the annual interest costs with skimmed profits. The costs for the EU would initially be zero, but the three billion would be enough to fill the fund with up to 150 billion euros. This money would then be available to Ukraine in a reliable manner.”
According to Becker, one advantage would be that Kiev would finally have planning security “instead of constantly having to worry about whether money will be released or not.” And when it comes to repaying the money, Russia's economist has frozen billions in mind. “That would have to be negotiated with Ukraine, they have a claim to the Russian money, not Europe,” he tells Spiegel. “Such a construction would also create an incentive for the Europeans to actually work towards confiscating Russian assets in the coming years.”
Because then the EU finance ministers would be “breathing down their own MPs’ necks so that they can find a regulation,” Becker told the magazine. “Otherwise they would have to pay for the loans themselves. That’s a strong incentive.”
My news
Nasty scam with the Rosenheim cops: Actors pack with atrocities read out in their name
1 hour ago
Flixbus accident on A9 near Leipzig: Witnesses report bus accident - police correct reading of victim numbers
She had planned Gottschalk's visit to BR completely differently: Schöneberger lost his composure
“Brazen” Ukrainian attacks in Russia? Ex-US general warns of “terrible recommendation” read
Strong earthquake in Italy and Austria: Read “Heard a terrible bang”.
Princess Kate has cancer – this is how Victoria of Sweden and Mette-Marit of Norway react
EU: Eternal back and forth on aid and money for Ukraine
But things are not yet so quick and uncomplicated: it was only in March that the EU countries reached an agreement in principle on the five billion for Ukraine. The EU wants to ensure that Ukraine “receives the military equipment it needs for its defense,” explained Belgium, which is leading the Council of Ministers this semester.
The member states therefore agreed on a reform of the so-called European Peace Facility (EPF). This is a pot outside the EU budget through which member states can obtain partial reimbursement for arms deliveries to Ukraine. As the largest economy, Germany finances the fund at 25 percent.
The EU foreign policy chief Josep Borrell had originally called for a commitment of 20 billion euros by 2027. That would have meant a new contribution of five billion euros for the federal government. However, in view of tight budgets, Chancellor Olaf Scholz (SPD) urged that bilateral German military aid to Ukraine worth more than seven billion euros be taken into account this year alone. According to diplomats, this is now fundamentally possible.
France had also demanded that the pot only be used to finance weapons made in Europe. Other countries consider this unrealistic. As a compromise, according to information from Brussels, weapons from European defense companies should now have priority. When capacity is exhausted, purchases are possible in third countries such as the USA or South Korea. In addition, at the beginning of February, the EU countries had already agreed on further economic aid for Ukraine worth 50 billion euros.
With material from AFP