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“It is time that we stop discussing different options and move forward”, European Commissioner for Economy and Productivity Valdis Dombrovskis told Euronews’ Europe Today.
Dombrovskis spoke with Euronews on Wednesday about how the EU should finance Ukraine’s €135 billion budget hole, as the country faces one of the most challenging moments in its history amid the nearly four-year-long Russian war.
The Latvian Commissioner believes that a reparation loan guaranteed by Russian frozen assets in Europe is “what can provide sizable support for Ukraine without putting additional and substantial fiscal burden on the EU or its member states”.
Earlier this month, the European Commission prepared an options paper outlining various funding options to support Ukraine’s fight against Russian aggression.
Voluntary bilateral contributions by member states, issuance of joint EU-level debt, and a reparations loan based on Russia’s immobilised assets are the options envisaged by Commission President Ursula von der Leyen and offered to EU leaders.
“Other options are more costly for the member states, because it’s clear that Ukraine is facing debt sustainability issues, so we cannot just go on providing another loan to Ukraine”, Dombrovskis said.
Commissioner in charge of the 27-member bloc’s economy doubled down on the need to support Ukraine and had a clear message for the Belgian government, which hosts most of the assets frozen in the EU and the main holdout to a reparations loan due to the fear of compensation claims by Moscow.
“If you give on to bullying, you will face more bullying. We need to stand up against that pressure”, he said, while acknowledging that the discussion among the member states is going to be very difficult.
‘Appeasement only creates more aggression’
The debate over the use of frozen assets is closely intertwined with that over the EU’s role in a possible peace deal in Ukraine. The 28-point peace plan drafted by the US and Russia to end the war in Ukraine stunned Europeans with its provisions perceived as too favourable for Moscow.
Some EU countries drafted a counterproposal calling for a ceasefire along the current front lines, with no additional territorial concessions and security guarantees for Ukraine, but the Kremlin dismissed it.
While negotiations are ongoing, today in Strasbourg, the European Commission President Ursula von der Leyen is addressing the European Parliament on the matter, and EU foreign policy chief Kaja Kallas convened an extraordinary informal video conference of the bloc’s foreign ministers.
Dombrovskis draws clear red lines in the EU position: “We have set important parameters from the European Union side: respect for territorial integrity; the fact that Ukraine’s military capacity is not restrained (in a way that makes it) vulnerable to further attacks; and also that Ukraine’s EU integration is at the centre of the post-war settlement.”
Asked if he fears that Russia could invade EU countries after Ukraine, he was also very clear. “We know from history that appeasement of the aggressor only creates more aggression. Russia is openly talking about invading other countries, including EU and NATO countries,” Dombrovskis said.
“It means that if Russia feels vindicated by the results of this war, it will only create more aggression, and this war will spread.”