Wednesday

20th Sep 2017

Barroso proposes €11bn to 'stabilise' Ukraine

  • Barroso: 'the situation in Ukraine is a test of our capability and resolve to stabilise our neighbourhood' (Photo: ec.europa.eu)

European Commission head Jose Manuel Barroso has proposed almost €11 billion in new money to help stabilise post-revolutionary Ukraine.

With EU leaders at an emergency summit in Brussels on Thursday (6 March) to discuss his ideas, he said on Wednesday: “I think everybody knows what is at stake here: For the first time in many years, we in Europe feel a real threat to our stability, and even to peace on this continent.”

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

He added: “Ladies and gentlemen, the situation in Ukraine is a test of our capability and resolve to stabilise our neighbourhood.”

One billion euros of the new money is to come in the form of loans, paid from the EU budget, for Ukrainian macro-financial assistance.

Another €1.4 billion will come as EU grants over the next seven years. The European Investment Bank is to contribute €3 billion over 2014 to 2016 and the European Bank for Reconstruction and Development is to add €5 billion.

In other measures, the commission will add a previous pledge of €610 million of macro-financial loans. It will also try to leverage €250 million of previously-earmarked Ukraine cash to raise over €3.5 billion in loans.

Barroso noted the money will be conditional on reforms already set out by the International Monetary Fund (IMF), which include raising household gas prices.

But in return, the IMF, the World Bank, EU member states, and other countries, such as Canada, Japan, South Korea, and the US are expected to top up the EU offer.

The EU's €11 billion is almost equal to a $15 billion bailout offered by Russia before the Ukraine uprising broke out, but the top-ups could see it climb much higher.

Meanwhile, Barroso said the macro-financial aid and some €600 million of the new grants can be paid out “very fast … within a matter of weeks.”

He also proposed that EU countries should immediately apply lower trade tariffs on Ukrainian imports, as envisaged in a future free trade agreement.

He urged the Union to also get ready to pump gas to Ukraine in “reverse flows” through Soviet-era pipelines to reduce its dependency on Russian imports.

The commission offer and the EU summit come after a popular revolution toppled Ukraine’s former president Viktor Yanukovych in February, prompting Russian forces to occupy Ukraine’s Crimea region.

EU countries are expected to trigger an asset freeze and visa bans on Yanukovych, his two sons, and 15 other former regime members on Thursday morning.

They have threatened to impose similar measures against Russia if it does not pull back troops in Ukraine, but an EU diplomat said it is “too early” to draft a list of Russian names at this stage.

EU leaders on Thursday are also likely to call for international, but not EU, monitors in Crimea, after Germany, Italy, and the UK, spoke out against an EU mission at a foreign ministers’ meeting on Monday.

For its part, the Russian parliament is drafting a bill to let the Kremlin confiscate European companies’ assets if the EU goes ahead.

The EU diplomat said the result of the summit will depend, to an extent, on the outcome of talks between the British, French, German, Russian, and US foreign ministers in Paris on Wednesday.

The contact added: “There is interdependence. If we are going to enter a real sanctions game, a pain game, then it is difficult to say which side will hurt more.”

Opinion

Ukraine: The Empire strikes back

If the international community allows Russia to partition Ukraine despite the Budapest treaty, it will send a terrible signal.

Stakeholders' Highlights

  1. EU2017EEFour Tax Initiatives to Modernise the EU's Tax System
  2. Dialogue PlatformResponsibility in Practice: Gulen & Islamic Thought
  3. Counter BalanceHuman Rights Concerns Over EIB Loan to the Trans Anatolian Pipeline Project
  4. Mission of China to the EUChina Leads the Global Clean Energy Transition
  5. CES - Silicones EuropeFrom Baking Moulds to Oven Mitts, Silicones Are a Key Ingredient in Kitchens
  6. Martens CentreFor a New Europeanism: How to Put the Motto "Unity in Diversity" Into Practice
  7. Access MBAGet Ahead With an MBA Degree. Top MBA Event in Brussels
  8. Idealist QuarterlyIdealist Quarterly Event: Building Fearless Democracies With Gerald Hensel
  9. Mission of China to the EUPresident Xi Urges Bigger Global Role for Emerging Economies
  10. EU2017EEAre We Socially Insured in the Future of Work?
  11. European Jewish CongressFrench Authorities to Root Out "Societal Antisemitism" After Jewish Family Assaulted
  12. European Federation of Local Energy CompaniesClean Energy for All? On 10.10 Top-Level Speakers Present the Clean Energy Package