Czech minister hits out at Brussels after financial support package gets mired in internal negotiations
By James Crisp, EUROPE EDITOR 8 November 2022 • 9:16pm
It is “very difficult” to look Ukrainians in the eye and explain why the EU has broken promises to send billions of euros in financial support to Kyiv, the finance minister of the Czech Republic said on Tuesday.
At a meeting in Brussels, Zbynek Stanjura urged his fellow EU finance ministers to ensure a new aid package of €18 billion is approved in time for payments to start next year.
Brussels has only sent €3 billion of the promised €9 billion in financial assistance it pledged to Ukraine in May, with the money mired in negotiations between EU countries.
“It’s very difficult to look the Ukrainian ministers in the eye,” Mr Stanjura told reporters after the EU finance ministers meeting, “and explain to them why we’re incapable of honouring the promises made by our heads of state and government.”
Kyiv is struggling to fill a massive black hole for basic services and cover its budget deficit during Russia’s brutal invasion. The International Monetary Fund estimates Ukraine will need from €3 billion to €4 billion in foreign aid a month for its public services alone.
“We expect the next payment of two and a half billion euros to reach Kyiv by the end of this month,” said Valdis Dombrovskis, the European Commission’s executive vice president.
The final tranche of the €9 billion now appears certain to be sent in the new year and far later than Ukraine’s president wished.
Volodymyr Zelensky told EU leaders at last month’s European Council summit that the remaining €6 billion was “critically needed this year”.
EU officials said the bloc had sent €19 billion for Ukraine in loan and grants, this year but that does not include May’s emergency assistance.
The European Commission now plans to send €1.5 billion a month in loans and grants to Kyiv next year, instead of the current case-by-case approach, to prevent a cashflow crisis.
The money is being raised on capital markets by the Commission rather than being taken from the EU Budget. This fresh common debt will then be transferred to Ukraine in the form of loans tied to policy goals such as respect for the rule of law.
That will mean the aid is not on the EU’s books of normal spending and prevents the need for national governments to take the loans on their books.
The “more structural” system will aim to make its first payment in January once it is approved by EU governments and the European Parliament, Mr Dombrovskis said, and will aim to lock in support for Kyiv, which hopes to one day join the EU.
‘Winter is coming’
“The main thing is to speed up the aid now,” Annika Saarikko, Finland’s finance minister, told Euronews, “The winter is coming and the situation is not easy.”
“The Netherlands and the EU have been and will continue to be unequivocal in our support for Ukraine,” Sigrid Kaag, the Dutch finance minister, told The Wall Street Journal.
“We expect the latest proposal to provide further clarity and predictability in the EU’s financial support to the Ukrainian government.”
However, the proposal will need the support of all 27 member states because it needs a change in EU budget plans and Hungary is expected to threaten to use its veto.
Viktor Orbán, the Hungarian prime minister, is locked in a series of battles with Brussels over blocked EU funds over rule of law concerns and his opposition to EU sanctions on Moscow.
“Hungary is ready to continue its financial support to Ukraine on a bilateral basis, but under no circumstances will we agree to the EU taking out credit to pay for this purpose,” Peter Szijjarto, its foreign minister, said on Monday.