Attack on Ukraine: EU wants to create solidarity fund

The EU is planning a solidarity fund for post-war reconstruction in Ukraine. This emerges from a document that is available to the agencies dpa and Reuters. How much money should flow is unclear.

The EU is planning a solidarity fund for post-war reconstruction in Ukraine. This emerges from a document that is available to the agencies dpa and Reuters. How much money should flow is unclear.

The EU heads of state and government apparently want to launch an international fund for post-war reconstruction in Ukraine this week. This comes from a draft for the declaration for the summit meeting on March 24th and 25th, which is available to the news agencies Reuters and dpa. This should “promote the reconstruction of a democratic Ukraine as soon as the Russian attack is over”.

“Considering the destruction and huge casualties caused by Russia’s military aggression in Ukraine, the European Union is determined to support the Ukrainian government in its immediate needs,” it said.

Oligarch funds as reconstruction aid?

A Solidarity Trust Fund for Ukraine should be set up for this purpose. The preparations for this should be started “immediately”. The fund is said to initially ensure the functioning of the authorities and the continuation of defense efforts against Russia and emergency aid. In the long term, massive investments for the reconstruction of the economy could then be financed in order to anchor Ukraine economically in the West.

How much money should flow in is not mentioned. Some EU leaders have called for the use of Russian assets frozen by the West – including some $300 billion in central bank reserves – to help Ukraine rebuild. In the draft for the EU summit, the European Council calls for the organization of a donor conference.

National currency in free fall

EU Council President Charles Michel discussed the fund after a phone call with Ukrainian President Volodymyr Zelensky. The reason given was that Ukraine needed access to international liquidity to finance the import of daily necessities and military equipment.

Ukraine is currently effectively cut off from the international financial markets – the national currency, the hryvnia, has lost a lot of value. Under the current circumstances, the country is not in a position to issue bonds on the international financial market, Michel and Zelenskyj said in their phone call.