The European Union will provide Ukraine with 18 billion euros in financial aid for 2023, says von der Leyen

Continued support for Ukraine and the bloc’s strategic stance against China dominated discussions among European Union leaders on the second day of the summit on Friday.

European Commission President Ursula von der Leyen announced that the European Union intends to provide Ukraine with up to 18 billion euros in financial aid throughout 2023 to cover the basic needs of the war-torn country’s budget.

“It is very important for Ukraine to have a steady and predictable stream of income,” von der Leyen said at the conclusion of the two-day meeting of EU leaders in Brussels.

Ukrainian President Volodymyr Zelensky said earlier this month that his country would need about $55 billion (56 billion euros) to handle next year’s budget deficit and repair damaged infrastructure.

The International Monetary Fund (IMF) has estimated that by 2023 Ukraine will need between €3 billion and €4 billion in foreign aid on a monthly basis to keep its public services running against the backdrop of the Russian invasion.

The money is expected to come from the European Union, the United States, the United Kingdom and other Western countries, along with international financial institutions.

According to Ursula von der Leyen, the EU aims to contribute 1.5 billion euros per month, totaling 18 billion euros in 2023. The commission chief did not disclose further details and said work on the future package is still in its early stages.

“We have tasked the finance ministers with developing the appropriate mechanism, but it was important to give this signal to Ukraine that we know very well how important this reliable stream of income is,” von der Leyen told reporters.

So far, the bloc has committed 9 billion euros to Ukraine in exceptional loans to help the country support its 2022 budget. The money is raised by the Commission in international markets and then covered by guarantees using the EU’s common budget and national contributions.

But the release of this macro financial assistance has been bogged down by discussions among member states, some argue that the money should be given in the form of grants, not loans.

So far, only 3 billion euros I arrived in Kyivplus a separate loan of 1.2 billion euros, for a total of 4.2 billion euros.

In a hypothetical address to EU leaders, President Zelensky criticized the postponement of the remaining 6 billion euros.

“Thank you for the funds that have already been allocated, but the remaining 6 billion euros of this package, which are badly needed this year, have not yet been decided,” Zelensky said on Thursday.

“It is in your power to actually reach an agreement in principle on providing this assistance to our country today.”

Europe cannot be “naive” towards China

Another major topic for EU leaders today was China.

Despite occupying only one line in the nine-page conclusions issued at the end of the summit, the discussion between the leaders lasted three hours and was described by French President Emmanuel Macron as “very intense”.

“What emerged from these three hours of discussions is the consensus now on the need for European strategic independence,” Macron told reporters.

“We need strategic autonomy, and no one can dictate our policy, especially with regard to China, any more than can be part of some form of technological dependence on minerals and rare earths,” he added.

The exchange came behind closed doors just days after Xi Jinping secured an unprecedented third term at the head of the country and as concerns mounted over China’s recent aggressive behavior or rhetoric toward Hong Kong and Taiwan.

For European leaders, this was also an opportunity to refine their common positions ahead of the EU-ASEAN summit in mid-December.

Charles Michel said the discussions showed that “there is a very strong, very agreed, very convergent conviction that all 27 European leaders have expressed about the importance of developing this truly strategic autonomy, this ability to be less dependent from a strategic point of view, to have more From independence at the strategic level, but also to strengthening and diversifying our partnerships with the rest of the world.”

“It is a discussion that showed our desire not to be naive but also not to follow the logic of systematic confrontation,” the European Council president added.

“Europe made a historical mistake’

The COVID-19 crisis and Russia’s illegal war in Ukraine starkly exposed the bloc’s dependence on both countries for its energy needs.

Before the war, the vast majority of European fossil fuel imports came from Russia while China dominated international supply chains when it came to mining and refining rare earth materials, including lithium.

Other issues with China for Europe include respect for human rights, the lack of a level playing field – access to the Chinese market is restricted and relies heavily on technology and knowledge transfer from the European side – as well as blurry lines between business and the state.

There is also growing concern that Chinese tech giants including Huawei – which supplies 5G infrastructure – has close ties with the country’s intelligence services and Chinese investments in European infrastructure.

This is particularly important as EU capitals grapple with the question of how to ensure critical infrastructure is protected in the wake of the suspected sabotage of the Nord Stream pipeline and German rail network in recent weeks.

Like Michel, Macron also called Europe’s previous strategy toward China “naive” and said that when it came to critical infrastructure, “Europe made a historical mistake.”

“During the financial crisis, many member countries in difficult situations in terms of their public finances forced us to sell infrastructure without any European buyers. Thus, in many of these critical infrastructures, Chinese players came to buy.

Can we blame the authorities for selling ports to electricity, gas or other operators? Can we blame the Chinese? No. We were naive because we considered, basically, that there was a public financial issue to be settled, and that Europe was an open supermarket country “.

The European Union has strengthened its guidance on protecting critical infrastructure while encouraging member states to start stress tests as soon as possible, and the Commission has called for more coordination between countries as these infrastructures increasingly cross borders.

“It is in their interest that we are divided.”

Meanwhile, some smaller member states have called for more unity when it comes to China and to ensure geopolitical concerns outweigh trade matters as Germany’s Olaf Schulz prepares to travel to Beijing next month.

Germany is China’s largest European trading partner.

“It is better to deal with China when we are 27, and not when we are one against one and the other against China,” stressed Latvian Prime Minister Arturs Karic.

“With China, it’s the same as with Russia,” said his Estonian counterpart Kaja Kallas.

“It is in their interest that we are divided. It is in our interest that we unite and speak with one voice. It is very important for small countries that do not have that power to have that separate relationship.”

“It’s also important that we don’t have any separate deals with China, because that means we’re a weaker union,” she stressed.

The second day of the European Council began in Brussels after a very short night of leaders who, at around 2 am, agreed to call on the Commission to move forward with urgency. Concrete measures to reduce the price of gas and electricity.

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