EU money for Ukraine
February 25, 2014
The European Union foreign policy chief, Catherine Ashton, has traveled to Ukraine to discuss EU aid with the new leadership. On offer is an international aid package to help with Ukraine's "short, medium and long-term economic difficulties," a spokesman for the European Commission in Brussels said. But, it is unclear what exactly she can offer and how much money is involved.
Before she left, Ashton called on all sides to respect the wishes of the people of Ukraine for democracy and to preserve the unity and sovereignty of the country. European Commission spokesman Olivier Bailly was unable to confirm that there would be an international donors' conference, as proposed by the acting Ukraine finance minister.
European Commissioner for Monetary and Economic Affairs, Olli Rehn, said at the meeting of G20 finance ministers in Sydney on Sunday (23.02.2014), that financial support in the billions of euros was under consideration, not just hundreds of millions.
During the political upheavals in Ukraine, the EU had stressed again and again that the association and free trade agreements that had already been negotiated lay ready to sign on the table. The European Commission in Brussels confirmed that it depended on Ukraine alone as to when and if the agreements would be signed. But there has been no talk of a date.
EU funds should start flowing - but to whom?
Rebecca Harms, co-president of the Greens in the European Parliament, told DW that the EU and the US must now quickly put together an aid package. Harms, who spent the weekend in Kyiv, also spoke to released opposition leader Yulia Tymoshenko. Shortly before her departure for Brussels, Harms said the EU must quickly provide help to the new leadership in Kyiv, including judicial reforms. There should be no "political justice and revenge" against the old rulers.
Last year, negotiations by the International Monetary Fund (IMF) with Ukraine on emergency loans already failed once because there was no agreement on the terms.
This must not happen again, Harms said. "These mustn't be the usual stubborn conditions of the IMF. At the same time, we must ensure that no further large part of these assets is taken out of Ukraine by capital flight, tax evasion, or money laundering. When we get a grip on that, we won't need to put as much outside money into this country, " she said.
The head of the International Monetary Fund, Christine Lagarde, stressed at the G20 finance ministers' meeting in Sydney that economic reforms in Ukraine must begin before the fund could make aid commitments.
German Foreign Minister Frank-Walter Steinmeier announced that next Thursday (27.02.2014) he would speak personally with the IMF about loans for Ukraine. Steinmeier is traveling to Washington for long-planned policy discussions with the US government.
Germany's Commisioner for Eastern Europe and Russia, Gernot Erler, spoke in favor of including Russia, which had already given two billion dollars in aid to the now defunct Yanukovych government in Ukraine. "I would suggest that we try to talk with Russia, because Russia also has an interest in preventing chaos in Ukraine and stabilizing the country." He added that it was important for Russia to have a neighbor in good shape.
The Social Democrat said Ukraine now quickly needs an effective government. "So far, the main problem is having to negotiate conditions, but with whom? We don't yet have a transitional government, but there has to be an effective government in place because no one wants to give money away for nothing. "
Sanctions still possible
In Kyiv, Ukraine's acting Acting Minister of Finance, Yuriy Kolobov, suggested an international donor conference for his country. He estimated his country's financial needs at 25 billion euros. International rating agencies reckon that Ukraine is close to bankruptcy.
Russia stopped payment on a further tranche of emergency loans following the political upheaval in Ukraine. Russian President Vladimir Putin had promised the Yanukovych regime 18 billion dollars in aid and Yanukovych then abandoned the Association Agreement with the European Union. Russia had also granted Ukraine a 30-percent discount on natural gas supplies.
The European Union, meanwhile, has not given up its threat of sanctions against political and business leaders in Ukraine who were implicated in the violence against protesters.
The European Commission in Brussels confirmed that it will continue working on a list of persons whose bank accounts could be blocked in the EU and who would be banned from traveling to the EU. "These penalties may be imposed, depending on how the situation develops in Ukraine," Commission spokesman, Oliver Bailly, said.
Harms also said sanctions were still on the table. "In any case we must first determine where the money is that the elites were able to get their hands on thanks to President Yanukovych. If that can be returned to the country, then it is important that the European Union do everything possible."