Germany rejects EU debt pooling for Ukraine restructuring

Germany rejects EU debt pooling for Ukraine restructuring

EU officials call on member states to be ambitious in helping Ukraine. (File)

Nigswinter, Germany:

Germany’s finance minister today denied borrowing from any European Union (EU) to help pay for the huge cost of rebuilding war-torn Ukraine, following speculation by top European officials.

After chairing the G7 talks in Germany, where countries pledged nearly 20 20 billion (19 billion euros) in aid to Ukraine, Christian Lindner said there would be no repetition of the EU’s landmark post-epidemic recovery fund, known as the “next generation”. Being financed by ordinary loans.

“Again, if there is any consideration of doing something like ‘next generation EU’, the answer is no. It was just an opportunity,” Lindner told reporters at Koenigswinter.

Top EU officials earlier this week called on member states to be ambitious in helping Ukraine rebuild after the war, possibly using the epidemic fund as a model.

The war is still raging, and the amount needed to rebuild Ukraine is unknown, but the European Commission estimates that the damage is already in the hundreds of billions of euros.

“There is a time, sooner or later, when we have to look at funding on a European scale like Covid,” said France Timmermans, the commission’s vice-president, in Brussels on Wednesday.

In a document reviewing how the EU can help Ukraine, the commission said that the rescue of Ukraine could be funded by joining existing EU programs and increasing the EU budget.

However, it said, “options are being considered, including providing a scale of loans that may be needed, raising funds on behalf of the European Union, or a national guarantee from member states.”

The so-called “frugal” member states, such as the Netherlands and Denmark, had to overcome the deep softness in order for the 800-billion-euro next-generation EU fund to come into existence.

Aware of the headwinds facing new general debt advice, an EU official said the commission’s proposals were deliberately vague.

“We invite member states to play with the idea and see if there is a desire to take it further,” the official said.

(Except for the title, this story was not edited by NDTV staff and was published from a syndicated feed.)

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