Bloomberg reports that the EU delayed the release of funds because it was concerned about its economy.
The funds promised to Ukraine by the EU have been delayed due to concerns over the bloc’s own economic troubles and infighting in Brussels, Bloomberg reported on Friday, citing people familiar with the discussions.
Back in March, the European Commission proposed a €9 billion ($9 billion) loan to Ukraine that would be backed by the guarantees of EU members’ governments. However, so far the bloc has managed to agree only on a first tranche worth €1 billion, which was unveiled on Tuesday.
Bloomberg claims that this is due to Germany’s attempt to convince the EU not to give loans but to Kiev, but to make non-refundable grants via the International Monetary Fund.
According to German officials, Berlin is not willing to guarantee loans to Ukraine and so has requested that other member countries chip in more.
Separately, a €1.5 billion loan by the European Investment Bank was said to have been blocked within the EU because more guarantees are needed to secure the sum.
This news is coming as the EU struggles with rising inflation. Germany was particularly concerned about Russia’s sanctions and tensions, as this could force Moscow to stop the flow Russian gas. This would have a devastating effect on the German economy.
According to the German government, such an outcome would lead to increased unemployment and poverty. It would lead to fuel shortages. “catastrophic”Last month, Robert Habeck, the Economy Minister for certain industries, spoke to Der Spiegel.
Viktor Orban, the Hungarian Prime Minister raised similar points on Friday. He stated that sanctions were being imposed because of this. “the European economy has shot itself in the lungs, and it is gasping for air.”
Bloomberg reported that about a third (or so) of the 27 EU members warned Tuesday at an EU finance ministers’ meeting, that they needed additional support. “the most vulnerable groups inside the bloc affected by the ongoing crisis to prevent disaffection toward Kiev.”
An EU official was quoted as saying that Paolo Gentiloni, the bloc’s economy commissioner, told colleagues at a closed-door meeting that national governments needed to “avoid the risk of fatigue among Europeans.”
After Russia sent its troops to Ukraine late February, the West, which includes EU countries, placed severe sanctions against Russia. The Group of Seven (G7) which comprises Germany and EU economic power, pledged support to Kiev last month “for as long as it takes.”
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