EU floats idea of massive aid to rebuild Ukraine

BRUSSELS (AFP) - Top EU officials on Wednesday (May 18) urged member states to be ambitious in helping Ukraine rebuild after the war, including through possible joint borrowing to cover the massive costs.

With the war still raging, the extent of Ukraine's reconstruction needs is not known, but the European Commission, the EU's executive arm, believes the damage already done is already in the hundreds of billions of euros.

To help pay for this, officials are floating a repeat of the EU's post-pandemic recovery fund, the €800 billion (S$1.16 trillion) in fiscal stimulus that is being financed by common debt among the EU's 27 member states.

The fund, officially known as Next Generation EU, overcame deep reticence by so-called "frugal" member states such as the Netherlands and Denmark to come into being.

"There is a time, sooner or later, when we will have to look at funding on a European scale as we did for Covid," said Commission vice-president Frans Timmermans, at a news conference in Brussels.

In a document reviewing ways the EU could help Ukraine, the commission said the rescue of Ukraine could be paid through added contributions to existing EU programmes and boosting the EU budget.

But, it said, "given the scale of the loans that are likely to be needed, raising funds on behalf of the EU or with national guarantees from member states is among the options being considered."

The idea of a new common debt will face headwinds in the countries of northern Europe that had rallied against the European recovery plan in the summer of 2020.

Aware of the reservations, an EU official said the commission's proposals remained intentionally vague.

"We are inviting member states to play with ideas and see whether there is a willingness to go along and take this further," the official said.