EU Economic Commissioner warns members against taking "exaggerated loans" for Ukraine

Amid the ongoing Russia-Ukraine war and the COVID-19 pandemic, the European Union's top official has warned member states to refrain from taking "exaggerated loans" to reconstruct the war-ravaged nation. In an interview with the German national daily newspaper, WELT, EU Economic Commissioner Paolo Gentiloni appealed to the members to not take any "high hope loans" for Ukraine, considering they were already facing the brunt of the COVID pandemic. During the interview, he forecasted that it is not the right time for Europe to take further loans as growth has already declined compared to the pre-pandemic era. 

"Europe is heading towards a recession and possibly the stagflation feared by economists," he noted. When asked about the reports of some member states demanding a new pot of money worth hundreds of billions of euros at the EU level for the reconstruction of Ukraine, he said the team has already advised them about the current situation. He affirmed that the member states are recommended to help Ukraine as per their requirement in war – supplying cash and weapons to Kyiv. Gentiloni said that the EU has already transferred 600 million euros to the Ukrainian government and added another aid with a similar amount that will be transferred this week.

"The priority is to support Ukraine in its current expenditure. We must prevent Ukraine from going bankrupt. The EU has therefore already transferred 600 million euros to the Ukrainian government and another 600 million will follow this week," he told WELT. 

"We will discuss this with the finance ministers of the G7 in Bonn on Thursday. And at the same time we are thinking about how long-term the reconstruction of Ukraine should look like," he added. 

Russia-Ukraine war

It is pertinent to mention that Russia initiated a full-fledged war against Ukraine nearly two days after Vladimir Putin signed a decree recognising the independence of Donetsk and Luhansk regions. Since then, it has been bombarding several cities in Ukraine, resulting in the killing of thousands of civilians and the loss of infrastructure. Despite repetitive warnings from the West, Russian Foreign Minister Sergei Lavrov, during an interview with Russian media, said, "Russia is not in the mood to wrap up the ongoing "military operations" without achieving the goal.