Debate: Humanitarian and environmental consequences of the destruction of the Nova Kakhovka dam - Sustainable reconstruction and integration of Ukraine into the Euro-Atlantic community
Date: TUESDAY, 13 JUNE 2023
Speaker: Valdis Dombrovskis
Language: LV

I’m here to address you today on the latest developments in Ukraine. The update on EU support after the destruction of the Nova Kakhovka dam and our approach for Ukraine’s reconstruction conference next week in London. We have expressed our support to Ukrainian people whose lives are at risk as a result of this senseless attack, which represents a new dimension of Russian atrocities. One of the most critical aspects that we must continue to follow is the potential impact on the Zaporizhzhia nuclear power plant. The situation is currently stable as the water levels from the cooling pond within the reservoir also remain stable. We are also appalled by very alarming reports that Russian forces are shelling Ukrainian rescuers trying to reach flooded areas in the Kherson region. Since the early hours of 6 June, the Emergency Response Coordination Centre of the European Commission has been closely monitoring the situation and remains in constant contact with the Ukrainian emergency services. A first coordinated meeting with Ukraine and the civil protection authorities of all EU Member States took place on 6 June and resulted in a formal request for assistance from the Ukrainian State Emergency Service. To date, 14 Member States and Union civil protection mechanism participating states have offered assistance to Ukraine. This includes 76 boats, over 300 water pumps and over 160 000 shelter items. The Commission’s immediate response to the dam breach and the rapid mobilisation of assistance is a result of foresight work that had begun months before. Ever since Russian forces occupied the dam, the Emergency Response Coordination Centre has developed a detailed impact analysis and modelling of various degrees of a dam break. This analysis has been constantly updated and shared with the Ukrainian emergency services for contingency planning and operational preparedness. This work allowed valuable time to be gained and situational awareness for emergency response after last week’s events. Similar work is needed for other disaster risks. Honourable Members, I will now turn to the next point at this debate, the reconstruction of Ukraine. The EU is committed to long—term support for Ukraine’s recovery and reconstruction. The Commission is looking at EU support for Ukraine in the medium term beyond 2023 as part of our mid—term review of the 2024—2027 multiannual financial framework, which is ongoing. It is clear that investment in Ukraine’s recovery and reconstruction cannot wait until the war ends. In many regions it can start now. Supporting the recovery implies sustaining economic activity, people with critical needs and basic infrastructure – all vital for much—needed stability and growth. Ukraine will need additional support this year, in particular for its rapid recovery needs. The rapid damage and needs assessment has estimated its immediate rapid recovery needs for 2023 at USD 14 billion for priority areas like civil and social infrastructure, energy infrastructure, housing, private—sector development and humanitarian demining. In order to have a clear overview of needs and how to better respond to them, a well—structured and coordinated approach of reconstruction is needed, both when it comes to fast recovery and longer—term measures. We need a plan that is fully owned by Ukraine and ensures a broad government approach, setting out a clear vision and sequenced reconstruction priorities and supporting the EU accession track. It will facilitate secure and predictable financial support beyond 2023 from a broader donor base. This will require a broad government approach, including at central and local levels. The government should use the full potential of the multi—agency coordination platform in which Ukraine takes part as a central coordination mechanism for Ukraine. This includes a decisive role that it can play in mobilising global efforts beyond 2023 and matching needs with resources. It is important to stress that Ukraine’s reconciliation should also be financed by Russian assets. The EU is committed to ensuring that Russia is held fully accountable for its unprovoked and unjustified war of aggression against Ukraine. We have to ensure strong coordination with our European financial institutions – both the European Investment Bank and the European Bank for Reconstruction and Development – to make sure that they play an important role in Ukraine’s reconstruction. This includes fast recovery as well as post—war reconstruction efforts. Both banks have lived up to the role, stepping up their support for Ukraine from the very first days of Russia’s war. The EIB has also set up the ‘EU for Ukraine’ initiative to finance its recovery and reconstruction. The Commission and the EIB are finalising an agreement today to enable the EIB to provide EUR 100 million of new loans to Ukraine with support of the EU Guarantee. In May, the EBRD governors agreed to launch a process of capital increase to provide more firepower for the continuous critical roles that the bank plays in Ukraine and its forthcoming reconstruction. The successful third meeting of the steering committee of the Multi-agency Donor Coordination Platform on 26 May confirms the platform’s vital role as a catalyst for mobilising international commitments to respond to Ukraine’s priority needs in 2023 and beyond, and to facilitate ever closer coordination to help meet the needs on the ground. The next steering committee meeting will take place in person in the margins of the Ukraine Recovery Conference 2023. The European Commission welcomes the focus of the London Recovery Conference on the private sector. It seems that various initiatives are being developed for private—sector support. This is good, but we need to ensure complementarities and avoid duplication. The reforms related to improving the business environment are crucial for Ukraine’s recovery and reconstruction. The perspective of the EU accession provides fundamental value in this regard. The public sector will play an important role in providing guarantees and other de-risking instruments, particularly insurance, to enable private—sector participation and investment in Ukraine. This will be particularly important to restore trade and commerce flows. The European Commission is working to launch a pilot facility to counter—guarantee export credit agencies so that they can continue to cover for exports on the EU companies to Ukraine. The lack of war insurance in most EU Member States is seen as one of the barriers to engage private business in Ukraine’s reconstruction. We are in discussion with several partners, including the UK and the EBRD, about a potential scheme to incentivise the insurance industry to launch war insurance policies for Ukraine. The Commission is also working with the EIB on a EUR 40 million guarantee facility for micro-, small and medium—sized enterprises. Honourable Members, it is important to keep Ukraine high on the leaders’ agenda to demonstrate the EU’s unwavering support. Pending the oral update on implementing the seven steps of the Commission opinion, we will update as Ukraine continues its war efforts. Progress on reforms during wartime has been impressive, but some work remains to be done. The European Commission and our delegation in Kyiv are closely cooperating with Ukrainian interlocutors on a few outstanding issues. It is important that the EU sends a message to Ukraine and our international partners that the EU is ready to ensure sustainable and predictable financial support beyond 2023. The EU will play a special role for Ukraine’s reconstruction, and reconstruction efforts need to go hand in hand with the reforms to build a modern and resilient country that is really turned towards the EU. The Commission is working on proposals in this area that will likely accompany a mid-term review of the multiannual financial framework. The Commission cannot comment on third states’ relationships with NATO, as the EU has no say on that. But that said, it’s clear that credible arrangements are needed to guarantee Ukraine’s future security and to break Russia’s cycle of aggression.