Debate: The social and economic consequences for the EU of the Russian war in Ukraine - reinforcing the EU’s capacity to act
Date: WEDNESDAY, 4 MAY 2022
Speaker: Ursula von der Leyen
Language: EN

But the answer to all these questions, we cannot give alone in these days. The answer is also given in Ukraine. It is given in Kharkiv, where Ukrainian first responders venture into the combat zone to help those wounded by Russian attacks. It is given in the small town of Bucha, where survivors are coping with the atrocities committed against civilians by Russian soldiers. And it is given these days in Mariupol, where Ukrainians are resisting a Russian force, which greatly outnumbers them. Because they are fighting to reaffirm basic ideas: that they are the master of their future and not a foreign leader, that it is the international law that counts and not the right of might. And that Putin must pay a high price for his brutal aggression. Thus, the future of our European Union is also written in Ukraine. And therefore, today I would like to speak about two topics. First about sanctions and second about relief and reconstruction for Ukraine. Today, we are presenting our sixth package of sanctions. First, we are listing high-ranking military officers and individuals who committed war crimes in Bucha and those who are responsible for the inhuman siege of the city of Mariupol. This sends another important signal to all perpetrators of the Kremlin. We know who you are. We will hold you accountable. You’re not getting away with this. Second, we finally de-SWIFT Sberbank – Sberbank is the largest Russian bank and it holds around 37% of the whole banking sector – and we will also de-SWIFT two other major banks in Russia. By that, we hit banks that are systemically critical to the Russian financial system and Putin’s ability to wage destruction. This will solidify the complete isolation of the Russian financial sector from the global system. Third, we are banning three big Russian state-owned broadcasters from our airwaves. They will not be allowed to distribute their content any more in the European Union, in whatever shape or form, be it on cable, via satellite, on the internet or via smartphone apps. We have identified these TV channels as mouthpieces that amplify Putin’s lies and propaganda aggressively. We should not give them a stage anymore to spread these lies.  Fourth, the Kremlin relies on accountants, consultants and spin doctors from Europe, and this will now stop. We are banning those services from being provided to Russian companies. My final point – number five – is sanctions on oil. When the leaders met in Versailles, they agreed to phase out our dependency on Russian fossil fuels. In the last sanction package, as you know, we started with coal. Today, we are addressing our dependency on Russian oil. Let’s be clear: it will not be easy because some Member States are strongly dependent on Russian oil. But we simply have to do it. So today we will propose to ban all Russian oil from Europe. This will be a complete import ban on all Russian oil: seaborne and pipeline, crude and refined. We will make sure that we phase out Russian oil in an orderly fashion, so in a way that allows us and our partners to secure alternative supply routes and, at the same time, be very careful that we minimise the impact on the global market. This is why we will phase out Russian supply of crude oil within six months and refined products by the end of the year. Thus, we maximise the pressure on Russia, while at the same time – and this is important – we minimise the collateral damage to us and our partners around the globe, because to help Ukraine we have to make sure that our economy remains strong. Honourable Members, with all these steps, we are depriving the Russian economy of its ability to diversify and modernise. Putin wanted to wipe out Ukraine from the map and he will clearly not succeed. On the contrary: Ukraine has risen in bravery and in unity, and it is his own country, Russia, that Putin is sinking. We want Ukraine to win this war, but we also want to set the conditions for Ukraine’s success in the aftermath of the war. This is my second point: relief and reconstruction. The first step is immediate relief. This is about short—term economic support to help Ukrainians cope with the fall-out of the war. We have done a lot already. Let me remind you of our macro—financial assistance package or the direct support to the Ukrainian budget. In addition, we recently proposed to suspend all import duties on Ukrainian exports to our Union for one year. I am sure that the European Parliament will put its weight behind this idea and this proposal. But we all know this is not enough for the short-term relief. Ukraine’s GDP is expected to fall by 35% to 50% this year alone and the IMF estimates that, from May on, Ukraine needs EUR 5 billion per month, plainly and simply to keep the country running, so to pay pensions and salaries, and to provide for basic services. We have to support them, but I also know that we cannot do this alone, so I very much welcome that the United States has announced massive budgetary support, and we, as Team Europe, have to do our share too. But then, in a second phase, there is the wider reconstruction effort, and you all know that the scale of the destruction is staggering. Hospitals and schools, houses, roads, bridges, railways, theatres, factories – you just name it – so much has to be rebuilt. Of course, in the fog of war, it is difficult to come up with a precise estimate, but economists are talking about several hundred billion euros. And here, honourable Members, I think Europe has a very special responsibility towards Ukraine.  With our support – and of course with the help of the international financial institutions and other global partners – Ukraine can rebuild their country for the next generation. This is why today I propose to you that we start working on an ambitious recovery package for our Ukrainian friends. If we do it right, this package should bring massive investments to meet the needs and the necessary reforms in parallel. So it should address the existing weaknesses of the Ukrainian economy and lay the foundation for sustainable long-term growth. It could set a system of milestones and targets to make sure that the European money truly delivers for the people of Ukraine and is spent in accordance with European rules. It could help fight corruption; we have to do that. It could align the legal environment with European standards and radically upgrade Ukraine’s productive capacity. This will bring the stability and the certainty that is needed to make Ukraine an attractive destination for foreign direct investment. And eventually, honourable Members, it will pave the way for Ukraine’s future inside the European Union.