A bankrupt Ukraine would prove a great gift for Putin

The European Parliament’s Foreign Affairs Committee accepted today, in a rarely implemented fast - tracked procedure, an opinion on the decision to provide Ukraine with 1.8 billion EUR in macro financial assistance (MFA). “This will allow the European Parliament to continue its support to the reform process in Ukraine, something it has continued to do for years. Once adopted, this MFA will make a tangible contribution towards supporting the legitimate leadership of Ukraine. A timely assistance for Ukraine may ease what would remain a serious balance-of-payment crisis threatening the financial stability of the country,” says Jacek Saryusz-Wolski, EPP Group's  Vice-Chairman responsible for Foreign Affairs and EP's standing rapporteur on Ukraine.

 “Ukraine’s drastic financial situation results from a lack of long overdue structural reforms, bad governance but even more from economic and financial losses resulting from war, foreign invasion and occupation. The government in Kiev needs immediate, increased and timely support, as it fights against Russian aggression in the East of the country, while simultaneously embarking on ambitious economic and administrative reforms, a process that is by definition immensely difficult. It is unprecedented in European history that a country faces two such challenges in parallel,” commented Jacek Saryusz-Wolski.

 “The greatest gift that the EU and the West could offer to Putin and to Russia would be allowing Ukraine to go bankrupt. We cannot allow this. A friend in need is a friend indeed,” he argued.  

The opinion's justification calls also upon the EU to explore other ways than the MFA that  could further ease Ukraine’s financial situation and thus diminish its need for future financial assistance.

 “A destructive war as well as endemic corruption, inflation, and low levels of foreign currency reserves are constantly bleeding Ukraine’s economy dry. While the MFA can act like a metaphorical IV drip, providing low-interest loans, we should also look into creative non-financial solutions”, added Mr Saryusz - Wolski.

For example the EU should facilitate, through all possible legal and administrative means, the return to Ukrainian hands of those assets which were illegally detained by the former political elites, and which are now hidden and frozen in banks in the EU. The opinion highlights also  that it is imperative to ensure that, should Ukraine recover the assets that were illegally detained by the previous leadership, those assets are not rerouted and used to satisfy any Russian claims, but are instead devolved to the benefit of Ukrainian state in need.

 The Foreign Affairs Committee also suggests that the EU should support Ukraine’s financial stability by establishing a joint investigative body that would monitor the EU’s financial assistance towards Ukraine. “Such body would not only ensure that the EU funds are spent properly, but would also serve as a capacity-building institution, being composed of the Ukrainian officials and anti-corruption experts from the EU, thus transferring to Ukraine best EU practice in financial control and auditing,” Saryusz-Wolski explained.

 The European Parliament will vote on this opinion on March 25th 2015 during a plenary sitting in Brussels.