Support for Ukraine in the war with Russia. What is the price for the West
- Anastasia Zanuda
- BBC News Ukraine
Photo author, Getty Images
During the month of the war, Russia’s economy suffered heavy losses and was on the verge of default due to sanctions imposed on it by Ukraine’s Western partners.
However, for the West, it will cost billions, especially for Europe, where the country in the east and center of the continent has taken over the reception of supporters of refugees from Ukraine, the number of which already exceeds 3.5 million.
There will be significant losses and companies that refused to work in Russia.
A separate huge issue is the rejection of Russian energy, on which some European countries are dependent, which does not allow to ban the import of gas, oil and coal from Russia.
Currently, EU leaders and individual leaders say they are ready to “pay the price” for supporting Ukraine, because Ukrainians are now defending the common European values of freedom and democracy, as well as Europe itself.
The price is extraordinary
“Me and my husband, our family, friends – we are well aware of the price and are ready to pay it to support Ukraine,” said German Angela, who also offered shelter to a family of Ukrainian refugees.
“We are ready to report this to the government, but the elections have already taken place,” she added, noting that not all Germans can think the same.
The price can be not only high figures in payments for heat and light, higher prices at gas stations, but also – for some – the prospect of losing a job if the company or enterprise is directly dependent on cooperation with Russia.
This may be the result of many years of dependence of some European countries on “reliable” supplies of “cheap” Russian energy. And in front of here is Germany – the locomotive of the European economy.
The German government recognizes that Russian energy should be abandoned because it is they who provide the lion’s share of Russia’s budget and ensure a brutal war against Ukraine, as well as support some financial stability and budget payments within the country.
However, there is also the fact that it will not be possible to get rid of Russian energy “tomorrow”.
The same goes for other European countries in portions before they depend on imports of Russian gas, oil and coal.
Photo author, Getty Images
Rosneft’s controlling stake in the PCK refinery in Sweden is Germany. Since Soviet times, oil goes there through the Druzhba pipeline
More specifics on this issue are expected from the visit of US President Joe Biden to Europe.
The United States has already given up on Russian energy, but its dependence was much lower than in Europe (with the exception of Britain, which is a constantly diversified source of energy).
That is why the White House says that they do not expect from European partners the “impossible” in overcoming Russian energy.
“The president is not going to ask Europe to do what it simply cannot do,” said US Secretary of Energy Jennifer Grenholm, adding that Europe was 40 percent dependent on Russia for gas alone.
But the United States may offer to increase US liquefied natural gas and hydrogen rates to Europe, as it did last December, when it warned of a Russian invasion of Ukraine.
Washington also sees a “no image” for Europe if it seeks alternative energy sources, such as Saudi Arabia or Qatar.
“One of the priorities of the president (Biden) and the European Union is to reduce the region of Europe from Russian gas, its full implementation and a practical plan to achieve this goal,” said Jake Sullivan, a security adviser to the US president.
For her part, Ursula von der Leyen, the European Commission’s leadership, explained that the EU was “trying to secure commitments on other supplies (of energy) for the next two winters”.
The price of the energy issue was fueled by Russian President Putin’s statement that Russia accepts payments for its gas from “unfriendly countries” that have imposed sanctions in rubles. He instructed the government to develop a draft decision within a week.
Immediately after this gas price in Europe, which had previously exceeded $ 1,000 per thousand cubic meters, increased by another 10%.
Although German Chancellor Olaf Scholz noted that payment in rubles to contracts, according to viewers, including in Ukraine, could give an “economic front” in the war with Russia, to which Europe will already be a party.
The price of assistance
Photo author, Getty Images
More now, it is quite possible in Europe for all Ukrainians who have been forced to flee Russian aggression.
The European Commission will allocate 3.4 billion euros under the REACT-EU program to help EU countries accept refugees from Ukraine.
This money will go to finance housing, medical care, education, employment and child care.
The funds are distributed in the best in the country, which took the most important blow.
“Given the urgency and seriousness of the crisis, the causal invasion of Russia in Ukraine, the EU is looking for new ways to provide liquidity to the most affected member states. 3.4 billion euros will be provided to member states as soon as possible so they can provide immediate support to those in need.” EU Commissioner for Employment and Social Rights Nicolas Schmidt.
For the EU member states bordering Ukraine – Poland, Slovakia, Hungary and Romania, as well as the member states that received the largest number of people from Ukraine in proportion to their own population (over 1% in the period from February 24, 2022 to March 23, 2022 ) – Austria, Bulgaria, the Czech Republic and Estonia, – the European Commission to increase the limit of financial assistance under the program from the usual 15% to 45%.
The proposal is expected to be approved by the European Parliament and the Council of the EU soon.
Two logistics hubs have been set up in Poland and Romania to effectively manage Ukraine’s huge humanitarian aid and to support the European Commission’s Emergency Response Coordination Center. It is there that they collect the aid that EU member states, charities and volunteers raise to help.
Currently, all 27 EU countries, as well as Norway and Turkey, provide assistance to Ukraine through the EU Civil Protection Mechanism.
The aid includes more than 80 million items, such as first aid kits, shelter equipment, firefighting equipment, water pumps, generators and fuel.
This is the largest involvement in the history of the EU.
“Europe has faced the greatest humanitarian catastrophe since World War II. In these dark years, we also see the generosity of European states, which are united in supporting the people of Ukraine,” said EU Crisis Commissioner Janez Lenarcic. coordinating urgent rates through the mechanism of civil protection, and an important part of the assistance aimed at rescuing people is already in Ukraine. “
The price of helping their economy
Photo author, Getty Images
German Railways “together with Ukraine”, as well as thousands of companies and enterprises across Europe
Eurocom has also announced temporary anti-crisis measures that member states can use to support companies that have lost due to sanctions against Russia.
The sanctions imposed by the EU and its international partners have had a profound effect on the Russian economy. support the companies and industries they have built. ”
The new rules will allow EU states to provide assistance to companies that have built either through sanctions against Russia or from Russian counter-sanctions.
A mechanism for partial compensation of costs associated with rising gas and electricity prices is envisaged.
Under this mechanism, the company can claim immediate assistance of up to 400 thousand euros.
Price to consumers
Photo author, Getty Images
Even before the war in Ukraine, inflation in the Eurozone reached a record 5.1%. Because of the war, prices on the shelves of European stores are even older
To prevent growth, especially on food, the EU also offers support to its farmers in being good and vigilant.
“Although the EU does not face food security risks, we will still have to address and take steps to strengthen and make our agriculture and food supply chains more resilient to deal with future crises,” said Valdis Dombrowski, MEP.
So far, the European Commission has allocated half a billion euros from the anti-crisis fund in this area.
This package provides country support for those who decide to lower VAT rates to prevent age-related food prices (which will inevitably result in a reduction in budget revenues).
The European Commission has allocated another 330 million euros separately to support food security in Ukraine, “so that the country can feed its citizens and support export markets.”
The price of financial stability
The National Bank of Poland demonstrates its support for Ukraine. And thanks to the NBU agreements, Ukrainians will exchange their cash hryvnias for zlotys in Poland
“In addition to the humanitarian catastrophe unfolding in Ukraine, war and living standards in the region and beyond,” said a joint statement from the IMF, the World Bank, the European Bank for Reconstruction and Development, the European Investment Bank and the European Development Bank.
This impact will be very serious, from declining energy and food supplies to significant price increases and poverty. Large-scale expenditures are also needed to rebuild Ukraine. And all this – when the world is just coming out of the crisis after the pandemic. ”
Leaders of leading world and European financial organizations are creating a slowdown in economic growth, growth and without that high inflation, the rupture of many trade chains, especially serious scientists for the country, which accepted Ukrainian refugees.
Each of these institutions offered its own package of financial assistance.
The EBRD has allocated 2 billion euros to support Ukraine during the war. It should cover the costs of solving urgent problems with energy supply, nuclear safety, support of public utilities – both in Ukraine and in neighboring countries.
The European Investment Bank is providing € 2 billion in assistance, of which € 668 million is immediate financial assistance that the Ukrainian government can already receive. The rest of the bank’s money is spent on infrastructure projects. The Bank also develops support programs for those countries that have accepted Ukrainians.
The European Development Bank has also allocated money to cover the urgent needs of Ukraine’s neighbors to accommodate refugees. This institution will focus on providing social assistance to refugees.
The IMF has provided $ 1.4 billion in the Immediate Financial Assistance program to help Ukraine meet the immediate challenges posed by the war. The Fund also provides assistance to Moldova and other European neighbors of Ukraine.
The World Bank has allocated $ 925 billion to support financial stability, more than a third of which has already come to the needs of the Ukrainian government. In total, Ukraine is to receive a $ 3 billion support package from the World Bank in the coming months. The bank also develops its programs for Ukraine’s neighbors.
Therefore, for the West, the cost of supporting Ukraine is already in the tens of billions of dollars, and the preliminary announced financial needs for the reconstruction of Ukraine after the military estimated hundreds of billions.