Remarks by Executive-Vice President Dombrovskis at the informal ECOFIN press conference
European Commission
Speech
25 February 2022
Paris
Merci Bruno. Mesdames et messieurs :
Tout d'abord, je voudrais remercier la Présidence française de nous avoir invités à Paris. Un grand merci, Bruno.
On connait Paris comme la Ville Lumière - mais nous nous rencontrons aujourd'hui à une heure très sombre pour l'Europe.
The situation in Ukraine is extremely grave.
I would like, first and foremost, to express my deepest condolences to the families and close ones of the victims.
The EU condemns this unjustified and barbaric invasion in the strongest possible terms.
Russia is using brute force to remove Ukraine's sovereignty.
However, it is also about Europe's entire security architecture.
To be crystal clear: we are facing the greatest security threat since the Second World War.
Russia poses a very real threat to the free world.
To our security, stability, economies and societies.
The EU is acting immediately against this outrageous violation of international law.
As Bruno has already mentioned, at the European Council yesterday, EU leaders agreed on a massive sanctions package against Russia. This is already the second package of sanctions which has been agreed against Russia.
These sanctions are designed to take a heavy toll on the Kremlin's interests and the political elite.
They will weaken Russia's economic base, deprive it of critical technologies and markets, and reduce its ability to finance war.
The sanctions are based around five areas, starting with the financial sector. And actually the sanctions which have already been implemented against Russia cover 70% of the Russian banking market, but also key state-owned enterprises, including in defence.
There are other areas of sanctions, including in the energy and transport sectors; export controls and the ban of export financing; a ban on financing sovereign debt, visa policy, personal sanctions against persons involved in this aggression.
These measures are closely coordinated with our partners.
Our unity, the unity of the Western democratic world, is our strength. But we will go further still.
We are already preparing plans for the next steps to take against Russia, with more sanctions that will also include Belarus.
Again, this will be done in coordination with our partners.
Nothing should be off limits. We are facing the ultimate test.
This is a stark choice: staying in the world which applies and respects the rule of law. Or moving to an extreme world where the only rule is 'might is right'.
The EU needs to do everything in its power to stop Russia in its aggression.
We have to rethink our relations with Russia across the board.
It is turning itself into a pariah state.
The EU stands, and will continue to stand, by Ukraine and its people. We are united in our resolve to support Ukraine in this difficult hour.
Turning to the economic implications:
First and foremost, there are severe economic implications for Ukraine itself. Ukraine is suffering investor flight and its access to financial markets has been very problematic.
Its currency, hryvnia, has come under pressure and central bank reserves are being depleted in market interventions.
So it is clear that Ukraine's financing needs will be massive, and we will need to match those financing needs.
As you know, we have recently decided €1.2 billion of a macro-financial assistance emergency programme. We are now moving fast to disburse the first tranche of €600 million.
But it is clear that the support will have to go far beyond this.
Just to give some comparison, before Russia's military build-up around Ukraine's borders, the estimate of the financing gap for Ukraine for this year was around €2.5 billion.
After Russia's military build-up, it was around €5 billion. And that was even before the military aggression started, because the very fact of this military build-up was already scaring away investors.
Now, the financing needs are off-the chart.
We cannot really estimate them, but we need to be ready to support Ukraine in every way we can.
The effect of sanctions against Russia will affect the EU economy too.
But this is a price worth paying to defend democracy and peace. We will obviously have to consider how to mitigate its impact.
Russia's invasion has already jolted financial markets.
This conflict adds a great deal of uncertainty to an already complicated economic situation and the challenges we are facing.
This crisis once again demonstrates why Europe must remain united and resilient, and why we need to stick to our policies. It is thanks to our policies - and to our economic policy response during the crisis - that our economic fundamentals are strong.
We will need to stay vigilant and adjust policies if needed - because it is clear that EU economies are going through a period of profound challenges.
Investment needs are high for the green and digital transitions.
And in the afternoon's sessions, we will be discussing topics of EU's economic policy for strong and resilient growth, a strong financial sector, for progress to be made on the Banking Union and Capital Markets Union - because it is clear that we also need our economy to ensure that we have strong and sustainable economic growth.
Thank you.
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