G. Skaistė: "We Must Find Ways to Use the Frozen Russian Funds for the Reconstruction of Ukraine"
On 28-29 April, Minister of Finance Gintarė Skaistė will participate in the informal meetings of the Eurogroup (EG) and ECOFIN in Stockholm (Sweden), which will focus on discussing the issues of economic and fiscal policy perspectives, strengthening the banking system and financial support mobilization for Ukraine.
"Thanks to the concentration of Western partners and the mobilization of funds from international financial institutions, this year's budget needs of Ukraine are basically covered. However, as regards rebuilding of the country – both in the near term and in the future – the lack of funds remains obvious. Reconstruction of Ukraine will require more than EUR 400 billion, this amount is growing with each day of the war. Effective international cooperation is crucial in meeting these needs, and the EU's role in this regard is strategic, as the country's recovery and reform agenda must lead to EU membership. In addition, we must find ways to use frozen russian assets for Ukraine's needs, thus ensuring the principle of "aggressor pays," stated Minister of Finance G. Skaistė.
During the informal ECOFIN, the coordination of financial support for the reconstruction of Ukraine and the sources of financing will be discussed. Until now, countries supporting Ukraine and international financial institutions have mobilized huge financial support, but the country's reconstruction needs are significantly greater and, according to the World Bank, exceed USD 411 billion.
In order to efficiently mobilize and use financial support, it is necessary to ensure proper coordination of different initiatives at international level. It is also extremely important to further analyse the possibilities of using frozen russian assets for the reconstruction needs of Ukraine. According to preliminary data, about USD 50 billion of private individuals and about USD 300 billion of russian central bank funds have been frozen in Western countries.
During the ECOFIN meeting, the importance of the development of capital markets will be discussed, especially in increasing access to financing sources for innovative companies. Ministers will exchange views on what the next steps could be to achieve a breakthrough in the development of the EU capital markets union.
The ministers will also discuss the role of fiscal policy in ensuring stable and sustainable economic growth in the long term and share national experiences in implementing support measures for the most vulnerable households and business entities in the context of still high inflation.
During the EG meeting, the main focus will be on strengthening the EU banking system. It is planned to discuss the Commission's legal proposals published last week on bank crisis management and strengthening the deposit insurance system.
"We support the effort to strengthen the banking crisis management and deposit insurance system. Although EU banks withstood the negative consequences of the pandemic and the russian war on the economy well, we see room for strengthening the system by increasing resistance to future shocks. In the long run, we must also return to the discussion on the completion of the Banking Union, including the creation of a common European deposit insurance scheme," noted the Minister of Finance.
During her visit to Stockholm, Minister G. Skaistė will also meet the member of the European Commission responsible for economic issues, Paolo Gentiloni, and the Ministers of Finance of Portugal and Denmark.
Last updated: 03-05-2023
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