Estonia has proposed a financing plan for Ukraine worth 120 billion euros a year. Tallinn believes that the best way to achieve this goal is to borrow from the financial markets or take it from national budgets, UNN reports with reference to Euractiv.
Details
According to Kusti Salm, the Permanent Secretary of the Estonian Ministry of Defense, the allocation of 120 billion euros a year for military aid to Ukraine is "an approximate figure that should be enough for Ukraine to win the war."
In an interview with Euractiv, Salm suggested that part of this amount could be financed through Eurobonds - the European Commission could raise funds on the financial markets and use a group of 27 EU member states as a guarantee.
Over the past few months, Estonian politicians and officials have repeatedly stated that for Ukraine to win the war, Western allies need to invest 0.25% of their GDP in military aid to the country, based on a strategy developed by the Estonian Ministry of Defense.
The strategy describes in detail what the money will be spent on, mainly defense equipment and ammunition.
"If the 50-odd countries that make up the US-led Ramstein coalition that provides military support to Ukraine spent that percentage, it would amount to "more than 120 billion euros a year," Salm said.
He also warned that even if the money starts flowing now, the results could be seen in almost a year. According to him, it will take another nine months or so to get supplies up to the right level
Salm noted that Western allies are spending half as much on the war as Russia is currently: "$5.5 billion from the West, $10 billion from Russia.
According to the Estonians, the allocation of 0.25% of GDP to Ukraine is "affordable" and makes it clear that Western countries are not exceeding their capabilities, "which helps to get rid of the defeatist mood a little bit and shows that in fact very little effort is required from us for Ukraine to win the war," even without the participation of the United States.
This figure is 1/8 of the spending of the Ramstein countries on Ukraine, according to the country's analysis.
According to the Estonian official, Eurobonds could be a way to get access to money as early as possible.
"Several countries have said they can't afford it, and that's where the Eurobond discussion comes into play, where there is an element of solidarity," Salm suggested.
All 27 EU member states together will instruct the EU executive to find money on the financial markets and will be bound by interest rates.
Україна отримає 6 млрд євро перехідного фінансування від ЄС: підписано угоду12.03.24, 22:26
According to the newspaper, the use of the European Commission to issue debt to finance Ukraine's defense or expand defense production in Europe is considered as an option to increase the amount of funds.
According to Euractiv, EU leaders at next week's summit may call for "the inclusion of options for mobilizing funding from additional sources.