(Source European Investment Bank –EIB)
EIB President Werner Hoyer speaks at the 9th European summit of regions and cities on 3 March 2022.
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Ladies and gentlemen,
Thank you very much for inviting me here to speak this morning. I wish it were under different circumstances. My intervention was initially on a completely different topic, but naturally all of our attention is now focused on Ukraine and the tragic fallout of this war.
These are truly dark times for Ukraine and Europe. The European Investment Bank joins all EU institutions, European citizens and countries of the free world in strongly condemning the military invasion of Ukraine by Russian troops.
The EIB – the EU bank – stands in solidarity with the Ukrainian people. Our commitment to supporting an independent Ukraine and improving the lives of its people remains steadfast.
We are closely following events and remain in contact with all relevant EU institutions and International Financial Institutions, ready to do whatever we can to support Ukraine in this terrible situation.
Anything the invasion destroys, we aim to rebuild as soon as an independent Ukraine is re-established.
We stand ready to urgently mobilise further financial support to the country as part of a coordinated EU and international response to this unprecedented crisis.
Ladies and gentlemen,
We have developed an emergency “Solidarity Package for Ukraine” which we aim to approve on Friday during an extraordinary EIB board meeting. This is made possible by the excellent cooperation we have enjoyed with the European Commission, for which I am very grateful.
This emergency solidarity package will come in three steps.
First, we intend to provide immediate liquidity support to the Ukrainian authorities by disbursing close to €700 million. This is done by redirecting existing credit lines.
…Once we get the final greenlight expected on Friday, we can start disbursing without delay and within 3 days the Ukrainian authorities will start to receive these funds on their bank account – and that is under the current war conditions. 3 days!
Second, we will repurpose infrastructure project commitments amounting to €1.3 billion to meet immediate investment and reconstruction needs. These will cover transport, energy, urban development and digital. This can be done very quickly, as soon as the Ukrainian authorities are in a position to sign-off on amendments to existing contracts.
Third, we will help rebuild whatever the Russian army knocks down and help put in place the new critical economic and social infrastructure needed.
But our support won’t stop there.
… In the short term we aim to formulate a comprehensive humanitarian, social and economic relief package to help address the potential refugee crisis for Ukraine’s neighbours. Here we will act very quickly and with resolve. I will make a concrete proposal very soon.
We have learnt a lot from the implementation of the Ukraine Early Recovery Plan, with 246 projects financed after the conflict in 2014, mainly in the areas of Donetsk and Luhansk. Our energy is not drained by frustration and devastation.
Beyond addressing the immediate needs in Ukraine and those of neighbouring countries, we need to focus on the full economic fallout of the war, both inside and outside the EU. We must be mindful that the burden will not fall equally across regions and countries.
We are looking potentially at a double shock to the EU economy. An energy price shock and a shock caused by massive uncertainty, influenced by the war and the ripple effect of sanctions.
The consequence of this may be (i) economic contraction and (ii) upward pressure on prices.
In light of this, we will have to start thinking about support measures for regions particularly hard hit inside the EU. There could be a real risk of economic divergence otherwise, a divergence that central banks may not be able to cushion because of the risk of rising inflation.
So, while we work on Ukraine and its pressing needs, we must keep in mind the impact of this terrible war on neighbouring countries and inside the EU.
While the future remains clouded in uncertainty, we must hope for the best but unfortunately prepare for the worst.
Thank you very much for your attention.