Press statement by President von der Leyen on the Commission’s proposals regarding REPowerEU, defence investment gaps and the relief and reconstruction of Ukraine

(Source: European Commission)

“Check against delivery”

Since almost three months now, Russia is waging a brutal war against Ukraine. And it threatens all those that support Ukraine in its legitimate defence. Putin’s war poses fundamental challenges to our Union. Thus, today’s proposals in the College of Commissioners are addressing our energy security of supply, defence and our neighbour Ukraine. Putin’s war is disrupting the global energy market. It shows how dependent we are on imported fossil fuels. And how vulnerable we are to relying on Russia for importing our fossil fuels. We must now reduce as rapidly as possible our reliance on Russia in energy. We can. Today, we present our plan to realise these REPowerEU objectives. We can replace Russian fossil fuels by working on three levels: On the demand side, saving energy. On the supply side, diversifying our energy imports away from fossil fuels and accelerating the clean energy transition. Fortunately, we have the foundation for doing this already in place. We have already embarked on a transformation of our energy system to become climate neutral – our famous European Green Deal. And this was already ambitious. But today, we are taking our ambition to yet another level to make sure that we become independent from Russian fossil fuels as quickly as possible. This is REPowerEU. REPowerEU will help us to save more energy, accelerate the phasing out of fossil fuels and kick-start investments on a new scale. This will be speed-charging for our European Green Deal.

To start with the most obvious: Energy savings are the quickest and cheapest way to address the current energy crisis. We will therefore increase the EU energy efficiency target for 2030 from 9% to 13%. And we are increasing the 2030 target for EU renewable energy from 40% to 45%. And we come with a host of actions to scale up and speed up the clean energy transition. For example, we are proposing to speed up permitting procedures for renewables and associated infrastructure like grids. We are proposing a solar rooftop obligation for commercial and public buildings by 2025 and for new residential buildings by 2029. This is ambitious but realistic. We know that when Europe acts together, it has more clout. The EU 27 government Leaders agreed to set up a platform for the joint purchase of gas, LNG and hydrogen. As part of our REPowerEU plan, we propose an operational way forward, with a joint procurement mechanism and a joint outreach to supplying countries. This way, we can secure the energy imports we need without competition between our Member States. All of this will, of course, require massive investments and reforms. We mobilise close to EUR 300 billion. Approximately EUR 72 billion in grants and EUR 225 billion in loans. This will include some financing – up to EUR 10 billion – in missing links for gas and LNG so that no Member State is left in the cold. And up to EUR 2 billion for oil infrastructure in view of stopping the shipment of Russian oil. All the rest of the financing will go into speeding and scaling up the clean energy transition.

We need to do the same on defence. The return of warfare to Europe has underlined the effects of years of defence underspending. We have lost a decade in defence investment because of all these cuts. However, Member States are now reversing this trend. They have announced an additional EUR 200 billion in defence spending over the next few years. Now we must keep the momentum. We must make sure that this money is spent in a coordinated way, that it addresses the capability gaps Europe has identified by both EU and NATO. And that it strengthens our European defence industrial base in the long term. We ask for joint procurement because it is better operationally for the armed forces, financially and industrially. And it strengthens our vast network of innovative SMEs. We will set up immediately a Task Force with Member States to coordinate immediate replenishment and procurement needs. It will be accompanied by a financial incentive instrument to purchase jointly. And in fall we will propose a regulation to make sure that joint procurement benefits from full VAT exemption. This will strengthen our independence and resilience. And at the same time it will strengthen NATO.

Finally, let me come back to Russia’s war on Ukraine, the driver of this acceleration in our efforts to strengthen Europe’s resilience. Ukraine is on the frontline and defending European values. We will continue to be at their side throughout this war and when they rebuilt their country. This is the third issue I want to inform you about today. We are proposing to top up the significant short-term relief provided until now, with a new exceptional macro-financial assistance for Ukraine of up to EUR 9 billion in 2022. But we also need to think about the day after for the wider reconstruction effort. The EU has a responsibility and a strategic interest in leading this reconstruction effort. EU Leaders invited us to reflect on this at their meeting in Versailles. And that is what we did. The reconstruction principles should combine investment with reforms. In time, they will support Ukraine in perusing its European path. It should be a future-proofed plan, fully reflecting the needs identified by Ukraine. The plan would tackle key reforms in areas such as anticorruption, administrative capacity, rule of law, and independence of the judiciary. And it should be firmly anchored in the green and digital transitions and fundamental European values. But of course, the EU would and should not be the only one contributing to this effort. That is why we propose a reconstruction platform as part of this plan jointly led by Ukraine and the Commission and bringing together EU Member States, other bilateral or international donors, international financial institutions, and other like-minded partners. The aim of this platform would be to agree on the direction of travel and to ensure maximum synergies of all efforts. These investments will help Ukraine to emerge stronger and more resilient from the devastation caused by Putin’s soldiers. Today is another milestone on our way to more Europe. This is also about seizing the moment. And this is our moment.

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