Michel: It’s time to take radical steps. The EU economy is to go into “war mode”

For decades, Europe has not invested enough in defense. Now, as we face the greatest security threat since World War II, it is high time to take radical and concrete steps to be prepared to defend ourselves and shift the economy to war mode

– wrote the President of the European Council, Charles Michel, in a letter inviting the EU leaders to the summit.

The European Union calls for preparation for war. There is a plan for war bonds

At around 3 p.m. on March 21, a summit of European Union leaders begins, who will discuss Ukraine and switching the economy to “war mode.” Charles Michel explains in his letter that this means “spending more, buying together and therefore more efficiently.” The President of the European Council believes that we must also enable the defense industry to have greater access to private and public funds and abolish regulatory barriers. “Building such a strategic approach to defense strategy requires strong leadership and a clear understanding of how urgent the task is before us. I expect the European Council to rise to this challenge.”

The British “The Guardian” points out that such language reflects the growing awareness that the European Union must take steps that will help Ukraine win the war and that will secure Europe in the long term. On Thursday, European leaders will talk about war bonds. The idea came from several countries, including: from French President Emmanuel Macron and is intended to be a way to finance greater defense spending. The solution is supported by Estonia, but opposed by more frugal countries, such as Finland and the Netherlands, which do not want to create a common European debt and burden taxpayers with it for the next decades.

The alternative would be to raise taxes or cut public spending, which could be used for defense, but most politicians found this an “unpalatable” idea. Another diplomat allegedly proposed increasing the mandatory defense spending of member states to 2 percent. GDP. This would generate EUR 80 billion.

Yet another idea is the confiscation of billions of euros in interest from Russian assets, which would generate a profit of EUR 27 billion for Ukraine over the next four years. This would be an unprecedented move that no one has ever decided on before, so there are doubts about its legality. But one source says some G7 countries have gone even further and are considering whether they could use frozen Russian assets such as gold, cash and bonds. The proposal to transfer some of Russia’s assets to Ukraine is already on the table in the EU.

Ukraine may be co-financed with Russian money. The EU wants to return confiscated assets

– Ukraine needs urgent military assistance – added Charles Michel. The leaders of twenty-seven countries are therefore to talk about transferring profits from the assets of the Central Bank of Russia frozen in the EU to Ukraine. Yesterday, the European Commission sent its proposals on this matter to member states. He estimates that Kiev could receive between two and a half and three billion euros annually. Traditionally, President Volodymyr Zelensky will connect with the leaders remotely at the beginning of the summit.

The summit is also expected to include a declaration of increased supplies of ammunition and weapons. The European Commission has already proposed financing the purchase of military equipment from the profits of Russian assets frozen in the EU – 90 percent would go to weapons and 10 percent to reconstruction. – It’s about exchanging banknotes for weapons. Ukrainian soldiers do not fight with banknotes, they need military equipment to defend their citizens, EU foreign policy chief Josep Borrell said yesterday.

Most countries, including Poland, support this solution. He explains that the focus should be on preventing further damage to Ukrainian infrastructure and that the goal now is not to rebuild Ukraine, but to defend it. However, some countries have doubts. No decisions on this matter will be made at the summit, but the discussion will show whether there is a chance for the European Commission’s idea to be quickly implemented.

At the meeting, some diplomats expect a discussion on the possible start date of membership negotiations with Ukraine. In this case, Hungary is throwing obstacles in the way of the authorities in Kiev. They say that Ukraine has not yet met all the conditions and does not guarantee respect for the rights of national minorities, including the Hungarian one. “This matter will not be resolved before the European elections, which start in early June,” says one of the EU diplomats. But there is a belief that such negotiations could begin at the end of June, of course, if there is unanimous consent of the countries.