Estonian plan: France and others are pushing a 100 billion euro loan plan to defend Ukraine and Europe.
Strategy for defeating Putin even without the financial package blocked in US Congress: using loans, Eurobonds, loans on capital markets, Russian assets and other tools.
Below is an overview of the topic, which concerns the efforts of European countries to find orders of magnitude more resources to help Ukraine. Especially in a situation where a $60 billion aid package was still blocked in the US Congress in the first quarter of 2024. This page is mainly presenting links to main information resources for the topic and serves as information base for Czech/European public campaign supporting the plan – we are Czech citizens supporting Ukraine and therefore defense of the whole Europe.
Update: campaign page Estonian plan for Ukraine
Czech version of the article: Estonský plán pro Ukrajin
German version of the article: Estlands Plan fur die Ukraine.
Estonia’s plan to spend over €100 billion a year on the defence of Ukraine
Estonia has come up with a plan that we should raise a total of €120 billion extra every year for the defence of Ukraine (and thus Europe). This is based on a calculation of what is needed for Ukraine to win – because Russia cannot afford to spend as much money as Western countries for the next few years, because the combined defence spending of the Ramstein Group is 13 times greater than Russia’s, and unlike Russia, these countries have access to resources from the financial markets. Aim is for Western allies to allocate 0.25% of their GDP to aid Ukraine, marking a strategic and manageable investment.
Source 1: Euractiv report on the Estonian plan (refers to source 3 below: https://www.euractiv.com/section/defence-and-security/news/estonia-puts-forward-e100-billion-funding-plan-for-ukraine/
Source 2: Report translated into Czech by CTK: https://www.ceskenoviny.cz/ukrinform/cesky/zprava.php?id=1192320
Source 3: Detail of the Estonian Ministry of Defence plan – the original plan in detail: https://kaitseministeerium.ee/sites/default/files/kaitseministeerium_2023veeb_17.12.pdf
European summit on bonds, Eurobonds, loans for the defence of Ukraine and Europe
The important thing is to get additional resources – tens of billions – quickly. This is important in view of the developments on the front in Ukraine and also because of the stalled aid package in the US and the presidential elections. Raising an additional EUR 100 billion-plus for the defence of Ukraine can be done by direct payments from budgets or by borrowing on the financial markets. These loans can be guaranteed by groups of countries in the Ramstein Group, or by the EU as a whole, or by individual EU countries.
We are larger than the task.
Ministry of Defense, Estonia
The leaders of France, Estonia and other countries have drafted a letter, a plan for which they want to gain the widest possible support. It is not yet public (Politico reports on it, see below) but it says that, as per the coronavirus, we should borrow together. The EU summit in the second half of March 2024 has only opened the discussion, the report is to be delivered by the European Commission by June – to explore all options. However, time is fast running out and Russia is advancing on the front – that is also why this summary has been produced, to encourage a much more rapid debate on an urgent increase in funding for Ukraine’s defence. There are different options for funding sources, the important thing is to save lives, to prevent breakthroughs at the front.
Source 4: Only Voxpot has written about this very important topic in Czech (thanks for that!) https://www.voxpot.cz/pujcte-taky-zbrojarum-politici-tlaci-na-banku-eu-at-uvolni-pravidla/
Source 5: In English, Politico wrote just about the June delivery: https://www.politico.eu/article/russia-doubles-down-ukraine-war-while-eu-leaders-divided-how-finance-weapons/
Source 6: Le Monde also covered the summit in detail – the rest of the article is locked, but it’s in line with the above – there is no consensus yet, but everyone is becoming aware of the urgency of the situation and it cannot be ruled out that even cautious countries will have to lean towards, for example, loans for the defence of Europe. https://www.lemonde.fr/en/international/article/2024/03/22/eu-leaders-consider-joint-debt-plan-to-arm-ukraine_6645413_4.html
Source 7: This is about the aforementioned letter to the EC from France, Estonia and others. There is an effort to involve as many EU countries as possible: https://www.politico.eu/article/france-pitch-radical-joint-eu-borrowing-plan-pay-defense/
Leveraging Russian assets to acquire much greater resources on financial markets: for defence of Ukraine and Europe
A clever way was mentioned by the Belgian Prime Minister: to use frozen Russian assets for guarantees and loan repayments. These assets can therefore be used in a leveraged way to raise much greater resources on the financial markets. Some of these previously unthinkable procedures may have to be accelerated because of the unfavourable developments on the front. They are gradually being considered by more and more EU countries that previously rejected joint loans.
Source 9: On financing options, and there is a quote from the Belgian Prime Minister mentioned – about using Russian assets to raise much more money on the financial markets: https://finance.yahoo.com/news/eu-starts-long-costly-path-170807532.html
Source 8: Again on the discussion of joint debt, bonds, Eurobonds https://euobserver.com/eu-political/158266
The US also wants to create a special instrument – a $50 billion loan backed by Russian assets
The U.S. has proposed to its G7 allies to create a special facility to issue at least $50 billion worth of bonds backed by profits generated by frozen Russian assets and use the proceeds to support Ukraine, according to people familiar with the plan.
Summary and next steps
The European Union and the G7 countries are looking for ways to raise more funds for the defence of Ukraine, which urgently needs more help. We will do our best to report on these plans – in cooperation with pulsevropy.cz and other civic groups.
Update: details how to implement Estonian plan – European joint debt options for Ukraine defense.
If you have questions and comments about the text, you can write to us at info(..)actionwithukraine.net
Updates – support by EU parties
EPP group