The issue of financing Ukraine in a situation of war with Russia has been much discussed.
Ukraine needs to finance its own Public Administrative Sector in addition to financing the war effort.
There are, as is known, those who understand that Ukraine should not be financed, in order not to “leverage” the war with the “poor Russians” who are, naturally, “well-intentioned”.
Obviously, anyone who thinks this way is in favor of the surrender of Ukraine and, therefore, the partial or total annexation of this country by the Russians.
But as, fortunately, the majority of EU states do not opt for this path, it is natural for European leaders to think about adopting a financing method for the so-called Ukraine.
One of the hypotheses would consist of taking advantage of Russian assets frozen in Europe, which, from a strictly ethical point of view, would make perfect sense.
The EU decided – and rightly so – to freeze the aforementioned assets for an indefinite period, which will lead to Russia itself and its allies in the EU (namely, Hungary and Slovakia) raising the problem of the legal legitimacy of the decision and, even, its own legality, given that the defenders of this initiative do not correspond to the entities that have expressed the greatest concern with respect for international law.
In order to transform the financing model to be implemented into something that is difficult to question, there will always be the possibility for European countries supporting the solution in question (including European countries not belonging to the EU) to ensure, through collateral guarantees, the payment of the sums to be released, each issuing a guarantee corresponding to a pre-fixed quota, a guarantee that will not constitute an integral part of the public debt of the country in question, but rather an indirect debt that can only be converted into direct debt under certain circumstances.
This is a solution of unquestionable legality, which guarantees the position of Brussels and Belgium itself, which can satisfy the interests of the European Commission and the European Central Bank itself and which will not have, in the short and medium term, negative implications on the Public Finances of the European States that become involved in this methodology.
And, finally, through this methodology, Ukraine’s financing could even be guaranteed for the next two and a half years.
Faced with Europe being a Russia with imperialist designs and a US complicit in Putin’s strategy, there is no other solution for the EU and other countries associated with the war effort, such as the United Kingdom and Norway, other than to continue supporting Ukraine and carry out a genuine rearmament effort.
The corresponding alternative will always be a capitulationist option.
And the author of these lines suffers from “capitulationist allergy”.
No more, no less…
Economist and university professor
Write without applying the new Spelling Agreement