Economic and financial consequences of Russia’s military aggression against Ukraine

F.P. Report

BRUSSELS: The Council had an exchange of views on the economic and financial aspects of Russia’s military aggression against Ukraine. Faced with a deteriorating economic situation due to the war and rising inflation, ministers discussed the coordination of economic policy responses. They also exchanged views on the European response to Ukrainian financial needs, including possible additional macro-financial assistance from the EU. In addition, they were given a state-of-play by the European Commission  on the implementation of economic and financial sanctions.

EU economy and finance ministers will continue to follow these developments closely.

Economic recovery in Europe

Ministers took stock of the implementation of the Recovery and Resilience Facility (RRF), following a presentation by the European Commission on the state of play.

The RRF is the EU’s programme of large-scale financial support in response to the challenges the pandemic has posed to the European economy. The facility’s €672.5 billion are used to support the reforms and investments outlined in the member states’ recovery and resilience plans.

The European Commission also presented its RePowerEU plan which was published on 18th of May, which was followed by a discussion on structural solutions to the energy crisis.

Capital Markets Union: European long-term investment funds (ELTIFs)

The Council adopted its position on a proposed modification of the regulation on European long-term investment funds (ELTIFs) in order to make these investment funds more attractive. This proposal is part of the Capital Markets Union (CMU) package, a plan to create a single market for capital in order to get investments and savings flowing across all member states for the benefit of citizens, businesses and investors.

The ELTIF regulatory framework sets out detailed fund rules on eligible assets and investments, diversification and portfolio composition, leverage limits and marketing. ELTIFs are the only type of funds dedicated to long-term investments which can be distributed on a cross-border basis to both professional and retail investors.