Economic and financial impact of Russia’s aggression against Ukraine

F.P. Report

BRUSSELS: The Swedish Presidency presented its work programme for the first semester of the year in the field of economic and financial affairs.

The Swedish Presidency is operating in an environment of great economic uncertainty, with high inflation, a serious energy crisis and rapidly rising interest rates curbing consumption, production and investment. Member states’ governments are under severe pressure to manage the repercussions for households and businesses. The Presidency will strive for unity in this challenging situation, and for effective and wise use of the joint instruments that are in place.

Ministers exchanged views on the economic and financial impact of Russia’s war against Ukraine. The Commission updated ministers on the economic and financial situation in Ukraine as well as on the implementation of the EU’s macro-financial assistance to Ukraine. In December 2022, the Council and the European Parliament adopted legislation to lend Ukraine an additional €18 billion in 2023. The European Commission signed a memorandum of understanding with Ukraine yesterday and the first part of the assistance amounting to €3 billion was disbursed today.

We are accelerating our macro-financial assistance to Ukraine at a critical moment in time. Work is progressing fast in order to make sure that the first disbursement of the agreed €18 billion, around €3 billion, reaches Ukraine immediately. It is one of our key priorities to not only provide immediate liquidity support, but also to take work forward on the long-term reconstruction of Ukraine. I will work to ensure constructive discussions and progress on ways in which the EU can support Ukraine, together with bilateral partners and international financial institutions.

Recovery and Resilience Facility

The Council adopted an amending implementing decision as regards the recovery and resilience plan of Luxembourg. This is an adjustment of technical nature. Its purpose is to take into account the updated reduced maximum financial contribution (€ 82.7 million instead of € 93.3 million).

Luxembourg had been among the very first member states whose national recovery and resilience plan was greenlighted (on 13 July 2021).

During 2023, it is expected that gradually each of the 27 member states will request implementing decisions concerning updates to their national recovery and resilience plans at least once, in order to access the new REPowerEU grants, or to request available loans, or to take into account the updated RRF allocation.

European Semester 2023

The Council initiated the annual European Semester process for the monitoring of the member states’ economic, employment and fiscal policies. It adopted conclusions on the 2023 alert mechanism report, as well as conclusions on the 2023 annual sustainable growth survey. It approved the 2023 recommendation on the economic policy of the euro area. The latter will be submitted to the European Council for endorsement at its meeting in March before it can be adopted by the Council at one of its upcoming Ecofin meetings.