Dombrovskis: “No stable economic growth without lasting peace in Ukraine”

Brussels—Whatever is decided, Europe must play a role because what happens in Ukraine will determine much or most of Europe’s immediate economic future. Economy Commissioner Valdis Dombrovskis warns, “Without a lasting peace in Ukraine, there can be no stable economic growth or security for Europe.” 

Economic ministers from the EU countries with the single currency are meeting in Brussels for the Eurogroup summit. Still, the most important meeting of the day takes place in Paris, at the leaders’ summit hosted by French President Emmanuel Macron. It is no coincidence that Dombrovskis is referring precisely to the meeting in France, and he wants to emphasize the link between Ukrainian destiny and European growth. “We must achieve a just and lasting peace,” he insists as he arrives for the Council proceedings. But above all, “there can be no peace without Ukraine and the European Union,” and therefore without their involvement.

The handling of the Russian-Ukrainian conflict, as well as the European weight in the issue, inevitably ends up being projected onto the table of the eurozone economy and finance ministers. What animates the 20 ministers, however, is the debate over public spending to support the defence industry and the building of a truly European security. Belgian Finance Minister Vincent Van Peteghem evokes “common European financial instruments,” while Dutch Minister Eelco Heinen responds coolly to the proposal to freeze the stability pact limited to public defence funding. “I haven’t seen any proposals yet,” he cuts short.

The Netherlands, like its European partners, will be satisfied shortly. As for the details of the proposal to suspend the common fiscal rules, “we will clarify in the coming weeks,” Dombrovskis explains. Work is already underway in the Commission, and time is needed to define the strategy: “If we were to propose flexibility for countries, the approach to fiscal policy would change, but by how and how much is not yet determined.”

Meanwhile, from the president of the Eurogroup, Paschal Dohonhoe, comes an openness to more government spending on security and defence: “Within the Stability Pact as reformed, there is flexibility, and it is clear that defence spending will increase.”