The financial fight over a proposed €20bn EU fund for Ukraine’s army

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Good morning. EU foreign ministers will today grapple with how to respond to Turkey’s request for new impetus in its long-frozen bid to become a member of the bloc. A paper prepared for the discussion skirts the accession question and suggests “constructive engagement” instead.

The ministers will also discuss a proposal to significantly increase the EU’s fund to finance weapons for Ukraine. Below, I explain why that’s controversial. And our Athens correspondent has the latest on huge forest fires in Greece caused by extraordinarily high summer temperatures.

Financial warfare

Tired of regular fights over regular €500mn top-ups of a fund for weapons for Ukraine, the EU’s foreign policy tsar has a plan: one massive top-up; one massive fight.

Context: The European Peace Facility is funded by EU governments to pay for military projects. In response to Russia’s full-scale invasion of Ukraine, Brussels took a historical decision to use it for weapons for Kyiv. That has rapidly exhausted the pot, prompting recurring increases to keep it solvent.

Enter Josep Borrell. The EU’s chief diplomat has proposed a Ukraine-dedicated cash pile worth €5bn a year over four years, to pay for weapons, training of troops, and whatever else might crop up as the war continues.

Supporters argue that the EU has promised Ukraine long-term security commitments, and needs to back that up with action.

“We’re talking about devoting a substantial budget . . . to guarantee our substantial commitments for the long term,” said a senior EU official. “It is the right moment to make [military support] more predictable.”

Foreign ministers will have a first debate over it today, with the aim of getting it in rough shape before it reaches EU leaders in October.

The problem is that the idea, first reported by Politico, has not been universally welcomed, notwithstanding an almost-unanimous desire to keep supporting Kyiv.

The timing is painfully awkward. State budgets across the EU are under immense strain at the moment because of high inflation, high interest rates and unexpected costs (such as the war). That’s also playing out at the Brussels level, as the EU fights over how much to increase its own internal budget (which is separate from the weapons-buying fund). But whatever the purpose, each euro comes from the same purses, controlled by the same 27 finance ministers. Few have many to spare.

Then there’s the Hungary factor. Is a country that has consistently dragged out debates over pledging an additional €500mn on weapons to fight Russia — and is currently blocking the latest attempt to do that — going to agree a €20bn increase?

“Look, it is not our proposal,” said one member state diplomat, diplomatically.

Chart du jour: Slow progress

In Germany’s eastern coal mining region of Lausitz, people used to despise climate activists. But with the clock ticking on climate targets, coal giant Leag has pledged to reinvent itself as a powerhouse of renewable energy.

Hot in here

Wildfires continue for a fourth day west of Athens, burning properties and forcing hundreds to leave their homes as temperatures, starting today, are projected to reach up to 43 degrees Celsius and could last for days, writes Eleni Varvitsioti.

Context: Greece is bracing itself for a second heatwave just as it recovers from its first of the summer. Temperatures have been hovering near records in other parts of the Mediterranean, which, according to scientists, is a consequence of climate change.

Greece activated the EU’s civil protection mechanism shortly after the fires started on Monday. Today, firefighting teams are expected to arrive from Poland, Romania and Slovakia, adding to the four from Italy and France that were already operating outside Athens. Israel also pledged to send two firefighting planes.

Another heatwave could exacerbate the wildfires, according to scientists. “Heatwaves are usually connected to forest fires particularly if the previous season is dry,” Greece’s climate envoy Christos Zerefos said.

“This winter, we had 50 per cent less rainfall and snow in the country than in other years and a mild winter in Greece, Italy and partially in Spain, which makes the situation even more dangerous regarding wildfires,” said Zerefos, who also leads the research centre for atmospheric physics and climatology at the Academy of Athens.

And things don’t look like they will get better. Zerefos said such heatwaves “might be very unusual now, but it could become the norm”. His research also shows that large parts of the country will be affected by desertification over the coming decades.

“Unfortunately, all the models that we use in the Academy of Athens lead to the same conclusion,” he said. “If we don’t follow the suggestions of the Paris agreement, then from 2050 onwards there will be the point of no return, and we will have a heatwave every week.”

What to watch today

EU foreign affairs ministers meet in Brussels.
EU justice and interior ministers meet in Logroño, Spain.
Turkey’s central bank expected to announce next interest rate move.