The European Commission has borrowed €500m (£400m) in the capital markets to lend on to Ukraine, part of a €1.6bn (£1.3bn) programme of so-called Macro-Financial Assistance (MFA) which is meant to draw the former Soviet bloc country closer into the orbit of the EU under the guise of “sharing the benefits of the EU with neighbouring countries.”
The money was sent to Ukraine today, the first slice of the second MFA agreed with Ukraine. It follows a disbursement of €100m (£80m) on May 20 from the previously agreed MFA programme.
Olli Rehn, European Commissioner for economic and monetary affairs, said in a press release: “Today’s disbursement is a further concrete sign of European solidarity towards the people of Ukraine. It is vital that Ukraine seizes this opportunity to take forward reforms to deliver budgetary stability, sustainable growth and job creation.”
Rehn is also commissioner for the euro, and those who have followed his speeches through the years of the eurocrisis and the continuing recession in the eurozone will recognise that phrase about “budgetary stability, sustainable growth and job creation.” It is the one he has used in his frequent lectures to the vastly-indebted eurozone governments, demanding they keep the EU-designed policies of high tax and government spending cuts in place.
The irony is that the member states of the EU are now being forced to back debt so the commission can lend money to Ukraine, which used to have access to loans from Russia. Yet the EU member states themselves haven’t even begun to deleverage in the six years since the collapse of Lehman Brothers.
Wolfgang Munchau, a columnist with the Financial Times, analysed the “horrors” of European debt this week and foresaw the eurozone heading into “a long period of slow growth, low inflation, and a constant threat of insolvency and political insurrection.”
Total loans from the EU of debt “horrors” to Ukraine now come to €1.61bn (£1.3bn), with €1.01bn (£800m) still to be handed over after today’s disbursement.
In short, the EU, made up of the biggest debtors in the world, is letting its eurocrats pile up further debt to make loans to a corrupt, unstable former Soviet bloc country as a tactic to extend their territorial reach.