Germany Rejects Pooling European Union's Debt To Rebuild Ukraine

Germany's finance minister today ruled out any joint European Union (EU) borrowing to help cover the massive cost of rebuilding war-scarred Ukraine, after the idea was floated by top European officials.

After chairing G7 talks in Germany that saw countries pledge nearly $20 billion (19 billion euros) in aid to Ukraine, Christian Lindner said there would be no repeat of the EU's landmark post-pandemic recovery fund, known as "Next Generation", that is being financed by common debt.

"If there is any consideration of doing something like 'Next Generation EU' again, then the answer would have to be no. This was a one-off opportunity," Lindner told reporters in Koenigswinter.

Top European Union officials earlier this week urged member states to be ambitious in helping Ukraine rebuild after the war, possibly using the pandemic fund as a model.

With the war still raging, the extent of Ukraine's reconstruction needs is not known, but the European Commission believes the damage already done is already in the hundreds of billions of euros.

"There is a time, sooner or later, when we will have to look at funding on a European scale as we did for Covid," Commission Vice President Frans Timmermans said in Brussels on Wednesday.

In a document reviewing ways the EU could help Ukraine, the Commission said the rescue of Ukraine could be paid through added contributions to existing EU programmes and boosting the EU budget.

But, it said, "given the scale of the loans that are likely to be needed, raising funds on behalf of the EU or with national guarantees from member states is among the options being considered."

The 800-billion-euro Next Generation EU fund had to overcome deep reticence by so-called "frugal" member states such as the Netherlands and Denmark to come into being.

Aware of the headwinds the suggestion of new common debt might face, an EU official said the commission's proposals remained intentionally vague.

"We are inviting member states to play with ideas and see whether there is a willingness to go along and take this further," the official said.

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