Why EU leaders are meeting in Paris to show that support for Ukraine is unwavering

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Good morning. Russia's large-scale war of conquest against Ukraine is now in its third year, and the conflict that has claimed more than 150,000 lives shows no sign of ending.

Today, our correspondent in Paris reviews a summit of Ukraine's allies aimed at showing that support for Kiev will outlast Russian aggression. Our financial correspondent reports on the various financial exercises being considered to fund the much-needed boost to Europe's defense industry.

Calm down and continue

Western leaders meeting in Paris today to show unity on Ukraine have a dual mission in mind: to send a signal to Vladimir Putin of their resolve and to remind any critics at home why Kiev needs support, writes Sarah White.

Context: French President Emmanuel Macron is hosting 20 heads of state and government to discuss how best to reaffirm support for Ukraine as Russian attacks intensify two years after it began its full-scale invasion.

More coordination on how to ramp up military support with additional weapons to fill ammunition shortages in Ukraine will particularly be at the forefront of the leaders' minds, although the summit will not include specific commitments on equipment.

The event, attended by German Chancellor Olaf Scholz, Polish President Andrzej Duda and Dutch Prime Minister Mark Rutte, will be the latest attempt to gather momentum, two days after a G7 meeting in Kiev that many leaders – including Macron – did not attend. person.

“The first goal will be to refute any impression that things are falling apart. There is no fatigue [in supporting Ukraine]An Elysee official said the leaders wanted to “raise doubts about President Putin.”

They added, “The mobilization of Europe and its allies is sound and will be strengthened as a result of Russia's aggression.” “We are neither ominous nor gloomy.”

In a sign of the importance of Western support, Ukrainian President Volodymyr Zelensky warned yesterday that Ukraine must receive a $60 billion US aid package currently stuck in an impasse in Congress within a month, otherwise “our position on the battlefield will be weaker.”

In Europe, support for Kiev through budget financing, military supplies or favorable trade terms has sparked intense discontent, including among protesting farmers.

At an agricultural fair in Paris on Saturday, some farmworkers criticized Macron over rising EU imports of Ukrainian chicken. More broadly, Kiev's funding efforts come at a time of tightening government budgets and, in the case of France, cuts in domestic spending.

“We see some concerns in public opinion in some European countries, including on the agricultural front,” the Elysee official said. “Beyond this particular issue, there is a need to bring public opinion in tune with what is at stake.”

Today's schedule: Safe as home

The widespread decline in house prices in advanced economies has largely faded, according to an analysis by the Financial Times, leading economists to predict that the deepest property decline in a decade has reached a tipping point.

Defense financing

EU finance ministers meeting over the weekend in Ghent discussed ideas on how to finance Europe's defense sector, the EU's latest priority, writes Paula Tama.

Context: Russia's war in Ukraine and Europe's unfortunate inability to produce enough materials in response to keep Kiev adequately armed have led to a groundswell of demands from politicians across the EU to spend more on the defense industry.

The Czech delegation had a counter-intuitive proposal: to include defense investments under the heading of “social bonds” in the EU, which would be used as a determinant for socially sustainable investments, just as the EU green bond standard does for climate-friendly investments.

The Czech logic is that “supporting a competitive European defense industry is socially responsible,” Minister Zbynek Stangora wrote in a letter distributed to his peers: “Such a move would be a strong signal to investors if it included the defense industry.”

Although it is far-fetched and perhaps a far cry from the masterminds behind the European Commission's “classification”, it is not impossible. A 2022 report found that social investment classification needs to exclude certain types of weapons banned under international treaties, such as nuclear warheads or cluster bombs, but not all weapons are intrinsically harmful.

A separate discussion on whether to expand the EIB's mandate to finance ammunition and weapons received support from some, such as Finland, and opposition from militarily neutral countries such as Austria. Most countries said this matter needed further discussion.

As a compromise, EIB President Nadia Calviño promised to report back within two months on “the scope and definition of dual-use technologies and equipment,” in which the bank is entitled to invest under its current mandate, to see if it needs to. He explained.

Don't expect this discussion to end.

What are you watching today?

Polish Prime Minister Donald Tusk visits his Czech counterpart Petr Fiala in Prague.

European Central Bank President Christine Lagarde speaks at the European Parliament's general debate on the ECB's annual report for 2022, from 1700.

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