EU fails to find funding to support regions bordering Russia – Politico

The European Commission has prepared a plan to support EU regions on the eastern border with Russia, but the EU budget through 2028 does not provide for direct funding for these purposes. Brussels is proposing to attract investment from international financial institutions instead.

Politico reported this, citing sources in the European Commission.

Cuts in investment, a decline in freight volumes, and a downturn in tourism have hit the Baltic states, Finland, and Poland first and foremost, the outlet notes. The Commission’s strategy is aimed at encouraging international financial institutions to provide financing to these regions, without allocating any new EU funds.

A priority of the plan is to revive border areas whose economies have fallen into decline amid the conflict, regardless of the reasons. Brussels is concerned that population outflow from border regions could affect the EU’s ability to protect its frontier, an anonymous Commission official told Politico.

“Europe’s security begins at its eastern border. A strong, prosperous, and resilient eastern border is necessary to protect the entire continent,” the draft plan reviewed by the newspaper says.

European officials also fear that the economic difficulties faced by residents of these regions could lead to rising support for fringe parties.

According to Politico, the strategy will be presented by Commission Executive Vice-President for reforms Raffaele Fitto. He is expected to say that, under the plan, global financial institutions should unite within an “EastInvest platform,” which would start operating immediately to “meet investment needs” and provide financial support to the EU’s eastern regions.

Brussels also intends to allow Finland, Poland, Estonia, Latvia, and Lithuania to use money from EU regional development funds to provide guarantees to the European Investment Bank, the European Bank for Reconstruction and Development, the Nordic Investment Bank, and national banks in order to facilitate investment in eastern regions.

The aim of the measure is to provide low-cost loans to businesses in regions bordering Ukraine, given that they would otherwise struggle to access financing.

Other EU countries that border Ukraine—such as Romania, Hungary, and Slovakia—could also join later, one Commission representative told Politico.