What measures has the EU taken in response to the Russian invasion of Ukraine?
Russia invaded Ukraine on 24 February 2022 and the conflict is still raging. The war in Ukraine is having immense humanitarian consequences for the country and has triggered an unprecedented flow of refugees to various EU member states. On 4 March 2022, the Council decided to activate the Temporary Protection Directive for the first time since its introduction on 7 August 2001. Ukrainian refugees displaced by Russia’s military invasion can now seek temporary protection in the EU. Temporary protection means Ukrainian nationals can stay in the EU member states without having to apply for asylum. They have a right to housing and education and may work in the EU. On 14 October 2022, the Temporary Protection Directive was prolonged for 1 year to 4 March 2024. As from 4 March 2023, this directive has not applied to refugees with a temporary residence permit in Ukraine (e.g. for work or study) and who are therefore not Ukrainian nationals.
By February 2023, about 14 million Ukrainians had fled to the EU. By 18 April about 4 million of refugees had registered for temporary protection. This page posted by the European Commission provides up-to-date information. Until 21 April 2023, more than 92,00 Ukrainian refugees had registered in the Netherlands. More up-to-date information (in Dutch) is available on this page (in Dutch only).
The EU has imposed 10 packages of sanctions on Russia since the start of the war. They include economic sanctions, e.g., in the financial sector and bans on the import and export of certain goods. The measures are designed to: 1) weaken the Kremlin’s ability to finance the war, 2) impose clear economic and political costs on Russia’s political elite responsible for the invasion, and 3) weaken Russia’s economic base. See also this page on the European Commission’s website for further information on the sanctions.
On 28 November 2022, violation of the sanctions was added to the EU list of crimes. On 2 December 2022, the Commission made a proposal for a directive on the definition of criminal offences and penalties for the violation of restrictive measures.
Energy security and energy prices
The member states rely on Russia for some of their energy requirements, especially gas. The war in Ukraine has affected both energy security and energy prices. On 18 May 2022, the European Commission presented its REPowerEU Plan in response to the war's consequences for energy security, energy prices and the EU’s energy reliance on fossil fuels from Russia. The Commission’s plan is designed to reduce reliance on Russia’s fossil fuels in the near term and accelerate the energy transition.
Read more about the plan and resultant actions here. Established on 7 April 2022, the EU Energy Platform enables member states to work together voluntarily to secure affordable energy supplies from reliable partners.
Regulation 2022/1032 with regard to gas storage and the security of gas supply was adopted on 27 June 2022. Regulation 2022/1369 was adopted on 5 August 2022 to reduce gas demand by 15%, followed by Regulation 2022/1854 of 6 November 2022 on an emergency intervention to address high energy prices. The 15% target was extended by a year on 30 March 2023. On 18 October 2022, the European Commission issued a communication on the energy emergency and proposed a further emergency regulation to fight high gas prices and secure energy supply for the winter. This Regulation, 2022/2576, was adopted on 19 December 2022. It enabled the establishment of the AggregateEU mechanism for joint gas purchasing at EU level (one of the pillars of the EU energy platofrm).
On 22 December 2022, temporary Regulation 2022/2577 to accelerate the transition to renewable energy was adopted. It is in force for 18 months as from 30 December 2022. On the same date, the Councoil adopted Regulation 2022/2578, under which a market correction mechanism to protect citizens and the economy against excessively high prices was introduced. Agreement was reached on 4 February 2023 on 2 price caps for maritime transport of Russian petroleum products.
Financial measures to support member states
The economic sanctions, the influx of refugees, energy security and high energy prices have financial consequences for the member states. The EU has taken a raft of financial measures to meet these challenges.
Changes in EU funds flows
- Cohesion’s Action for Refugees in Europe (CARE)
Regulation 2022/562 was adopted on 6 April 2022. It allows the member states to grant emergency support within the current cohesion policy to Ukrainian refugees (Cohesion’s Action for Refugees in Europe; CARE). CARE provides greater flexibility in the member states’ cohesion policy as they may redirect unspent EU resources in the 2014-2020 cohesion funds (ERDF, ESF and EMFF) to meet migration challenges. Resources in the ERDF and ESF may also be applied for all manner of measures regardless of whether they would normally be funded from the ERDF or ESF.
The €10 billion in recovery assistance for cohesion and the territories of Europe (REACT-EU) available for 2022 could be applied to address migration challenges. REACT-EU is a top-up to the member states’ cohesion policy for 2014-2020 and has the overarching goal of recovery from the COVID-19 crisis. Expenditure on specific actions for refuges has been eligible for assistance since 24 February 2022. Regulation (EU) 2022/613 was adopted on 12 April 2022. It increases the pre-financing member states can receive from REACT-EU resources by €3.4 billion in total.
Regulation 2022/2039 was adopted on 19 October 2022 to increase flexibility to address the consequences of the military aggression of the Russian Federation (Flexible Assistance for Territories; FAST-CARE). FAST-CARE offers member states greater flexibility in cohesion policy, in part by increasing pre-financing by €3.5 billion.
- Migration and security funds
Regulation (EU) 2022/585 was adopted on 6 April 2022 to provide additional funding for Ukrainian refugees. It extends the implementation period in which funding can be awarded from the migration and security funds (AMIF and ISF) 2014-2020 by 1 year. The member states can thus apply unused funds in full. In addition, unused amounts in the AMIF that had been earmarked for other actions can be released. This is expected to release around €420 million in additional support from unused funds.
- Support for the fishery and aquaculture sector
Regulation 2022/1278 amending the regulation on the European Maritime, Fisheries and Aquaculture Fund 2014-2020 (EMFAF) was adopted on 18 July 2022. The amendment provides financial compensation for loss of income and additional costs, for the storage of products for the fishery and aquaculture sector and for the temporary cessation of fishing operations if their security is in jeopardy. These measures supplement similar crisis measures the European Commission published on 25 March 2022 regarding the EMFAF 2021-2027.
Relaxation of the Stability and Growth Pact (SGP)
Relaxation of the SGP began during the COVID-19 crisis and has been extended by 1 year to 2024 on account of the war in Ukraine. The member states’ budget deficits and public debt may now exceed the SGP’s reference values (3% and 60% respectively) without the European Commission imposing sanctions. This escape clause will be deactivated at the end of 2023. The budget rules that will apply as from 2024 are currently being revised. See this page for more information on the SGP.
Temporary crisis framework for state aid measures
To prevent unfair competition, as a rule state aid may not be awarded to enterprises in the EU. An overview of what the EU defines as state aid and how the Commission investigates it is available here. In exceptional cases, the European Commission can approve state aid subject to stringent conditions.
To mitigate the war's economic impact and support businesses and sectors badly affected by it, the Commission presented a Temporary Crisis and transition Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia on 23 March 2022. The temporary framework has been amended 3 times. Memberstates have until 31 December 2023 to grant aid to businesses affected by the sanctions imposed on Russia and compensates them for additional costs due to high gas prices. The framework also allows aid to be granted until 31 December 2025 to promote transition towards a net zero economy. More information on state aid relating to the war in Ukraine is available here.
EU member states must apply to the European Commission for permission to grant state aid in the context of the war in Ukraine. The Commission had approved over €445 billion in state aid under the temporary framework as at 20 April 2023 (as calculated by the Court of Audit). In so far as we are aware, the Netherlands has applied 3 times for state aid decisions as at 20 April 2023 involving a total amount of €3.1 billion. They include a measure to support the greenhouse horticulture sector, a measure to support small energy consumers and an aid scheme for energy intensive companies. The Commission also has given its approval to a Dutch scheme costing up to €406.4 million to support the filling of the Bergermeer gas storage facility in the context of Russia’s invasion of Ukraine.
EU measures to support Ukraine
Humanitarian and military support
In addition to receiving refugees and imposing sanctions on Russia, the EU and its member states have provided humanitarian support to Ukraine, including material support through the European Civil Protection Mechanism and military support through the European Peace Facility. As at 13 April 2023 total EU support to the Ukraine military amounted to €4.6 billion.
On 17 October 2022 the Council launched a military assistance mission for Ukraine (European Union Assistance Mission Ukraine; EUMAM). Its aim is to enhance the military capability of the Ukrainian armed forces to defend Ukraine’s territorial integrity and sovereignty within its internationally recognised borders, as well as to protect the civilian population. The mission was launched on 15 November 2022.
On 18 May 2022, the European Commission issued a communication announcing that it proposed granting new exceptional macro-financial assistance to Ukraine in the form of loans of up to €9 billion. The proposal was ratified by the European Council. The European Commission then disbursed €1 billion in extraordinary macro-financial assistance to Ukraine in early August and on 18 October 2022, 23 November 2022 and 14 December 2022 a further package of €5 billion in total. As is customary with extraordinary financial assistance, the Commission borrows funds from financial institutions and on the capital market on behalf of the EU. The Netherlands has guaranteed approximately €0.2 billion. On 9 November 2022, the commission announced a proposal to provide a stable and predictable support package for Ukraine of up to €18 billion for 2023. This proposal was adopted by the European Parliament and the Council on 14 December 2022. A first tranche of €3 billion in loans was paid on 17 January 2023, followed by further payments of €1.5 billion every month in 2023. Under the existing allocation ratios in the EU, the Netherlands guarantees approximately €1 billion. It also pays interest at about €40 million per annum. More information on macro-financial assistance to Ukraine is available on this page.
Import and export measures
On 12 May 2022, the Commission presented an action plan to establish solidarity lanes to facilitate Ukraine’s agricultural export and bilateral trade (chiefly grain). On 11 November 2022, it was announced that the Commission would urgently provide €250 million to continue facilitating the solidarity lanes. For the medium term, it will mobilise the Connecting Europe Facility and provide a further €50 million as a result of which, the total contribution comes to €200 million. In addition, the European Investment Bank and the European Bank for Reconstruction and Development will each invest up to €300 million in the solidarity lanes. See this factsheet for a summary.
As from 4 June 2022 all import duties on products originating in Ukraine were removed for a year, as were EU anti-dumping measures and exemptions for steel importeds from Ukraine. These measures are designed to stimulate Ukrainian exports to the EU and alleviate the circumstances of Ukraine manufacturers and exporters. On 23 February 2023, the Commission proposed to renew trade benefits for Ukraine for a year.
The Commission adopted a decision on 1 July 2022 under which the member states can temporarily waive customs duties and VAT on third-countrie imports of a wide range of life-saving equipment, such as food, blankets and tents, destined for Ukrainians affected by the war. The measure applies retroactively from 24 February 2022 and will be in place until 31 December 2022. On 19 April, the commission decided at the request of 10 member states, including the Netherlands, to extend the exemption for these member states by a year until 31 December 2023.
This page presents information on the various forms of EU assistance to Ukraine.
What do the EU measures in response to the war in Ukraine mean for supreme audit institutions?
At the beginning of March 2022, the Netherlands Court of Audit decided to suspend its participation in activities chaired or organised by the Accounts Chamber of the Russian Federation. EUROSAI has also suspended its work with the audit institutions of Russia and Belarus. The Russian audit institution no longer chairs INTOSAI.
For information on EUROSAI and INTOSAI, see this page.