A revision of the multi-annual financial framework for the period 2021-2027 is necessary to show whether the EU's budget can still cope with today's challenges such as the Ukraine war and the energy crisis, European Commission Vice President Dubravka Suica said on Thursday.

“That revision will be necessary,” Suica said at a meeting of the European Affairs Committee of the Croatian parliament on Thursday while presenting the EC’s work program for 2023.

She recalled that 70 percent of this “unique” program is based on the conclusions of the Conference on the Future of Europe, that is, on citizens’ proposals, and announced that in the future citizen panels, which will be chosen by random sampling, will be organised “before any major legislative procedure.”

“We are not departing from the original priorities from 2019 with regard to the digital and green transition, which is also accompanied by demographic transition, while we are dealing with the crises that have come our way, such as Brexit,  COVID, the war in Ukraine and the energy crisis,” said Suica.

She said that the Union has pledged €19 billion in aid to Ukraine. “We are talking about support from the EU budget amounting to €12 billion and bilateral support from member states of €7 billion.”

“When you add new macro-financial assistance of €18 billion planned for 2023 in the form of loans under very favourable terms, total aid amounts to €37 billion,” Suica said, adding that the first tranche of macro-financial assistance will be paid in January.

Russia will have to pay

The EC’s position is that Russia will have to pay for the destruction it caused to Ukraine, she said.

“We will see in what effective ways the reconstruction of Ukraine can be co-financed, including the use of frozen assets,” said Suica, recalling that member states have so far frozen €19 billion of assets owned by “Russian oligarchs and other supporters of President Putin.”

Swedish Ambassador to Croatia Diana Madunic, who presented the priorities of the Swedish presidency of the Council of the EU, was the first to point out the security of the Union in relation to the war in Ukraine, which “we must support politically, economically, militarily, legally, and with humanitarian aid.”

“It is extremely important that we stand together in sanctions against Russia. EU unity is a very important tool and we must be ready for long-term engagement,” said Madunic.

Madunic highlighted the promotion of the competitiveness of the Union as the second priority, and the third priority is climate change and dealing with climate transitions.

€3 billion for the hydrogen market

The EC will propose a broad reform of the EU’s electricity market, which includes the separation of gas prices from electricity prices and the establishment of a hydrogen bank, Suica noted.

“We must be able to withstand price changes and provide electricity at an affordable price. In order to encourage the development of a green economy based on hydrogen, we are proposing to establish a hydrogen bank this year,” Suica said, adding that the EC would invest €3 billion in launching a European hydrogen market.