US, European Ukraine Support Has Momentum: EIB's Calvino

We’ve talked a long time about a lack of cooperation, maybe worldwide, a breakdown between the United States and what the Europeans need and what Ukraine ultimately wants. Did you sense the same thing at all in Washington? Are we coming together or moving apart? We’re definitely coming together. Indeed, I think it was a very productive spring meetings week. We had many exchanges and I really see a momentum in coming together and supporting Ukraine very strongly, but also deepening our cooperation within the multilateral Development Bank family to contribute to climate change financing, peaceful and and more, how would I say sustainable world going forward. We’ll get some more details on your lending plans in just moment. There has been a sense of fatigue in Congress around what is happening with Ukraine in its war, its fight against Russia. There are some people asking whether they’re there is a different way, whether this should be something we continue with, stick with, continue funding what looks like maybe another ending war. What would your view on that argument be? Well, absolutely, we need to support Ukraine. It is, it is a, a very serious situation that we are living. It’s a threat to democracy at the end of the day. And, and the way we see things I think in the US and, and Europe too. And so from the European point of view, there’s no doubt our support to Ukraine is unwavering. I think the decision that has been taken by the US to provide support for more than $60 billion is very valuable. And these joins also the previous decision of the European institutions to provide €50 billion in the Ukraine facility, which we will manage at the European Investment Bank. And I think it will provide much a much valuable support for the reconstruction as well as the military effort, of course. But President, did you see the vote counts on those aid bills? So when you look at something like the Indo Pacific, it was 385 to 234 in the House. When it comes to Israel, it was 311 to 112. It barely got through when it came, sorry, excuse me, to Ukraine. How concerned are you about how deeply divided U.S. politicians are about aiding Ukraine over, say, other issues like Israel and Taiwan? I really think that we should continue to support Ukraine. As President Zelensky was just saying on the screen, they have a chance if we continue to support them from the European point of view, You know, Ukraine is our neighbor. It is a prospective member of the family, if I can say it this way. And thus we need to ensure that we keep a secure environment in the region. The other conflicts are just as important. I mean, the Middle East situation is very is very worrying. It’s a source of concern for all of us. And we should try to stop that war and that that conflict, you know, as soon as possible. But Ukraine should not be forgotten. But in the numbers, it shows that Ukraine was the hardest one for lawmakers to get through. What does this mean potentially if you were say to deal with a different administration, a Trump administration? Well, I wouldn’t like to speculate on on US politics and I wouldn’t dare to comment on the internal wheelings and dealings. But I think the most important news we have today is this got through more than €60 billion of dollars support. And these will provide a very valuable support to Ukraine at a crucial point in the in the conflict in the war. President Kavino, how much is this actually the uncertainty helping you to raise money for military efforts within Europe to bolster military spending within the continent? Well, it’s obvious that, you know, some people woke up to the fact that we were a more fragile that maybe we thought because of the war in Ukraine and the unwarranted aggression by Russia. Many member states, the front line member states, I think we’re already wide awake and very aware of the challenge of having this kind of neighbour. But you know, it is it is absolutely clear we need to step up and support Europe’s security and defence industry and the European Investment Bank can play a role in that. When you talk about financing it, how much are you on board with the idea of monetizing Russian assets that are harbored in Europe, maybe in tandem with the United States in terms of coming up with some sort of plan? It’s very important I think that we act united and so the G7 discussions are extremely valuable so that we move ahead as one. Of course the situation is not comparable between the US and the and Europe in terms of the volume of assets we are discussing. And on the European side we are making progress. The European Commission has put forward a step by step plan and and so you know we’re making some progress in making sure that these assets are put to to good use in supporting Ukraine, in supporting Ukraine. Does it also include in investing in some of the military development in Europe? I think this is a bit, you know, too, too soon to say how, how is the the best use of these assets. Just see that we are really unwavering in our support to the country and we’re making progress in mobilizing all sources of financing to provide that important support. When it comes to Russian assets, particularly the ones in Europe, there’s lots of different things being thrown around on how to actually monetize it. Do you expect a decision when the leaders meet in June and Pulia I, I certainly think this is going to be on the table. And there it is a different issue to talk about the assets than talking about the proceeds coming from those assets. I think there is more unanimity on the second than the former. Many considerations are on the table and we need to calibrate well our decisions so as to make sure that there are no unwarranted side effects. I just wanted to wrap things up. President Cavena, with the changes you’ve proposed to the EIB, which is a plan to ultimately make it easier to fund defence projects, could you talk to us a little bit about that? What can we expect? Are these changes going to go through? I I certainly think so, yes. For the past eight years we’ve been already financing Europe, security and defence industry. What we are doing now is adapting our lending policy whilst preserving a very strong financing capability capacity. I mean the EIB has a AAA plus consideration in the market. We are a very strong player in financial markets. Only last week we had an auction. I was following your your program this morning and you know I was it. It is impressive because last week we did a five year bond of 5 billion issuance which was heavily oversubscribed, around €21 billion in demand. We closed with an interest rate that was just 10 basis points over the US Treasury. So that you know shows the the important financing capacity of the bank and this is what allows us to be very competitive in financing our clients, public and private clients and contributing to growth and prosperity in Europe and and beyond. So we really need to to calibrate our response as well. So far the market is responding as we had anticipated and think we certainly will step up our support to Europe’s security and defence. Just a final comment if we can. You, of course, were part of the Spanish government for little while. I’m used to calling you Minister. I want to get your thoughts on whether defence spending will overwhelm the capital that could be used for developing the European economy more broadly. You concerned about that in any way, shape or form? Certainly. That’s why I said a moment ago we need to mobilise all our funding sources as to make sure that funding our security and defence effort, contributing to peace at the end of the day, is not weakening our support to social infrastructures, innovation, the digitalization, of course, climate action, which is a top priority and the key challenge of our time.