EU countries could use €225 billion in EU loans for energy crisis

European Union countries could use 225 billion euros ($227.57 billion) of unused credit from the EU's bailout fund to address energy problems and other challenges stemming from Russia's war in Ukraine, a senior EU official said on Monday.

The European Union launched an unprecedented €800 billion joint borrowing program last year to help its 27 members recover from the COVID-19 pandemic and make their economies greener. But instead of the pandemic, governments are now grappling with a cost-of-living crisis caused by soaring energy prices after Russia halted most of its gas supplies to the EU in retaliation for its support for Ukraine. "Member States can request loans to finance additional investment and reforms, including those that have already adopted plans," European Commission Vice-President Valdis Dombrovskis told the European Parliament's economic committee. Dombrovskis added that these loans could be used to respond to Russian aggression and finance reforms under REPowerEU, the plan to reduce dependence on Russian oil. Dombrovskis said governments could also change already approved spending plans as the war in Ukraine has changed the conditions under which initial plans were made. Russia characterizes its actions in Ukraine as a "special military operation". Dombrovskis said EU governments could ask for changes to plans if they are unable to realize planned investments due to extreme market fluctuations or lack of supplies. They can also make changes because the amounts each country will receive are slightly adjusted following the publication of 2021 data on gross domestic product growth. "Proposed revisions should be targeted and well justified. They should not undermine the ongoing implementation and overall objective of the plan," he said. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!