NICOSIA, Cyprus — Europe should fund Ukraine’s reconstruction by taxing Russian imports, Estonian Prime Minister Kristen Michal said.
The bill to repair Ukraine’s devastated infrastructure and bombed-out cities runs into the hundreds of billions of euros, Michal told POLITICO on the sidelines of a two-day EU leaders’ summit in Cyprus that was being held to discuss geopolitics, security and the bloc’s budget.
Europe has imposed sanctions, banned many Russian imports and imposed tariffs on grain and fertilizers. But it has not raised duties on permitted goods with the express goal of aiding Ukraine, and the idea of using trade policy for security purposes remains controversial in the bloc.
“We need to tariff the goods from Russia to pay off the damages,” he said. “This has been the talk in different kinds of corridors [and] different meetings, that different kinds of tariffs on Russian goods could fund the reconstruction of Ukraine.”
Seven countries, including Estonia, called for tariffs on Russian products such as steel and fertilizer last November, but the push has stalled and was not part of a 20th sanctions package agreed by the EU this week.
Michal argued that even the €210 billion in Moscow’s frozen assets, held in a Brussels-based financial depository, would not be enough to cover the gigantic bill.
The full financial cost of Russia’s four-year-old invasion of Ukraine, which has killed or wounded hundreds of thousands of Ukrainians, displaced millions more and razed cities to the ground, is difficult to calculate.
But a study commissioned by the Ukrainian government, the United Nations, European Commission, and World Bank, published in February last year, found it would cost €500 billion over a decade to rebuild Ukraine. The study also found that 13 percent of Ukraine’s housing stock had been destroyed in the first three years of the conflict.
“They should be held responsible,” Michal said, referring to Moscow. “Because if they are not held responsible, then this will repeat. We [Estonia] have a longer history with Russia. We know what Russia is. We gained our independence not so long [ago].”
Ukraine’s economy has been drained by Russia’s war and the enormous costs of repelling the invasion, with the EU this week approving a €90 billion loan to keep Kyiv afloat.
Michal reiterated his call for Europe to update its visa regulations to ban Russian fighters from entering the bloc, arguing that once the war in Ukraine ends, they would flood into Europe and cause havoc. He was one of eight leaders who authored a letter to European Council President António Costa and European Commission President Ursula von der Leyen last month urging tighter visa rules, along with Germany’s Friedrich Merz and Poland’s Donald Tusk.
“They are criminals, they will be looking for a job in private armies, in different places,” he said. “So this is a question about our domestic security … If you are involved in this kind of aggression against Ukraine, then please stay in Russia.”
Michal said Tallinn hoped the European Commission would lead the massive logistical effort of blacklisting upwards of a million Russians. “I know that [EU’s High Representative and former Estonian prime minister] Kaja Kallas is already dealing with it,” he said.
“We are also pushing them … I hope that before the summer, we will have already certain [European Council] agenda points on it.”
Koen Verhelst contributed reporting from Brussels.
