EU agrees on global tax rate, sanctions and $19bn Ukraine assistance package

The move follows an impassioned plea from Ukrainian President Volodymyr Zelenskyy

European Commission President Ursula von der Leyen after the EU leaders' summit in Brussels, Belgium, on Thursday. Reuters
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The EU approved a €18 billion ($19 billion) aid package for Ukraine on Thursday and agreed on a minimum corporate tax after last-minute Polish objections held up a deal, diplomats said.

The announcement came after an impassioned plea from Ukrainian President Volodymyr Zelenskyy not to let internal disputes within the 27-nation bloc stand in the way of backing Kyiv.

"I am asking you very much to ensure that our struggle for peace for Ukraine and for the whole of Europe does not depend on misunderstandings and controversies between some EU member states," Mr Zelenskyy said in a video address to EU leaders meeting in Brussels.

The member states struck a complex agreement on Monday that gave approval to the Ukraine aid and a minimum 15 per cent global corporate tax rate.

The "megadeal", which included a compromise with Hungary over frozen EU funds, was formally expected to be approved on Wednesday evening.

But repeated deadlines to ratify the package slipped by after Warsaw raised objections to the tax push.

The delay meant the dispute spilled over into the EU leaders summit.

Diplomats said an accord was eventually reached after Poland agreed to let the initiatives go through.

French President Emmanuel Macro hailed a "major breakthrough". "We are very keen on upholding social justice and the ability to tax all economic actors at a minimum level of 15 per cent," he told reporters at the exit of the summit.

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Warsaw, one of the most hawkish supporters of Ukraine in the EU, had insisted it was firmly in favour of the 2023 financial aid for Kyiv.

But Prime Minister Mateusz Morawiecki said it was "blackmail" for other countries to maintain the money for Ukraine could only be agreed to if the corporate tax deal went through.

Poland is trying to persuade the EU that it has made enough progress on reforms to justify it starting to receive $35 billion in post-Covid recovery funds.

The desperately needed funds will help to prop up the Ukrainian government next year as its struggles to keep services going during Russia's war.

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In another disagreement, Poland and Lithuania were objecting to a new package of sanctions against Russia over the war in Ukraine, saying other EU nations had tried to dilute it too much.

Eastern European officials said attempts by coastal states including Belgium and the Netherlands to retreat on restrictions on Russia selling fertiliser would weaken EU attempts to punish the Kremlin.

EU sanctions do not target Russian fertiliser and grain, but they reportedly discourage shipping companies from transporting all Russian cargo.

UN Secretary General Antonio Guterres had asked European leaders to ease up up on fertilisers to not endanger food security in Africa, whic imported 44 per cent of their wheat from Russia and Ukraine between 2018 and 2020, according to UN figures.

Mr Macron said that they had responded to Mr Guterres' request and that the sanctions "impacted [Russia's] ability to finance its war effort and at the same time do not damage food security for many developing and emerging countries."

Mr Macron also said that he would speak to Russian President Vladimir Putin soon and that discussions would focus on calling on Russia to stop targetting Ukrainian civilian targets with bombardments and drone attacks.

The French President also wants to convince Russia to withdraw weaponry and infantry from Ukrain's Zaporizhia nuclear power plant. "We are quite close to obtaining this," he said.

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Updated: December 16, 2022, 10:50 AM