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Lithuania calls for more money for Ukraine in EU budget review

By Jan Strupczewski

SANTIAGO DE COMPOSTELA, Spain (Reuters) - The European Union should earmark more cash to support Ukraine in its revised long-term budget and top up the funds for EU military mobility, Lithuanian finance minister Gintare Skaiste said on Saturday.

As part of a review of the EU's 2021-2027 budget, the European Commission in June proposed 50 billion euros in grants and loans for Ukraine to keep Kyiv financed as it fights off Russian aggression.

This year, the EU will pay out 18 billion euros to Ukraine in highly concessional loans, but, if the proposed 50 billion total stays, Ukraine will only get 12.5 billion annually from 2024 to 2027.

"If you divide the amount of euros that is in the proposal over four years, the sum will be lower than this year. So our proposal is that maybe we can have the same level as it was in 2023," Skaiste told Reuters. "If we have the same level as it was in 2023, it would be 72 billion."

She said the EU budget review should also add money for military mobility -- roads, ports, bridges and airports that allow armed forces to move around quickly -- as the 1.7 billion euros originally allocated for the purpose was insufficient.

"We see the need for military mobility infrastructure increasing. It exceeds one billion euros just for Lithuania," she said.

EU governments aim to reach a deal on the revised 2021-2027 budget by the end of 2023, but talks are difficult because the Commission also asked for 15 additional billion euros to deal with migration issues and further money to cover increased borrowing costs for joint EU debt as interest rates rise.

To cover some of the expenses, the EU executive wants governments to assign to the EU new dedicated revenue streams from CO2 emissions trading and 0.5% of the notional EU company profit base, as calculated by Eurostat.

Skaiste said Lithuania backed neither because revenue from emissions trading was already used by the government to invest in transforming the economy away from fossil fuels and the money from companies was already going to the EU budget through the national contribution based on gross national income.

(Reporting by Jan Strupczewski; editing by Jason Neely)