EU 'Reparations Loan' For Ukraine Could Reach EUR 130B Reuters

(MENAFN- UkrinForm) That is according to Reuters , Ukrinform reports.

The idea of a reparations loan to Kyiv, based on cash balances of Russian assets immobilized in the West after Moscow invaded Ukraine in 2022, was floated by European Commission President Ursula von der Leyen on September 10.

The loan, aimed at helping Kyiv fund its war effort, would be repaid by Ukraine only once it receives reparations from Russia in a peace accord. The risk would be carried collectively by European and possibly also some other G7 countries, she said.

Read also: G7 wants to take decisive action to end the war in Ukraine – Canadian Finance Minister

Most of the Russian assets held in Europe - estimated at around EUR 210 billion - are kept at the Belgian central securities depository Euroclear. Officials said that EUR 175 billion of Euroclear's assets have already matured and turned into cash, which could serve as the basis for the new loan.

At the same time, officials said that before the EU would move ahead with the reparations loan, it would want to repay the EUR 45 billion ($50 billion) G7 loan agreed last year. That would leave some EUR 130 billion from the cash balance available for the new instrument, three officials close to the discussions said.

As reported, EU Commissioner for Economy and Productivity Valdis Dombrovskis said that the European Commission is currently working out the modalities, timeline, and necessary volume of the "reparations loan" recently announced by von der Leyen.

Ukraine's Finance Minister Sergii Marchenko welcomed the European initiative for a reparations loan backed by frozen Russian assets. In his opinion, such mechanisms make it possible to use Russian funds without formal confiscation.

Illustrative photo: Unsplash

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