(MENAFN- UkrinForm) That's according to a report by Politico, as cited by an Ukrinform correspondent.

European supporters of the €140 billion“reparations loan,” backed by frozen Russian state assets in the EU, say continued IMF assistance to Ukraine remains critically important, fearing that time is running out to persuade the Fund to approve new financing for Kyiv.

The IMF is considering a $8 billion loan to Ukraine over the next three years, as the country needs funding to continue resisting Russia's full-scale invasion. However, hopes for IMF financial backing depend on whether the EU can finalize its own €140 billion loan to Ukraine using frozen Russian state assets - most of which are held in Belgium.

An unnamed European Commission official and diplomats from three EU member states told Politico that reaching an agreement on the reparations loan would convince the IMF of Ukraine's financial sustainability for the coming years - a key requirement for funding any country.

But last month, Belgium opposed the reparations loan, citing potential financial and legal risks, dimming hopes for the deal's completion ahead of a crucial IMF board meeting expected in December.

“We are facing a timeline issue,” said an EU official, noting that the next EU leaders' summit is scheduled only for December 18–19, highlighting the need for faster decisions.

With the United States significantly reducing its support for Ukraine, the IMF expects the EU to shoulder the bulk of Ukraine's financial needs in the coming years.

Although the IMF program for Ukraine is relatively modest in size, its approval signals to investors that the country remains financially viable and committed to reforms.

“It's a benchmark for other countries and institutions to evaluate whether Ukraine is doing proper governance,” said a Ukrainian official.

The report notes that IMF experts will visit Kyiv this month to discuss the three-year program.

“[The IMF's support] is something that we should not play with,” the EU official added.

During their last summit, EU leaders stripped a reference to the €140 billion Ukraine loan from the official Council conclusions as a concession to Belgium.

The watered-down text merely“invites the Commission to present, as soon as possible, options for financial support based on an assessment of Ukraine's financing needs.”

Crucially, the document specifies no concrete actions to achieve these goals, Politico notes.

One EU official and two EU diplomats said such vague, open-ended wording is unlikely to satisfy the IMF's concerns on Ukraine's finances.

Read also: EU considers Plan B after Belgium blocks reparations loan to Ukraine – Politico

According to Politico's sources, stronger measures could include issuing a legal proposal for the €140 billion loan, adopting stronger conclusions during a meeting of finance ministers or calling an extraordinary leaders' summit.

To strengthen Ukraine's economic outlook, the EU is also assuring the IMF that Kyiv will not be required to repay the €140 billion loan in the coming years.

Brussels insists the loan would only be repaid to Moscow once the Kremlin ends its war against Ukraine and pays reparations to Kyiv - a scenario considered highly unlikely.

“There is no universe in which Ukraine needs to come up with the money itself,” said another EU official.“It either gets the money from Russia or doesn't give it back. As far as Ukraine is concerned, it's a good as a grant.”

As reported, European Commission President Ursula von der Leyen said several options are being developed for using frozen Russian assets in compliance with international law, which remain the main expected source for covering Ukraine's financial needs.

President Volodymyr Zelensky stated that Ukraine will require funds from the reparations loan as early as 2026.

Photo: eumetsat

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