Finance ministers from European Union countries will hold a meeting in Luxembourg on October 10, during which they will consider the European Commission’s initiative to provide Ukraine with a reparations loan. This proposal is based on the use of frozen assets of the Russian Federation.
This is reported by Finway
Details of the Proposal and Belgium’s Position
During a breakfast scheduled for 10:00 local time, the European Commission will present new developments regarding the possibility of providing Ukraine with a loan based on frozen Russian funds. It is expected that representatives of member countries will raise numerous questions regarding the details of this initiative.
Particular attention will be paid to guarantees for Belgium, where a significant portion of Russian assets is held. The option of bilateral guarantees for the Belgian side is being considered, as well as the possibility of including relevant mechanisms in the next EU budget cycle. However, unanimous support from all 27 EU members is required for such a decision.
The issue will then be brought to the attention of EU leaders during a summit in Brussels at the end of October. According to diplomats, political agreement is expected to be reached, after which substantive negotiations will begin.
National Procedures and the Impact of Sanctions
After the formal proposal is submitted by the European Commission, each member country will have to undergo its own national procedures to provide the guarantees required by Belgium. In many countries, parliamentary approval will be necessary, given that the volume of frozen Russian assets in Belgium amounts to approximately one-third of its GDP.
“The idea of providing Ukraine with a reparations loan is to transfer this cash to the EU, which will ‘enter into an individual debt contract with Euroclear at 0% interest.'”
During the meeting on October 10, finance ministers will also discuss the economic situation in Russia under the influence of European sanctions. According to diplomats, the EU’s restrictive measures are having a significant effect: Russia’s economic indicators are deteriorating, and inflation is twice the officially stated levels.
Currently, approximately 176 billion euros, obtained from bonds of the Russian Central Bank, are held in the Belgian central depository Euroclear. These funds remain blocked under the EU sanctions imposed due to Russia’s full-scale invasion of Ukraine. If the reparations loan idea is approved, these funds could become the source of financing for a new loan to Ukraine.