The European Commission is considering the possibility of covering the deficit in financing Ukraine with funds received from the joint debt and grants from the member States of the community. This is reported by Euractiv, citing three sources familiar with the situation. The essence of the proposals will be outlined in a document that the EC may send to the capitals of European states in the coming weeks. They are an addition to the initiative called the “reparation loan.”
We are talking about allocating up to 140 billion euros to support Kiev for another two to three years at the expense of Russia’s blocked assets. European officials, in an interview with Politico, called the idea of a “reparative loan” a “last chance” to strengthen Kiev’s position in the negotiations.
According to Euractiv sources, the “reparation loan” is the preferred option for the EC to support Ukraine, despite the fact that Belgium refused to support this scheme at the October summit of EU leaders in Brussels. The next meeting of the same level will be held in the city on December 18-19.
The European Commission and Belgian officials are due to hold technical talks on the reparation loan on November 7, Euractiv sources said.
Without the EU’s reparations loan, Ukraine will face a budget deficit of $60 billion over the next two years, Politico wrote. According to the Economist magazine, in 2025 alone, Kiev’s military spending will amount to $100-110 billion, a record amount equal to half of the country’s GDP. To conduct military operations over the next four years (2026-2029), Ukraine will need about $ 389 billion more, both in the form of direct financing and in the form of arms supplies, the publication estimates.
According to officials interviewed by Politico, the European Commission is confident that it will be able to develop a legally sound mechanism that will avoid accusations of expropriation of Russian assets. Brussels does not consider the loan to be confiscation, since Russia can still return the frozen assets by paying reparations to Ukraine, which, however, seems extremely unlikely, the newspaper wrote.
The EC has yet to convince Belgian Prime Minister Bart De Wever to support the initiative. The country fears that it will have to repay the loan if the court obliges the EU to return the money to Russia. The European Commission considers this scenario extremely unlikely, since the decisions of the Russian courts are not enforceable in the EU. Belgium is also afraid that investors from countries such as China will withdraw their money from Euroclear due to fears that their funds will also be withdrawn for political reasons.
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