EU Finance Ministers to Discuss Reparations Loan for Ukraine and the Impact of Sanctions on the Russian Economy
At the upcoming meeting in Luxembourg on October 10, the finance ministers of European Union countries will consider the issue of providing a reparations loan to Ukraine. The basis for this financial assistance could be the frozen Russian assets located within the EU.
This is reported by AgroReview
Discussion of Guarantees for Belgium
It is expected that during breakfast at 10:00 local time, the European Commission will present updated proposals regarding the reparations loan for Ukraine. One of the key issues will be securing guarantees for Belgium, where a significant portion of the frozen Russian assets is held. Among the options being considered are both bilateral guarantees and the possibility of including them in the next EU budget period, which would require the approval of all 27 member states.
Diplomats have indicated that for many countries, obtaining approval from national parliaments for such guarantees is crucial. This is particularly relevant for Belgium, as the volume of Russian assets on its territory amounts to about one-third of its gross domestic product.
Prospects for Approving the Reparations Loan
After discussions at the level of finance ministers, the issue of the reparations loan will be brought to the attention of EU leaders during the summit in Brussels at the end of October. Only after receiving political agreement will substantive negotiations begin.
It is anticipated that the European Commission will prepare a formal proposal, and member states will initiate the internal procedures necessary to provide guarantees. Diplomats believe that a decision on the multi-billion euro loan for Ukraine will only be possible with consolidated support from EU leaders.
“The amount of cash accumulated through bonds of the Russian Central Bank in the Belgian central depository Euroclear is approximately 176 billion euros. These funds are not being returned to Russia due to the sanctions imposed by the European Union in response to its full-scale invasion of Ukraine. The idea of providing a reparations loan to Ukraine is to transfer this cash to the EU, which will ‘enter into an individual debt contract with Euroclear at 0% interest.'”
Additionally, during the meeting, finance ministers will discuss the impact of EU sanctions on the economy of the Russian Federation. According to diplomats, recent data indicates the effectiveness of the restrictions: the economic situation in Russia is deteriorating, and the inflation rate is twice the officially reported figures.