Brussels (ANSA) – The European Union is exploring two methods to finance Ukraine. The first method involves utilizing Russian assets, with frozen funds in Europe being used to issue eurobonds to support Ukraine. This approach, referred to as the ‘Reparation loan,’ would be repaid once the conflict concludes, contingent on receiving ‘war reparations’ from Russia.
The second method appears to be simpler: providing loans to Ukraine financed through the EU’s multiannual budget. Interestingly, the more complex method could be considered a solution, as it requires robust guarantees but does not introduce new debt and can be approved by a qualified majority, avoiding expected vetoes from Belgium and Hungary.
In contrast, loans sourced from the Financial Framework margins, similar to the Sure loan used during the Covid pandemic, necessitate unanimous approval. A third option, involving the European Central Bank acting as a ‘lender of last resort,’ has been dismissed from the outset due to legal restrictions that prevent the central bank from directly financing member states or EU budget operations.
Regarding financial figures: Brussels aims to cover two-thirds of Ukraine’s needs, projected by the International Monetary Fund at 135 billion for 2026-2027, and is prepared to allocate 90 billion for essential services and military capabilities. However, the Reparation loan mechanism could potentially be valued at up to 210 billion.
After deducting the 45 billion in Era loans already allocated during Italy’s G7 presidency, the remaining amount stands at 165 billion. This proposal highlights not only the use of cash from Russian assets held at the Belgian securities depository Euroclear but also an additional 25 billion from European commercial banks with Russian assets frozen due to EU sanctions (as of December 3).
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