The EU is assessing Ukraine's financial needs ahead of a decision on Russia's frozen assets
The European Commission is assessing Ukraine’s budget deficit amid renewed discussions about the possible use of frozen Russian assets. Most of Russia’s funds are held in European financial institutions, including the Belgian firm Euroclear.
Last year, EU leaders approved a 90 billion euro loan for Ukraine. This decision was made after a plan to finance Kyiv directly using Russia’s frozen assets failed to receive unanimous support from member states.
Currently, the European Commission is focused specifically on preparing this loan. Commission spokesperson Paula Pinho stated that the issue of frozen Russian assets is not yet a top priority.
At the same time, in August, Ukraine reported a $27 billion funding shortfall needed to continue its fight against Russia. This week, European Commissioner for the Economy Valdis Dombrovskis held meetings with Ukrainian Prime Minister Serhiy Koretskyi and IMF Managing Director Kristalina Georgieva. The parties discussed Ukraine’s financial situation and budgetary needs.
The European Commission noted that further expert assessments are needed following these consultations. According to Commission spokesperson Balázs Ujvári, Ukraine’s financial needs must first be clearly defined before discussing possible mechanisms to cover them.
Against this backdrop, the debate over Russian assets has intensified once more. More than 120 Members of the European Parliament supported a proposal by the Renew Group, which calls for transferring frozen funds to the management of a new EU instrument. This instrument would act as their custodian instead of Euroclear and other institutions.
The authors of the proposal believe that such a mechanism would help alleviate Belgium’s concerns regarding the potential financial and political consequences of using Russian assets. The European Commission has stated that it is currently reviewing this initiative.
Source: The Guardian
As a reminder, Belgium has categorically refused to transfer Russia’s frozen assets to Ukraine.
Ukrainian Foreign Minister Andriy Sibiga expressed his gratitude to the foreign ministers of Sweden, Poland, the Netherlands, and Spain for their joint initiative. This refers to a letter to the European Commission calling for the use of frozen Russian assets to benefit Ukraine.
