Politico: European Commission pressures EU countries to use Russian assets for “reparations loan” to Ukraine

The European Commission is pressuring EU countries to use frozen Russian assets for a €140 billion "reparations loan" for Ukraine.

This is reported by Politico, citing anonymous sources.

The European Commission is increasing pressure on states that have still not been able to reach an agreement on financing aid to Ukraine, the publication writes.

If the partners do not agree, they will have to find money on their own or agree to the option of using Eurobonds — debt securities that a country or company takes out to borrow money on the international market.

As Politico sources note, the European Commission is deliberately pressuring its partners with joint debt obligations. For economically minded countries such as Germany and the Netherlands, the prospect of new debts is unacceptable. At the same time, France and Italy, having their own financial problems, will not be able to afford additional borrowing.

If the plan is approved, for the first time in history, the European Union will use frozen state assets of another country to help a victim of aggression, Politico analysts believe.

What is a "reparation loan"?

The possibility of providing Ukraine with a €140 billion loan using frozen Russian assets has been discussed since early October. At that time, EU leaders were unable to agree on the loan — Belgium opposed it, and France and Luxembourg were concerned about the legal consequences.

The European Commission has proposed providing Ukraine with a loan using Russian state assets held in Euroclear, a Belgian financial institution. Under the plan, if Russia refuses to pay reparations to Ukraine after the war, it will lose rights to these assets.

Belgium opposed the plan out of concern that Russia would sue it if it went ahead. Belgian Prime Minister Bart De Wever asked the other 26 EU countries to guarantee coverage of legal and financial risks.

Politico reported on October 21 that EU ambassadors had tentatively agreed on a plan to provide a “reparations loan” for Ukraine. However, at a meeting on October 23, EU leaders did not agree to allocate the loan and postponed the issue until December.

Meanwhile, according to Bloomberg, Russia has prepared a response to the Westʼs possible "reparations loan" to Ukraine — it will nationalize foreign assets.

Author: Anastasia Zaikova

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