On October 10, a meeting of the finance ministers of the European Union will take place in Luxembourg, where a key topic will be the discussion of the possibility of providing Ukraine with a reparations loan. The basis for this loan could be the frozen assets of the Russian Federation, which are currently held in EU countries, particularly in Belgium.
This is reported by Kyiv24
Discussion of Guarantees for Belgium and Procedural Issues
The discussion regarding the provision of a reparations loan to Ukraine will occur during a breakfast meeting scheduled for 10:00 local time. The European Commission is expected to present new proposals regarding the loan mechanism and respond to numerous questions from EU member states.
One of the central issues is the provision of guarantees for Belgium, where a significant portion of the Russian frozen assets is held. Among the options being considered are bilateral guarantees or their inclusion in the next EU budget cycle. However, the latter option requires unanimous support from all 27 member states.
Further agreement on the multi-billion loan for Ukraine will depend on the political consensus of EU leaders, which is planned to be achieved during the summit in Brussels at the end of October. If a positive decision is made, negotiations on the details of the lending mechanism will begin. After the formal proposal is submitted by the European Commission, member states will need to undergo national procedures to provide guarantees, most of which require parliamentary approval.
“The amount of Russian frozen assets held in Belgium is equivalent to one-third of its GDP.”
Impact of EU Sanctions on the Russian Economy
In addition to the loan issue, EU finance ministers will hear a report from the European Commission on the impact of sanctions on the Russian economy. According to diplomats, recent data indicates that the economic situation in Russia continues to deteriorate. Inflation in the country is twice the officially reported figures.
As of now, the amount of cash that has been accumulated through Russian Central Bank bonds in the Belgian central depository Euroclear is approximately 176 billion euros. These assets remain frozen due to the sanctions imposed by the EU in response to Russia’s full-scale invasion of Ukraine.
The concept of the reparations loan for Ukraine involves transferring this amount to the EU, which would enter into an individual debt contract with Euroclear at 0% interest, representing an important step in supporting the Ukrainian economy during the war.