The European Union may be forced to provide temporary financing for Ukraine if member states do not soon reach an agreement on a loan plan secured by frozen Russian assets. This was stated by European Commissioner for Economy Valdis Dombrovskis during a conference in Sofia dedicated to Bulgaria's preparation for adopting the euro, Politico reports, quoted by Focus.
„The longer we delay, the harder it will become. "If there is no solution to the reparations loan, we will have to look for a temporary mechanism to support Ukraine at the beginning of next year," Dombrovskis said.
The European Commission's proposal envisages that profits from frozen Russian assets held by the Belgian financial institution Euroclear be used as the basis for a loan of about $60 billion to cover Kiev's budget deficit. However, the idea is being opposed by Belgium, which fears legal risks and possible lawsuits from Russia.
Dombrovskis assured that the EC's legal service had analyzed the risk of such cases and assessed it as "limited". He stressed that the EU was ready to provide guarantees to Belgium in case of financial damage. As an alternative, the commissioner mentioned the possibility of providing grants, but specified that this would be even more difficult for member states to accept.
On Friday, representatives of the Belgian government and the European Commission will meet to discuss the blocked mechanism. If Belgium withdraws its objections, the EC will start working on the legislative framework, possibly with the participation of the European Parliament - a process that could extend the timeline and question the possibility of securing the funding by April, when Ukraine could face a shortage of funds.
According to Politico, quoted by TASS, the involvement of the European Parliament in the development of the legal mechanism for using frozen Russian assets would also lead to delays. Sources say the issue is already being discussed at the highest level, including between Belgian Prime Minister Bart De Wever and the European Commission leadership.
Adding further complication is that Ukraine's financing from the International Monetary Fund is tied to European aid. Meanwhile, the Russian ambassador to Belgium, Denis Gonchar, warned that any seizure of frozen assets would be viewed by Moscow as “theft“ and would result in “an immediate response“.