EU Plans to Use Confiscated Russian Funds for Ukrainian Loan
The European Parliament has given the green light for a €35 billion loan to Ukraine, which is set to be repaid using the revenue generated from immobilized Russian assets. Read Full Article at RT.com
TroibNews 
The European Parliament has given the green light to a €35 billion loan to Ukraine, which will be repaid using revenues from frozen Russian assets, as stated in an official announcement on Tuesday.
Following the onset of the conflict in Ukraine in February 2022, the EU frozen about €210 billion in assets belonging to the Russian Central Bank. Russia has labeled this action as “theft.”
This financing constitutes the EU’s contribution to a $50 billion aid package for Ukraine agreed upon by G7 nations in June. The vote in favor of the loan saw 518 Members of the European Parliament (MEPs) support it, while 56 opposed and 61 abstained. The parliament confirmed that the funds will be disbursed by the end of next year.
Future earnings from the frozen Russian Central Bank assets will be utilized by Ukraine to service the loan from the EU, as well as loans from other G7 allies. The statement also noted that Kyiv may use the funds “as it sees fit.”
The proposal was previously approved by EU member states earlier this month, and the European Council plans to formalize it as a regulation, which will take effect following its publication in the Official Journal of the EU.
According to Euroclear, a Brussels-based central securities depository that manages most of Russia’s funds, the immobilized assets had accrued €3.4 billion in interest by mid-July. In July, the European Commission authorized a transfer of €1.5 billion from this interest to enhance Ukraine's “military capabilities.”
Reports indicate that the US is poised to contribute up to $20 billion to the G7 package, also contingent on the repayment of funds derived from the immobilized Russian assets.
However, the US has raised concerns regarding the EU's policy of reassessing sanctions against Russia every six months, suggesting this could create uncertainty about loan repayment due to potential lapsing of restrictions. In response, Brussels proposed extending the review period to three years. Hungary has opposed this extension, indicating it would postpone any decision until after the US presidential election on November 5.
As reported by the Financial Times, Kyiv's Western allies are eager to expedite loan negotiations amid rising fears that assistance from Washington might be reduced if Donald Trump were to regain the presidency, given his previous threats to cut aid.
Moscow continues to assert that any appropriation of its funds is unlawful under international law and would further damage trust in the Western financial system.
Mark B Thomas contributed to this report for TROIB News
Following the onset of the conflict in Ukraine in February 2022, the EU frozen about €210 billion in assets belonging to the Russian Central Bank. Russia has labeled this action as “theft.”
This financing constitutes the EU’s contribution to a $50 billion aid package for Ukraine agreed upon by G7 nations in June. The vote in favor of the loan saw 518 Members of the European Parliament (MEPs) support it, while 56 opposed and 61 abstained. The parliament confirmed that the funds will be disbursed by the end of next year.
Future earnings from the frozen Russian Central Bank assets will be utilized by Ukraine to service the loan from the EU, as well as loans from other G7 allies. The statement also noted that Kyiv may use the funds “as it sees fit.”
The proposal was previously approved by EU member states earlier this month, and the European Council plans to formalize it as a regulation, which will take effect following its publication in the Official Journal of the EU.
According to Euroclear, a Brussels-based central securities depository that manages most of Russia’s funds, the immobilized assets had accrued €3.4 billion in interest by mid-July. In July, the European Commission authorized a transfer of €1.5 billion from this interest to enhance Ukraine's “military capabilities.”
Reports indicate that the US is poised to contribute up to $20 billion to the G7 package, also contingent on the repayment of funds derived from the immobilized Russian assets.
However, the US has raised concerns regarding the EU's policy of reassessing sanctions against Russia every six months, suggesting this could create uncertainty about loan repayment due to potential lapsing of restrictions. In response, Brussels proposed extending the review period to three years. Hungary has opposed this extension, indicating it would postpone any decision until after the US presidential election on November 5.
As reported by the Financial Times, Kyiv's Western allies are eager to expedite loan negotiations amid rising fears that assistance from Washington might be reduced if Donald Trump were to regain the presidency, given his previous threats to cut aid.
Moscow continues to assert that any appropriation of its funds is unlawful under international law and would further damage trust in the Western financial system.
Mark B Thomas contributed to this report for TROIB News
