The European Union is preparing an alternative plan to provide Ukraine with a loan using the proceeds from frozen Russian assets, the Financial Times reports, citing three officials. It involves allocating between €20 billion and €40 billion to kyiv, regardless of US involvement; the final amount will be set by the European Commission after consultations with the bloc’s countries.
According to the paper, EU leaders are concerned that Hungary could prevent the bloc from providing the guarantees Washington is demanding from Brussels. That is why the authorities are working on a new plan that would require the support of a majority of countries rather than unanimous approval, which would strip Budapest of its veto power.
“There is an urgent need to accept the proposals before the end of October so that the EU loan can be released before the end of 2024 for future instalment payments.” – says the phrase.
He notes that Brussels could attract several billion euros in loans. Such a plan would be seen as an extension of the current EU financial support package, which expires at the end of the year. Work needs to start in the coming weeks to remove legal obstacles.
“We can always act independently” said the anonymous European official.
The Financial Times notes that the EU’s “Plan A” is still considered the plan approved in June, when the G7 countries agreed to provide Ukraine with a $50 billion loan. The loan is supposed to be repaid from future profits on Russian assets worth about $280 billion (€260 billion) that were frozen in the West as part of sanctions over military actions in Ukraine. Most of the funds are held by Euroclear, the European Central Depository in Belgium. The EU and the US will each contribute $20 billion, with the remaining $10 billion coming from the UK, Japan and Canada.
Washington is demanding that Brussels provide guarantees that Russian assets frozen in the EU will remain untouched to “ensure a stable flow of income to repay the loan.” The European Commission has proposed extending the period of sanctions on Russian assets from six months to 36 (currently the restrictions are extended every six months). Other proposed options include extending the sanctions for five years.
However, the idea is blocked by the Hungarian Prime Minister. Victor Orbanwhich has in the past vetoed decisions on EU support for Ukraine, sources told the Financial Times. According to the paper, a Hungarian government spokesman told EU ambassadors that the issue should be put aside and addressed after the US elections in November.
Russian authorities call the transfer of asset proceeds to help Ukraine theft.
“These are illegal actions. They will definitely have legal consequences.” – promised the President’s press secretary Dmitry Peskov.
The Russian Foreign Ministry also threatened the “collective West” with serious consequences, RBC explains.
