Western countries should give grants to rebuild Ukraine - EIB VP

Wealthier Western nations should step in with grants to support Ukraine's post-war rebuild because loans from global multilateral banks will not be sufficient to cover the cost, the vice president of the European Investment Bank (EIB) said on Tuesday. Speaking to Reuters on the sidelines of the U.N. Ocean Conference in Lisbon, Ricardo Mourinho Felix said money would be needed to rebuild not only damaged infrastructure but the entire country.

Wealthier Western nations should step in with grants to support Ukraine's post-war rebuild because loans from global multilateral banks will not be sufficient to cover the cost, the vice president of the European Investment Bank (EIB) said on Tuesday.

Speaking to Reuters on the sidelines of the U.N. Ocean Conference in Lisbon, Ricardo Mourinho Felix said money would be needed to rebuild not only damaged infrastructure but the entire country. "This implies an important component of 'grants' that allow support for the country's reconstruction," he said, adding Europe should play a "key role".

"But other developed countries - the liberal western democracies - can and should also contribute to this reconstruction," said the VP of the European Union's main lending arm and one of the world's biggest multilateral banks. "This should imply a 'trust' fund, with country donors whose grants would be leverage with funding from multilateral banks and international financial institutions to rebuild the country as quickly as possible," he added.

He said "at this moment any estimate (of the cost) is fallible because the war is ongoing, the dimension of the devastation is not yet known". "But surely, given the destruction that already exists, we could be talking about trillions," he said about the Marshall-like plan, which the EIB is available to fund.

Under the post-World War Two U.S. scheme known as the Marshall Plan, the United States granted Europe the present-day equivalent of some $200 billion over four years in economic and technical assistance. Ukraine's Finance Minister Serhiy Marchenko said in May that the economy was expected to contract by 45% this year due to the Russian invasion, which has destroyed cities and infrastructure and displaced 11 million people so far.

Mourinho Felix said that "public guarantees" would also be a "very powerful" instrument as they would support investments and facilitate credit to flow back to the private sector.

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