EU's Bold Move: Reparations Loan for Ukraine

The European Union is considering a reparations loan of up to 130 billion euros for Ukraine, based on immobilized Russian assets. The loan details will be finalized after the IMF's assessment of Ukraine's needs. This initiative is spearheaded by the European Commission to support Ukraine amidst its conflict with Russia.

Brussels is mulling a substantial financial package for Ukraine, potentially reaching 130 billion euros, sources close to the discussions revealed. This reparations loan hinges on idle Russian assets frozen in Europe following Russia's invasion of Ukraine and awaits further assessment by the International Monetary Fund.

The concept, suggested by European Commission President Ursula von der Leyen, proposes Kyiv's funding through such a loan, which Ukraine will only repay after receiving reparations from Russia. The financial risk, according to von der Leyen, would be collectively borne by the EU and potentially some G7 nations.

With most Russian assets locked in Belgium's Euroclear, 175 billion euros have been converted to cash, making way for the financial instrument. Discussions continue on structuring the loan without confiscating the Russian assets, respecting the legal framework and EU member states' concerns. The project might involve a Special Purpose Vehicle to manage the funds.

(With inputs from agencies.)