EU Commission to present draft legal proposal on Ukraine financing this week
The Commission is expected to present a draft legal proposal for a reparations loan to Ukraine later this week, Reuters reports on Wednesday. European Commission president Ursula von der Leyen insisted that the financial burden of supporting Ukraine will not fall solely on European taxpayers.
The Commission recently outlined three possible models for continued financial support to Ukraine. While national contributions and a joint European loan remain on the table, von der Leyen continues to favour using frozen Russian assets held at Euroclear in Brussels. Belgium views this option with caution due to financial and legal risks.
In any case, the burden of financing Ukraine will not fall on EU citizens alone, von der Leyen reiterated on Wednesday. "The next step now is that the Commission is ready to present a legal text and, to be very clear, I cannot see any scenario in which the European taxpayer alone will pay the bill," she told the European Parliament on Wednesday.
"I cannot see any scenario in which the European taxpayer alone will pay the bill"
EU officials told Reuters that the Commission will present a draft legal proposal for the loan later this week, which would put Belgium's concerns at rest. A decision on the reparations loan needs to be made soon. Ukraine’s financial needs are estimated at around 135 billion euros through the end of 2027, and the country is in danger of running out of money early next year.
EU leaders intend to sign off on the loan at a summit in Brussels on 18 December. The bloc is also working on alternatives in case that deadline is missed, diplomatic sources told Politico this week. That includes a bridging loan to help Ukraine stay afloat while the EU works out a solution that Belgium can live with.
US influence
Debate around frozen Russian assets intensified last week after the leak of a controversial 28-point US proposal. This included a scheme to put 100 billion dollars of the frozen assets in a US-led fund to reconstruct Ukraine. Per the leak, the EU would have to contribute another 100 billion dollars, while the US would receive 50 per cent of the profits.
The proposal was swiftly adjusted during subsequent talks in Geneva between the US, Europe and Ukraine. Negotiators reportedly returned to the principle that Ukraine must be fully compensated for Russia’s war, including through continued use of the frozen Russian assets, which would remain blocked until Moscow pays for the damage it caused.
The US proposal might have unintentionally helped the EU to come to an agreement sooner than expected. "If we don’t move, others will move before us," an anonymous EU official told Politico this week.
PHOTO © FREDERICK FLORIN / AFP
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