Kyiv awaits loan secured by income from Russian assets: US and EU withhold funds
There has been a delay in providing Ukraine with $50 billion in financial aid. The proceeds from frozen Russian assets were considered as collateral. The release is being delayed due to ongoing technical and legal disagreements between the US and the EU. According to information published in the New York Times, both sides are having difficulty agreeing on the terms of use of these funds.
The US and the EU cannot agree
As it became known from anonymous sources in the administration of US President Joe Biden, Washington is demanding additional guarantees that Russian sovereign assets will remain frozen until the damage to Ukraine is fully compensated. This requirement is related to the need to comply with certain legal norms and ensure the reliability of financing.
At the same time, US officials have stressed the urgency of reaching an agreement with the EU in the coming weeks. The differences between the parties are said to be technical, not ideological. The situation also reflects the broader challenges the G7 faces in trying to broaden its mandate and find common ground on such important issues.
Earlier, Hungary, which holds the presidency of the EU Council, excluded discussions on lending to Ukraine using income from frozen Russian assets from the agenda. During the meeting of the permanent representatives of the bloc's countries, it was decided to hear the proposal of the European Commission. However, the representatives of the structure subsequently indicated that the proposal for a loan was still at the development stage. The discussion, as journalists of pronedra.ru know, is ongoing. At the same time, it was emphasized that the EU and the G7 countries intend to provide Ukraine with this loan by the end of 2024.
Should Ukraine expect a loan?
The disagreements between the EU and the US primarily concern loan guarantees. Washington wants Europe to freeze the funds indefinitely. This way, they can only be used to repay the loan to Ukraine. However, the EU has not reached a consensus on this issue.
Paolo Gentiloni, the EU's economic commissioner, announced the urgent preparation of a proposal for a $50 billion loan in July. He noted that the proposed mechanism is based on EU budget guarantees and should be completed by the end of the year.
The initiative was discussed in a tripartite format after being officially submitted by representatives of:
European Parliament;
Council of the EU;
EC.
The next step will require formal approval procedures at a plenary session of the European Parliament.
Around 50% of Russia's foreign currency assets were frozen by the EU and the G7 after Moscow launched a special operation in Ukraine. Of these, around €200 billion are in the EU.
