European Commission President Ursula von der Leyen will announce in Kyiv a €35 billion EU loan to Ukraine as part of the Group of Seven (G7) plan to raise $50 billion from future profits from frozen Russian state assets.
The Financial Times reports this with reference to three sources.
During her eighth visit to Ukraine, Ursula von der Leyen will discuss a range of issues with leaders in Kyiv, from winter defence preparedness to EU accession and progress on G7 loans.
‘The loan announcement comes at a time of urgent need for Ukraine to help due to Russia's repeated attacks on its energy infrastructure and after months of negotiations with G7 partners over their share and the structure of the loan,’ the newspaper writes.
In June, the G7 leaders agreed to provide Ukraine with $50 billion in loans and divide them according to their relative economic weight, which would have resulted in the EU and the US covering $20 billion each, with Canada, Japan and the UK making up the rest.
However, the US conditioned its participation on legal assurances that the assets would remain frozen for longer. The EU, with almost €200 billion of Russian state assets frozen, could not guarantee this because of Hungary's resistance to extending sanctions against Russia.
To compensate for the American position and to override Budapest's veto, the European Commission sought to increase its share of the loan to €40 billion, guaranteed by the bloc's general budget. But EU capitals disagreed with this figure, putting pressure on Brussels to get the UK, Canada and Japan to increase their share.
‘The final €35bn is a compromise that allows the US to enter the loan later and thereby reduce the risk to the EU,’ the FT notes.
The majority of EU countries and the European Parliament must approve the EU loan by the end of the year.