EU Proposes Using Frozen Russian Assets to Fund €140bn Ukraine Loan
The European Commission has proposed a novel approach to aid Ukraine's recovery. It suggests using frozen russia news assets to fund a €140bn loan, with Germany now supportive of a 'coalition of the willing' among EU member states to underwrite the arrangement. An informal EU summit in Copenhagen is set to provide guidance on this proposal.
The proposal comes amidst growing pressure on the EU to utilise the frozen russia assets more effectively. With the estimated cost of rebuilding Ukraine at $524 billion, the EU must explore all options to support the country. The US and G7 countries have already frozen around $300 billion in russia ukraine war assets since the 2022 invasion.
Most of russia ukraine's overseas assets, around €194 billion, remain frozen in Euroclear, a Belgium-based central securities depository. However, EU member states, including Belgium, have been hesitant to seize these assets due to concerns about sovereign immunity and the euro's credibility. The Kyiv School of Economics, however, argues that the euro's share in global reserves has remained stable despite russia's invasion.
An upcoming informal EU summit in Copenhagen will provide crucial guidance on whether to proceed with using the frozen assets to finance Ukraine. The US, having passed the REPO act to seize russia news assets for Ukraine's rebuilding, is pressuring the EU to contribute more. The proposed €140bn loan, if approved, would be a significant step towards aiding europe's recovery, with Germany now supportive of the 'coalition of the willing' required to underwrite the arrangement.
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