EU envoys approve up to 35 bln euros loan to Ukraine

10/10/2024 6:16

        EU envoys agreed on
        Wednesday to give Ukraine up to 35 billion euros as part of the
        bloc's share in a larger planned loan from the Group of Seven
        nations (G7) backed by frozen Russian central bank assets, the
        bloc's current Hungarian presidency said.
        
        The G7 and European Union announced in June they would
        provide a $50 billion loan to help Ukraine, serviced by profits
        generated by Russian assets immobilised in the West. These
        assets were frozen shortly after Russia launched a full-scale
        invasion of Ukraine in February 2022.
        
        More than two thirds of the assets, some 210 billion euros,
        are stuck in the 27-nation EU and of those, most are held by
        Belgium's depository Euroclear.
        
        With Wednesday's accord, the EU can rely on headroom in its
        budget as a guarantee in case the restrictions on the assets are
        lifted. All of the EU's sanctions on Moscow must be renewed
        every six months via a unanimous EU vote. But Hungary, with its
        Russia-friendly stance, has repeatedly tried to block sanctions
        and measures to help Ukraine, and could halt a renewal.
        
        
        
        Hungary - which holds the six-month rotating EU presidency -
        does not want to discuss any possible extension for the regime
        holding the assets until after the U.S. election in early
        November.
        
        The European Commission proposed extending the renewal
        period from six to 36 months but Hungary did not table the
        proposal during envoy discussions, EU diplomats said.
        
        The Commission's loan proposal also needs to be approved
        by the European Parliament as it involves the bloc's budget. EU
        lawmakers are expected to vote on the package on Oct. 22,
        diplomats said.
        
        The agreement helps bypass a sticking point, which was
        Hungary's refusal to extend the renewal period for the sanctions
        keeping the assets frozen.
        
        The deal will not be enough to reassure the United
        States, however. Washington initially agreed to contribute some
        $20 billion but does not want to move forward without assurances
        that the Russian assets will remain frozen for longer.