BRUSSELS, Sept 30 – The Group of Seven (G7) countries want to agree on a political decision on the $50 billion loan for Ukraine by the end of October so that the cash could be available before the end of this year, a senior official of the European Commission said on Monday.
Among them is the G7, which represents the United States, Canada, Japan, Britain, France, Germany, and Italy. The EU, with all its dimensions and through its institutions, falls into the group, as well.
“The G7 presidency is now targeting political agreement on participation in this. Loans initiative by the end October which would give all the G7 lenders adequate time to operationalise loans by the end of this year,” European Commission Executive Vice President Valdis Dombrovskis said to the European Parliament.
The loan for Ukraine would be serviced from profit made by Russian assets immobilised in the West. Over two-thirds of the assets, some 210 billion euros, are in the EU.
Consequently, the EU would provide the bulk — up to 35 billion euros ($39 billion) — of the loan. “There are already clear commitments from Canada, UK, and Japan to come on board,” Dombrovskis said.
He says that the United States wanted to hear clear commitments from Europe that until these frozen assets’ funds are repaid, they will be accessible for refunding this loan, as long as necessary.
The snag is that the EU ruling by unanimity to freeze Russia’s money within the 27-nation bloc has to be renewed every six months, which does create legal uncertainty because one country, for example, the Russia-friendly Hungary, could vet the renewal.
To meet Washington’s objection, the EU would vote in October to extend the renewal period from six to 36 months, Dombrovskis said, adding success was likely but far from certain. “In the absence of such a change, the U.S. can still join the initiative, but with a much lower amount,” he said.
The EU part of the loan has to be in place legally this year, he said, because the EU will borrow that money against the security of the EU budget – something the current rules allow up to the end of 2024.
