The European Union (EU) will have to revisit the issue of using frozen Russian assets, said European Commissioner for Economy and Productivity Valdis Dombrovskis, who met with representatives of the Latvian media in Riga on Thursday.
As previously reported, in June the EU will pay Ukraine 3.2 billion euros from a loan of 90 billion euros that was approved in April. The loan to Ukraine will be financed through jointly issued EU bonds in the capital markets and secured by the existing reserve in the long-term budget of the bloc.
Dombrovskis noted that the EU loan is a reparations loan, and Ukraine is not obliged to repay it until Russia pays reparations, so at some point, there will have to be a discussion about what to do if, for example, Russia does not pay reparations.
The Commissioner explained that the loan conditions stipulate that in such a case, the EU reserves the right to use the immobilized assets of the Central Bank of Russia. He mentioned that the EU will also provide a subsidy for interest rates, so the loan to Ukraine resembles a grant more than a loan.
Dombrovskis reminded that there is another separate decision made earlier stating that immobilized Russian assets must remain so until Russia pays reparations to Ukraine. This decision was made before the decision on the loan to support Ukraine.
The Commissioner acknowledged that the initial proposal of the European Commission was to use financing related to immobilized Russian assets for the loan to Ukraine, but it did not receive support, so currently, the loan is financed through EU borrowings in the domestic market, and the question will arise as to how to repay it.
"Since Ukraine is not obliged to repay the loan until Russia pays reparations, we reserve the right to use these immobilized funds; otherwise, it will have to be repaid by the EU member states themselves, which would certainly become a serious financial burden," Dombrovskis said.
As reported, the EU loan is intended to cover Ukraine's most urgent economic and military needs and will allow the country to continue its fight against Russia.
Of the 90 billion euros that will be available to Ukraine, one third is intended for budget support, while two thirds, or 60 billion euros, are for defense-related expenses.
