“EU must provide a credible financing plan for Ukraine to unlock new IMF funds – European CommissionerEuropean Commissioner Valdis Dombrovskis stated that the EU must provide Ukraine with “credible” financial commitments to unlock
new IMF funds. This would allow for an IMF aid package of approximately $8 billion over the next three years, which is expected in
January.
”, — write: unn.ua
DetailsEuropean Commissioner for Economy Valdis Dombrovskis discussed Ukraine’s $65 billion funding gap and military needs with IMF head Kristalina Georgieva this week in Bulgaria, he told Bloomberg in an interview.
The IMF, which agreed on a $15.6 billion program with Ukraine in 2023, needs a “credible path forward and convincing political commitments from the EU” to agree on new funds for Ukraine, Dombrovskis said. “This must go beyond simply stating: ‘Yes, we will do what is necessary, and we are just discussing options,'” he pointed out.
New support from the EU will allow for an IMF aid package of about $8 billion over the next three years, expected in January, the publication writes.
Using frozen Russian central bank assets to finance a “reparations loan” for Ukraine remains the best option for Brussels, Dombrovskis said. Under this proposal, Ukraine would only have to repay the money if Russia pays war reparations.
European Commission considers two more options in addition to blocked “reparations loan” for Ukraine – Media05.11.25, 17:03 • 3394 views
“The sooner, the better for both the IMF program and for covering Ukraine’s needs,” Dombrovskis said.
However, the asset plan faces legal hurdles, as Belgium continues to insist on additional guarantees to avoid taking on the risk of using about 140 billion euros in cash accumulated in Euroclear, the Brussels clearing company. The EU insists that the assets will not be seized, as Russia will retain the right to claim if it compensates for the damage caused to Ukraine. Nevertheless, Belgium is asking for reliable joint guarantees so as not to be left in debt in case of any legal problems.
“There is also a clear understanding in the European Commission that we need to take these issues seriously and find an effective way to resolve them,” Dombrovskis said.
The European Commission is negotiating with Belgium on how to resolve these issues, including the size of such guarantees. It is also exploring alternative financing options for Ukraine. One option being considered is raising funds in the markets to provide repayable loans. However, Dombrovskis warned that providing such loans to Ukraine would not be the best solution given the state of public accounts in the war-torn country after more than three years of fighting the Russian invasion.
“The question is not so much how the funds are raised, but on what terms Ukraine receives financing and whether these terms do not create problems with debt sustainability,” Dombrovskis added.
A key moment will be the EU leaders’ summit in Brussels next month. According to a person familiar with the situation, their support for one of the financing options at this meeting could be enough to meet the IMF’s needs.
What about the EU aid to Ukraine in the coming years and is there a connection with the IMF – the European Commission’s response03.11.25, 16:21 • 39204 views