On October 10, EU finance ministers will discuss the reparation loan to Ukraine and the economic situation in Russia

The finance ministers of the European Union at their regular meeting in Luxembourg on October 10 will discuss the proposal of the European Commission to provide Ukraine with a reparation loan, the basis of which may be Russian frozen assets. Radio Liberty learned about this from several informed diplomats familiar with the preparations for the meeting.

Discussions will take place during the breakfast, scheduled for 10:00 am local time.

It is expected that the European Commission will present fresh developments regarding the possibility of providing Ukraine with a reparation loan and will answer numerous questions from member states.

The issue of guarantees for Belgium, where the assets are stored, remains key. The possibility of providing it with bilateral guarantees, as well as their inclusion in the next EU budget cycle, is being discussed. However, the last option will require the approval of all 27 member states of the European Union.

The next stage in the potential agreement of a multibillion-dollar loan for Ukraine will be a discussion at the level of leaders during their next summit in Brussels at the end of October.

According to diplomats, the leaders are expected to give political consent to progress on this issue. If it is available, the substantive negotiation process will begin.

The European Commission is expected to present a formal proposal, and member states will take up the necessary national procedures to provide appropriate guarantees.

The vast majority of them also require parliamentary approval to provide the guarantees that Belgium requires given that the amount of Russian frozen assets on its territory is equal to a third of its GDP.

Read also: A new idea of ​​using frozen Russian assets by Ukraine. What is the dilemma of the EU?

On October 10, the European Commission will also inform the EU finance ministers about the impact of European sanctions on the Russian economy. Diplomats told RFE/RL that, according to the latest data, the restrictions are working: the economic situation in Russia is deterioratinginflation is twice as high as officially reported.

The amount of cash accumulated thanks to the bonds of the Russian Central Bank in the Belgian central depository Euroclear is about 176 billion euros. These funds are not returned to Russia in connection with the sanctions introduced by the European Union in response to its full-scale invasion of Ukraine. The idea of ​​providing a reparation loan to Ukraine is thatto transfer this cash to the EU, which will “enter into an individual debt contract with Euroclear at 0% per annum.”