Ukraine is facing a €55bn (£48bn) budget black hole that could determine the course of the war with Russia. Kyiv risks running out of funds in the spring, crippling its defences, analysts warn, unless a proposed EU-backed loan using frozen Russian assets is approved.
The European Commission has set out a plan to use €210bn of the funds to support Ukraine in a “reparations loan”, with the first tranche of €90bn expected over the next two years.
The reparations loan relies on immobilised Russian sovereign assets mostly held under the stewardship of Euroclear, the Belgium-based financial depositor.
The plan has teetered on collapse after Belgium blocked it over fears of legal reprisals from Russia, demanding a backstop to protect it from future lawsuits. European leaders will meet on Thursday for a summit aimed at finding a solution. Kyiv, meanwhile, is expected to exhaust its available financing by mid-2026 if the loan fails to materialise.
“It is the biggest package of financing that has been discussed for Ukraine over the last few years, but even the level of needs now, in terms of defence and financing, are much higher. So the reparations loan is really more about keeping Ukraine afloat,” Maksym Samoiliuk, an economist at Kyiv’s Centre for Economic Strategy, said.
Solutions for financing Ukraine beyond the reparations loan also remain elusive.
Source: The Telegraph.
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