LUXEMBOURG — The EU will urge its G7 allies to use Russian frozen assets to issue their own reparation loans to Ukraine when the group’s finance ministers gather in Washington next week, according to the bloc’s economy chief Valdis Dombrovskis.
“What we are discussing is the possibility for G7 members to apply a similar mechanism as reparations loans to Russian sovereign assets located in their territories,” the Latvian commissioner told reporters after a gathering of EU finance ministers in Luxembourg. “For example, U.K. and Canada have expressed interest following this European example.”
The EU is still negotiating the financial engineering needed to finance a €140 billion reparations loan, but political momentum for the initiative is gathering, as Ukraine faces a budget shortfall of billions next year. The International Monetary Fund estimates that this shortfall will grow to $65 billion over the next two years.