May 10, 2022 10:10 GMT
The aid mechanism is similar to the scheme used during the coronavirus pandemic and could be revealed on May 18.
The European Commission plans to issue new debt to cover Ukraine’s financial needs in the next three months. This was reported on Monday Politicianciting three diplomats familiar with the matter.
The sum is estimated to reach 15 billion euros (more than $15.7 billion) and is raised through a similar scheme used during the coronavirus pandemic.
The Government of Ukraine and the International Monetary Fund pointed out that the country needs 5,000 million euros monthly to keep its economy afloat. This includes the payment of salaries and pensions, as well as care for people displaced by the current conflict, among other expenses. For its part, the US has agreed to provide a third of the sum in question, while the European Union (EU) wants to make up the difference with special bonuses.
In particular, the European Commission informed the ambassadors about their plans last Friday, details the media. The support mechanism includes the issuance of debt under guarantees by member states. In this sense, the scheme is similar to the ‘SURE’ (‘insurance’, in English) program applied during the pandemic to support those who lost their jobs due to confinements. Back then, the EU executive branch requested €25 billion as guarantees to raise €100 billion.
“Whenever there is a problem with money, the Commission says ‘SURE!'” Politico quotes one of the diplomats.
The plan could be revealed on May 18. At least three countries – Germany, Austria, Greece – requested to consider alternative financial avenues. According to Politico, they expect other non-bloc countries such as Japan, Norway and the UK join the initiative, which would reduce the debt burden for the EU. Meanwhile, France proposed to discuss the issue during the meeting of the leaders of European countries to be held at the end of May.
Meanwhile, the head of EU diplomacy Josep Borrell urged this Monday to confiscate frozen funds from Russia and lead them to help restore Ukraine after the military conflict.
In an interview with The Financial Times, the diplomat mentioned as an example the blocking of billions of dollars of the assets of the Central Bank of Afghanistan by the United States, part of which will be allocated to compensate the victims of terrorism and in humanitarian aid to the country. According to Borrell, it would be logical to consider similar measures regarding Russian reserves.