Revealed: EU plans loans and grants to help rebuild Ukraine | European Commission
Ukraine could receive loans, grants and possibly the proceeds of the seized Russian oligarch’s assets to help pay the multibillion-euro cost of rebuilding the country after the ruinous war launched by the Kremlin, according to a leaked EU reconstruction plan.
In the plan drawn up in Brussels, the European Commission indicates that the Ukrainian government will have to take out loans to pay for the reconstruction of its war-torn country. Non-repayable grants from EU member states would provide another slice of the funds needed to rebuild destroyed homes, schools, roads, railways, airports and bridges.
The EU is also offering to assess the feasibility of using assets seized from sanctioned Russians and Belarusians after a proposal from European Council chief Charles Michel earlier this month. “I am absolutely convinced that it is extremely important not only to freeze the assets, but also to make possible their confiscation, to make them available for the reconstruction of the country,” he told the Ukrainian news agency. Interfax.
Lawmakers in the United Kingdom and the United States have also proposed seizing Russian assets to help rebuild Ukraine and ease the plight of the country’s refugees.
Brussels officials have also called on the EU to borrow in bulk from international capital markets to fund loans for Kyiv, according to the leaked report.
If agreed, it would only be the second time in its history that the EU has borrowed as a whole rather than as individual member states, after funding the historic €750bn Covid recovery plan. (£635 billion) in 2020.
The idea is floated in a Ukraine relief and reconstruction plan seen by the Guardian that the commission is due to publish on Wednesday. The figures were left blank in the document, pending further discussions in Brussels.
The document notes, however, that the financial needs “are expected to be substantial” and that the reconstruction would take more than a decade. He also estimates that the damage to physical infrastructure alone could amount to more than 100 billion euros.
To pay the bill, the commission is offering a mix of grants and cheap loans in which EU member states and non-EU countries could make contributions through the bloc’s reconstruction programme.
Ukraine will need “significant short-term financial assistance” to maintain basic services, provide humanitarian aid and repair critical infrastructure, the EU document says. To meet these urgent needs, the commission offers low-interest loans with long-term repayment terms.
US President Joe Biden last month proposed a $33bn (£27bn) aid package for Ukraine, which includes more than $20bn in military spending.
The EU has provided €4.1 billion in emergency loans and humanitarian aid since the start of the Russian invasion and has agreed to finance weapons and other non-lethal military aid worth 1.5 billion euros. This does not include the money that individual EU member states have provided.
The EU’s reconstruction plan would be carried out jointly by Brussels and Kyiv, according to the document. Although it does not explicitly mention Ukraine’s hopes of joining the EU, the plan would aim to bring the aspiring member into line with EU standards, including rule of law, anti-corruption, energy and climate.