Sweden backs plan to provide Ukraine with ‘reparations loan’

She reported this on Facebook, according to Ukrinform.

“Sweden supports providing Ukraine with a ‘reparations loan.’ We are talking about direct budget support of up to EUR 130 billion (since out of the EUR 175 billion in frozen Russian assets in Belgium, EUR 45 billion must be returned to G7 countries for ERA loans in 2025),” Pidlasa wrote.

According to the head of the Budget Committee, the mechanism of the “reparations loan” foresees that de facto Russian money will be transferred for Ukraine’s use, while de jure the claim rights will remain with the Russian Central Bank. Ukraine would only be obliged to repay this loan once Russia pays reparations for the damage it has caused.

She noted that the amount of funding may be less than EUR 130 billion.

“When determining the amount of funding, the EU will rely on the external financing needs of Ukraine’s budget as confirmed by the IMF. And the IMF will insist on keeping the budget deficit within reasonable limits,” Pidlasa explained.

She added that the disbursements would likely be divided into tranches, as is usually the case with EU macro-financial assistance.

“Preliminarily, the decision on the ‘reparations loan’ must be adopted unanimously by all EU member states, which still creates significant uncertainty for the mechanism’s implementation,” Pidlasa noted.

As reported, the European Commission has proposed using frozen Russian assets to finance a new EUR 140 billion loan for Ukraine.