Brussels is reportedly considering a €15 billion bond emission to finance Ukrainian government operations
Politico Europe reports that the European Union will fund operating costs of Kiev’s government, for at most three months. This was based on diplomatic sources. The €15 billion would be raised through a new debt emission, using the template established for Covid-19 relief.
Ukrainian President Volodymyr Zelensky has told the International Monetary Fund (IMF) he needed $7 billion per month ($1 = €0.95) to pay salaries, pensions and other government expenditures. For the next three months, America has promised to contribute a third. Politico reports that the EU will make up any gap with special bonds.
According to reports, ambassadors representing member countries were briefed by the European Commission on Friday. The plan involves the issuing of debt with guarantees from EU members. The scheme is structured along the lines of SURE, the program used to raise €100 billion in aid for EU citizens who lost their jobs due to the Covid-19 lockdowns. The bonds were then issued with a range of 5-30 year terms.
“Whenever there’s a problem with money, [the Commission] says SURE!” Politico quoted a diplomat as saying.
The plan could be unveiled as early as May 18 and at least three countries – including Austria, Germany, and Greece – have asked for alternative options, according to the outlet. According to reports, they are hoping that non-EU nations like Norway, Japan and the UK will accept their plans. “chip in”As well, leaving EU would leave it with a smaller debt load. France also suggested that the heads of EU countries discuss this issue in a summit meeting held at the May end.
Josep Borrell, EU’s foreign policy chief has suggested another way to finance rebuilding Ukraine. He proposed confiscating Russian foreign currency reserves that are currently under EU sanctions. Borrell mentioned the case of Washington seizing the Afghan central banks’ funds after it pulled out of Afghanistan. The Taliban then took control. It is “full of logic” to use Russian assets the same way, Borrell told FT in an interview published on Monday.
In February, US President Joe Biden seized half of the $7 billion in Da Afghanistan Bank’s assets held in US financial institutions, saying it would go towards compensating victims of 9/11 terrorist attacks, while the other half would go towards “the benefit of the Afghan people and for Afghanistan’s future,” though it was not specified as to how.
The New York Times described it as follows: “highly unusual,”It was branded theft by the Taliban, while Hamid Karzai (the former US-backed President of Afghanistan) called it such. “unjust and unfair and an atrocity against Afghan people.”
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