Purra about the progress of the war reparations loan: “I am optimistic”

The EU finance ministers gathered in Brussels discussed financing options for Ukraine at Thursday’s working dinner.

Finance minister Riikka Purra (ps) said at the press conference after the meeting on Friday that he was optimistic that the war reparations loan based on the use of Russia’s frozen funds will proceed.

“I am optimistic that we will reach a solution,” Purra said.

An attempt is made to make a decision on the war reparations loan at the EU summit held on Thursday.

“I believe that the European Council will find a solution”, Purra continued.

The Commission has presented two options to secure Ukraine’s financial needs for the next two years. They are a joint loan taken by the EU or a war compensation loan based on Russia’s frozen cash resources.

According to Purra, a solution based on a joint loan taken by the EU has proven to be practically impossible, so there has been a discussion about a war compensation loan.

Finland and many other member countries have considered it the best option.

According to Purra, the dividing lines of the member countries are quite traditional: pro-Russian Hungary and Slovakia are against supporting Ukraine by utilizing Russia’s frozen funds.

According to Purra, Belgium also raised its concerns in Thursday’s discussions. Belgium, which administers the majority of the frozen Russian funds, has opposed the war compensation loan because the country fears possible Russian countermeasures.

According to the Financial Times, the Central Bank of Russia has announced that it will seek damages from Euroclearwhich manages a 185 billion euro share of the frozen Russian assets.

“Russia naturally does not like these plans, and according to today’s information, it has, among other things, sued Euroclear,” said Purra.

Belgium has also demanded guarantees from other EU countries that it will not have to bear the risk alone.

The war reparations loan model presented by the commission has direct guarantees from the member states to support the war reparations loan granted to Ukraine.

“Member states guarantee that the Commission would have the opportunity to pay financial institutions in every situation, so that they can fulfill their commitments related to Russian central bank funds,” said Purra.

A significant decision

On Thursday, the EU countries made it to the historic agreement that the frozen assets of the Central Bank of Russia will remain frozen until Russia pays war reparations to Ukraine.

“This was one very demanding part of this whole, but now it seems that it is moving forward correctly and in a good position,” said Purra.

The ban on the transfer of frozen Russian funds is not directly related to what kind of entity Ukraine’s possible financial solution will be, but it was needed in order to make a decision on the use of Russia’s frozen funds.