Global Economy

EU leaders to agree to set up Ukraine reconstruction fund, vague on detail


European Union leaders will agree on May 30 to set up a fund for the reconstruction of Ukraine once the war with Russia ends, but will remain vague on how it would be financed, draft conclusions of the summit, seen by Reuters, showed on Friday.

The European Commission proposed on Wednesday to set up a “RebuildUkraine” facility of grants and loans of unspecified size, modelled on the EU’s existing recovery fund for which the bloc jointly borrowed on the market.

“A Ukraine reconstruction platform should be set up, bringing together the Ukrainian government, Member States, the European Union as well as partners, financing institutions and organisations,” the draft leaders’ conclusions said.

“The platform will be supported by a new EU solidarity instrument combining EU and Member States’ contributions,” the draft said, without specifying whether the new EU solidarity instrument should include new joint EU borrowing.

Germany has said it opposed more joint EU debt.

Economists’ estimates of the cost of rebuilding Ukraine vary widely between 500 billion euros and 2 trillion euros ($524 billion to $2.1 trillion), depending on the assumptions on the length of the conflict and the scope of destruction.

With sums of such magnitude, the EU is also considering seizing frozen Russian assets in the EU as sources of financing and EU leaders will be supportive, the draft showed.

“The European Council welcomes the efforts made with a view to providing for appropriate confiscation measures, including exploring options aimed at using frozen Russian assets to support Ukraine’s reconstruction,” the draft said.

“In this context, it calls on the Council (of ministers) to act swiftly on the recent Commission’s proposal on criminal law measures in case of violation of EU sanctions,” it said, though the sentence is in brackets, meaning it could still be changed.



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