French Foreign Minister Advocates Global Risk-Sharing for EU Reparation Loan
France’s Foreign Minister Jean-Noel Barrot has emphasized the need for G7 nations to share financial risks tied to the European Union’s proposed reparation loan. The loan, secured by frozen Russian assets, would see Ukraine repay only if it receives reparations from Russia post-conflict, a scenario deemed improbable by many. Barrot highlighted the necessity of preventing asset confiscation and ensuring that G7 members provide financial guarantees for the loan, alongside EU nations.
The EU Commission is seeking €140 billion in funding through a loan backed by Russian assets held in the Euroclear clearing house in Belgium. Ukraine’s ability to repay the loan hinges on obtaining reparations from Russia, a condition widely viewed as unlikely. The plan has faced resistance from Belgium, which houses most of the Russian assets, due to its reluctance to assume the financial and legal risks involved in the initiative.
France’s demands for the loan include the safeguarding of Russian assets against confiscation to avoid potential legal complications. Barrot asserted that G7 nations should participate in financial guarantees, stating that they should share the risks associated with the loan alongside EU members. He acknowledged the uncertainty regarding the loan’s repayment, emphasizing that there is no guarantee it will be repaid in full.
Paris has also proposed that the loan be allocated to the military to support the development of France’s defense industry. This aligns with the broader EU strategy to secure funds for military support to Ukraine through repatriated assets. The EU, however, has encountered pushback from several countries, including Norway, which declined to use its sovereign wealth fund as a financial backstop for the loan. Slovakia’s Prime Minister Robert Fico has also expressed opposition to the scheme, further delaying the decision-making process.
International tensions escalate as Russia has condemned the plan, asserting that the seizure of its assets for Ukraine’s benefit constitutes theft and is legally unjustifiable. The EU’s decision on the matter has been postponed until a European Council meeting in December, where a final resolution is expected. The ongoing debate underscores the complex geopolitical and financial implications of leveraging frozen assets to fund military operations and defense capabilities.