EU plans trust fund for Ukraine – POLITICO

The European Union is preparing a solidarity trust fund for Ukraine, according to officials familiar with the matter.

The fund is meant to help Ukraine with liquidity support – the country needs around $5 billion a month to stay afloat, according to Ukrainian Finance Minister Serhiy Marchenko’s comments to his EU counterparts at the beginning of the month – as well as its reconstruction needs.

Estimates for rebuilding the country’s war-damaged infrastructure are vast, but most run into the hundreds of billions of euros.

Brussels is reluctant to give figures on the fund as hostilities continue, but it has begun an assessment of Ukraine’s financing needs with the World Bank, an official said Thursday.

The idea of ​​an EU trust fund was discussed by European Council President Charles Michel with Ukrainian President Volodymyr Zelenskyy during his recent trip to Kyiv, according to another official, and it was welcomed by ministers finance of the G7 during their meeting in Washington on Wednesday.

The fund would borrow from past EU experiences such as the €6 billion EU Facility for Refugees in Turkey, intended to support Ankara’s accommodation and processing of refugees and migrants under of the EU-Turkey migration agreement which aimed to prevent arrivals in the bloc. Another example is the €2.4 billion EU regional trust fund in response to the war in Syria, co-chaired by the UN and open to other donors.

Similarly, the Trust Fund for Ukraine would be managed by the European Commission and would rely on EU budgetary guarantees. But depending on the size of the funding, these would have to be supplemented by donations from EU countries and other donors such as G7 members as well as nations such as Australia and South Korea, the officials said. responsible. The majority of funds are expected to be provided in the form of grants, an official stressed.

The fund would also involve the European Investment Bank, the World Bank and the European Bank for Reconstruction and Development. International financial institutions and EU countries are also bilaterally pledging to support Ukraine, but the purpose of the trust fund would be to get all the money into one pot and then direct it to where it belongs. is needed most, in coordination with the Ukrainian government, a third official said.

The Commission, which is currently working on proposals, did not respond to a request for comment.

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