Russian assets frozen in Europe to serve as collateral for European Commission's loan of up to EUR 35 billion to Ukraine - Dombrovskis

RIGA - Russian assets frozen in European countries will serve as collateral for the proposed European Commission's loan of up to EUR 35 billion to Ukraine, as the Commission's Executive Vice President Valdis Dombrovskis (New Unity) said in an interview with TV3.

The extension of the Russian assets freeze is to be decided on a semi-annual basis. According to Dombrovskis, this could happen much less frequently - once every three years - if the European Union's member countries agree so. At the moment, it appears that Hungary might oppose this, which means that further discussions are expected, said Dombrovskis.

Dombrovskis pointed to the G7 summit decision that Russian assets should remain frozen until Russia pays reparations to Ukraine. When asked about the chances of getting Hungarian support for these ideas, Dombrovskis replied that the Commission's proposal on a loan to Ukraine was still very fresh and discussions had only just started, so it would be too early to predict how the negotiations would progress and exactly how Hungary would position itself on this issue.

As to how Ukraine will be allowed to spend the loan of up to EUR 35 billion, Dombrovskis said that Ukraine would be able to use the money to cover its general budget needs.

"While the original idea was that the frozen Russian assets generate some income and this income gradually becomes available to Ukraine, now we are granting a loan on the basis of these assets as collateral, and Ukraine has access to substantial financial resources immediately," Dombrovskis explained.

Russian assets currently frozen in Europe could be worth more than EUR 200 billion, Dombrovskis added.