According to officials with knowledge of the matter, the European Union is preparing a solidarity trust fund for Ukraine.
The fund aims to help Ukraine with liquidity support — the country needs around $5 billion a month to stay afloat, according to comments by Ukrainian Finance Minister Serhiy Marchenko to EU peers earlier this month — as well as its reconstruction needs.
Estimates for rebuilding the war-torn country’s infrastructure are far-reaching, but most are in the hundreds of billions of euros.
Brussels is reluctant to provide figures on the fund as hostilities continue, but it has begun an assessment of Ukraine’s financing needs together with the World Bank, an official said on Thursday.
The idea of the EU trust fund was discussed by European Council President Charles Michel with Ukrainian President Volodymyr Zelenskyy on his recent trip to Kyiv, according to another official, and it was done welcomed by G7 finance ministers at their meeting in Washington on Wednesday.
The fund would draw on previous EU experience such as around EUR 6 billion EU Facility for Refugees in Turkey, which was designed to support Ankara’s housing and processing of refugees and migrants under the EU-Turkey migration deal, which was trying to prevent arrivals in the bloc. Another example is the 2.4 billion euros EU Regional Trust Fund in Response to the Syrian Warunder the joint chairmanship of the United Nations and open to other donors.
Likewise, the Trust Fund for Ukraine would be managed by the European Commission and would benefit from EU budget guarantees. However, depending on the level of funding, these would need 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, officials said. The bulk of the funds would have to come in the form of grants, an official stressed.
The fund would also include the European Investment Bank, the World Bank and the European Bank for Reconstruction and Development. International financial institutions and EU states are also pledging bilateral support to Ukraine, but the aim of the trust fund would be for all monies to go into one pot and then be directed to where it is most needed, in coordination with Ukraine’s government, a third official said .
The Commission, which is now working on proposals, has not responded to a request for comment.
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