The International Monetary Fund (IMF) may refuse to grant Ukraine an $8 billion loan if the European Union fails to approve a €140 billion reparations mechanism funded by profits from frozen Russian assets. According to Politico, the key obstacle remains Belgium, whose refusal is blocking the decision and jeopardizing further international support for Kyiv.
Source: OBOZREVATEL
European diplomats warn that without approval of this mechanism, the IMF may lose confidence in Ukraine’s financial stability, as the Fund does not lend to countries lacking long-term financing guarantees. The issue was expected to be decisive at the IMF Board’s December meeting, but during the October EU summit, the Belgian government opposed the initiative, citing financial and legal risks.
“We are facing a timing problem,” acknowledged one senior EU official.
The next EU leaders’ summit is scheduled for December 18–19, leaving very little time to reach an agreement.
The proposal involves using profits from frozen Russian assets to fund Ukraine’s reconstruction, with the principal sum to be repaid by Russia in the future as part of reparations. For Ukraine, this money would effectively serve as a grant.
EU officials warn that if the decision is not made soon, the IMF will have no grounds to justify continued financing. This could trigger a cascading effect — reductions in other international programs, investor outflows, and weakened confidence in Ukraine’s economy.
With U.S. aid declining, the European Union is expected to shoulder most of the financial burden of supporting Ukraine. Meanwhile, the IMF program remains a key indicator of stability and reform — a signal to global markets that Ukraine retains financial viability and the backing of its partners.
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