Hungary blocks €50 billion loan to Ukraine until US elections are over
Photo: Hungarian Finance Minister Mihaly Varga (Getty Images)
Hungary has decided to postpone its final decision on a $50 billion loan to Ukraine until after the US presidential elections. Additionally, Budapest has delayed the decision to extend EU sanctions against Russia, announced Hungary's Finance Minister Mihály Varga, according to Reuters
"We believe that this issue, the prolongation of the Russian sanctions, should be decided after the US elections. We have to see in which direction the future U.S. administration is going with this issue," he stated.
The loan, agreed upon by G7 leaders in June, will be financed using around $300 billion of frozen assets from Russia's central bank frozen in the West. The European Union is prepared to provide up to €35 billion from these assets to support the loan, with the remaining funds expected to come from the US and other G7 members.
Meanwhile, Washington insists on revising the terms of the extension of EU sanctions against Russia, proposing to change them from every six months to three years. This is necessary to ensure stable financing of the loan that the G7 countries plan to provide.
The issue will be discussed at a G7 finance ministers' meeting in Washington at the end of October, but final agreements are expected only after the US elections on November 5.
Ukraine's loan
In June, G7 leaders agreed to provide Ukraine with a $50 billion loan, to be repaid using revenues from frozen Russian assets.
The European Union also approved a €35 billion loan for Ukraine, secured by future proceeds from the assets of the Russian central bank. This will ensure stable financial support for Ukraine, especially in light of possible changes in US policy.
Deputy Head of Ukraine’s Presidential Office, Iryna Mudra, noted that it remains unclear how Ukraine will access the $50 billion loan from frozen Russian assets, as there is a lack of political will to allocate the funds.
