The promised $50 billion loan to Ukraine is in jeopardy due to disagreements among allies – Politico

The $50 billion loan promised to Ukraine, backed by frozen Russian assets, is now under threat.

This information reported according to Armin Steinbach, a professor of law and economics at the Paris School of Business, in a column for “Politico”.

“What began as a multilateral statement of support for a besieged country has now turned into a fragmented and shaky agreement, plagued by internal political and legal disputes. The loan, initially designed to be risk-free for G7 creditors, faces a real risk of collapse unless urgent action is taken,” Steinbach wrote.

The issue has currently stalled due to Hungary’s position, as it has promised to veto the long-term freezing of Russian assets—a necessary step for the U.S. and Europe to issue this loan.

For now, the EU intends to independently provide Ukraine with a $40 billion loan, but it will be “regressive”. This means that if the Russian assets do not generate enough returns, Ukraine would be responsible for repaying the $40 billion loan, which would be “an unbearable burden for an economy already devastated by war.” This could also jeopardize Ukraine’s future access to IMF loans.

Steinbach concludes that this loan was supposed to be a “symbol of Western unity,” but instead it has revealed the “growing fragmentation in support for Ukraine.”