In Norway, calls are growing for the government to use part of its sovereign fund of 1.8 trillion euros to help unlock a European loan for Ukraine amounting to 140 billion euros. The initiative came from five Norwegian political parties. Euractiv reports this.
What is being proposed in Norway
European leaders at the summit on October 23 failed to reach an agreement on the financing mechanism for the loan. Belgium demands the distribution of legal and financial risks among EU countries before agreeing to the use of frozen Russian assets to support Ukraine. In response, Norwegian parties are urging Oslo to intervene and participate in the process to unlock a decision.
Prime Minister Jonas Gahr Støre tasked last week to conduct a 'full review' of Norway's possible participation. The country has the largest sovereign fund in the world, primarily formed from income from oil and gas extraction, particularly due to the spike in energy prices after Russia's invasion of Ukraine.
State Secretary of the Ministry of Finance Ellen Reitan stated:
'We are closely monitoring the situation and continue dialogue with the EU.'
There is also an opposition stance. Former Foreign Minister Ine Eriksen Søreide said:
'Norwegian conservatives are positively inclined, but only on the condition of joint participation with the EU.'
Context of the decision
The EU is expected to aim to direct frozen Russian assets towards restoring Ukraine and financing its needs. According to IMF estimates, Kyiv needs around 55 billion euros over the next two years. Among the discussed options is the use of profits from Russian assets or a credit mechanism backed by guarantees.
Main points of Belgium's position, which is holding back the decision:
wants legal guarantees in case of the return of Russian assets
seeks distribution of financial risks among EU countries
expects all countries that hold Russian assets to join the scheme.
Currently, there are no signs that Norway will lead the mechanism of credit support, although the country may become one of the sponsors.
Most of the frozen Russian assets are stored in the Belgian depository Euroclear. The European Commission is working on legal mechanisms to use these funds for Ukraine. The idea of a 'reparative loan' is part of a broader discussion regarding the involvement of international partners in financing Ukraine's recovery.