Bloomberg: EU to cover most of expenses for restoring Ukraine

The European Union is planning to establish a solidarity trust fund to finance the reconstruction of war-shattered Ukraine as member states were told they should expect to pay the bulk of the costs, Report informs referring to Bloomberg.

The European Commission told diplomats it’s working on an EU instrument focusing on the long-term needs of the country instead of a multilateral tool since the bloc will foot much of the bill, according to people familiar with the discussion.

Modeled on the post-Covid-19 recovery fund for member states, it would finance investments and reforms in agreement with Ukraine’s government, but it’s not clear how much would be provided through grants or loans, the people said.

Since the war is still ongoing, the EU executive’s arm isn’t willing to put a price tag on the task, but told EU ambassadors that the figure would reach hundreds of billions of euros over decades.

As a first step, the commission would conduct a thorough assessment of the financial needs together with the World Bank. The Ukrainian government estimates that the destruction of Russian forces in its territory amounts to $1 trillion.

Most of the initial aid would go toward rebuilding infrastructure and supporting the provision of public services. Ukrainian President Volodymyr Zelenskiy told Commission President Ursula von der Leyen that his government needs $5 billion to $7 billion per month to cover salaries and other social expenditures.