The EU removes debt risks for France and Italy: Eurostat paves the way for loan approval for Ukraine
11 December 08:25
Eurostat has reassured the key EU economies of France and Italy by confirming that their participation in the new loan package to support Ukraine will not increase their official public debt. This was reported by Politico, according to "Komersant Ukrainian".
What is stated in the letter of the statistical office
In a letter sent to the governments of the two countries, the Statistical Office explained that the financial guarantees underlying the €210 billion package will be classified as “contingent liabilities.” This status means that they will not be included in debt statistics until there is reason to believe that they will have to be activated. Eurostat notes that this is unlikely to happen.
France and Italy, which have some of the largest debt burdens in the EU, feared that even formal participation in the guarantee mechanism could provoke investor concerns and increase borrowing costs. Eurostat’s clarification is likely to remove the last political objections before next week’s talks between EU leaders.
The loan package, which is supposed to ensure Ukraine’s financial sustainability in 2026, is based on a model in which the loan is guaranteed by the proceeds of frozen Russian state assets in the EU, primarily in the Euroclear system in Belgium.
The EU is trying to finalize difficult negotiations on the use of Russian assets
The EU is trying to conclude complex negotiations on the use of Russian assets, particularly as some countries, including France, are cautious about mechanisms that could create budgetary risks for them. Separately, Paris, according to the FT, is trying to protect Russian assets in French banks worth €18 billion from decisions that may affect the domestic legal system.
When will EU leaders return to the issue of supporting Ukraine?
EU leaders are to return to the issue at the December 18 summit. The European Commission is proposing two models of support for Ukraine for 2026-2027: classic EU borrowing or a so-called “reparations loan” linked to Russian assets.
In its letter, Eurostat emphasized that there is currently no reason to believe that the responsibility for the loan could be transferred to member states, which means that the risks actually remain at the level of the European Commission.
The clarification may create a political “track” for agreeing on a package on which the continuation of macro-financial support for Ukraine in the next EU budget cycle depends.
