The planned EU loan to Ukraine of 140 billion euros, which is to be secured by frozen Russian assets, does not pose a threat to the sovereign ratings of EU countries – this was stated by two leading rating agencies, despite concerns about possible Russian lawsuits. This is reported by Reuters, writes UNN.
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The European Union continues to work on a large-scale financial support mechanism for Ukraine, which provides for a loan of 140 billion euros to Kyiv, secured by Russian assets frozen in the Euroclear system. According to two of the largest international rating agencies, the risks to the sovereign ratings of member states remain minimal.
Belgium, where a significant part of Russian funds is currently stored, expresses the greatest concern and does not rule out potential legal attacks from Russia. At the same time, experts believe that if the risks are evenly distributed among all EU members, such lawsuits are unlikely to affect the country's credit status.
The proposed EU financial instrument provides for the conversion of frozen Russian assets into long-term zero-coupon debt, which will be issued by the European Commission. The funds received are to secure a loan to Ukraine, which will be repayable only after Russia compensates for the damage caused by the war. In theory, member states may be obliged to cover the loan amount, but only if Moscow suddenly returns its assets.
S&P's lead analyst for the EMEA region, Frank Gill, said his agency sees no threats to the sovereign ratings of EU countries.
Since these guarantees are backed by liquid assets, we do not classify this as a significant fiscal risk.
A similar assessment was given by Federico Barriga-Salazar, head of sovereign ratings for Western Europe at Fitch, noting that the EU's obligations would be considered contingent and could only be activated under exceptional circumstances.
A full guarantee of the proposed 140 billion euro loan would be large for Belgium, at 22-23% of GDP, but small for the EU as a whole, less than 1% of GDP.