Norway Could Bolster Ukraine Aid Through Massive €140 Billion Loan
Oslo could unlock fresh funding for Kyiv by pledging part of its world's largest sovereign wealth fund as collateral.
The Gaze reports on it referring to the Times. Norway is discussing a proposal to unlock a European military loan of more than €100 billion for Ukraine, securing the debt with its €1.7 trillion sovereign wealth fund. With Kyiv desperately in need of money and lenders willing to continue financing its huge deficit, European Union leaders have come up with a plan to borrow €140 billion against frozen Russian state assets, The Times reports.
This plan has met with resistance from Belgium, where the financial institution that administers Russian money is located. It will be difficult for the EU to raise a loan without significant collateral due to the risk that Ukraine may never be able to repay the funds. Negotiators are expected to try to convince the Belgians at a meeting on Friday.
However, Oslo may still come to the rescue. Norway's political elite has been stung by suggestions from Denmark and other European partners that the NATO but non-EU country is “profiting from the war” by selling large amounts of oil and gas to its allies, while giving back relatively little. Norwegian economists Howard Halland and Knut Anton Merk argue that their country should compensate for this windfall by offering part of its vast financial assets as collateral.
The Norwegian Government Pension Fund was established in 1990 to invest revenues from fossil fuels. It is now the largest sovereign wealth fund in the world. The idea has gained momentum in the Norwegian parliament, where four of the nine political parties have already supported it. Among them are several left-wing parties, whose support is needed by Prime Minister Jonas Gahr Støre of the Labour Party to maintain his government's minority.
Guri Melby, leader of the Liberal Party, told the NTB news agency: “Ukraine is fighting not only for its freedom, but also for the freedom of all of Europe — including ours. Norway must contribute where it can. Acting as a guarantor for Ukraine's loan is both responsible and right.”