EU plans trust fund for Ukraine

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The European Union is preparing a solidarity trust fund for Ukraine, according to officials with knowledge of the matter.

The fund is meant to help Ukraine with liquidity support — the country needs around $5 billion per month to stay afloat, according to Ukrainian Finance Minister Serhiy Marchenko's comments to EU counterparts earlier this month — as well as its reconstruction needs.

Estimates for rebuilding the war-damaged country's infrastructure are wide-ranging but most are in the several hundreds of billions of euros.

Brussels hesitates to put figures on the fund, as hostilities are ongoing, but it has started an evaluation of Ukraine's finance needs together with the World Bank, an official said Thursday.

The EU's trust fund idea was discussed by European Council President Charles Michel with Ukrainian President Volodymyr Zelenskyy on his recent trip to Kyiv, according to another official, and it was welcomed by G7 finance ministers at their meeting in Washington on Wednesday.

The fund would borrow on past EU experiences such as the €6 billion EU Facility for Refugees in Turkey, meant to support Ankara's accomodation and processing of refugees and migrants under the EU-Turkey migration deal that sought to prevent arrivals to the bloc. Another example is the €2.4 billion EU Regional Trust Fund in response to the Syrian war, co-chaired by the U.N. and open to other donors.

Similarly, the Ukraine trust fund would be managed by the European Commission and draw on EU budget guarantees. But depending on the size of the financing, these would need to be supplemented by donations from EU countries and other donors such as G7 members as well as nations such as Australia and South Korea, the officials said. The majority of funds would have to be supplied as grants, one official stressed.

The fund would also involve the European Investment Bank, the World Bank, and the European Bank for Reconstruction and Development. International financial institutions and EU countries are also bilaterally pledging support to Ukraine, but the goal of the trust fund would be to have all the money come into one pot and then be directed where it's most needed, in coordination with the Ukrainian government, a third official said.

The Commission, which is working on proposals now, didn't reply to a request for comment.