29 Apr 2022 12:45

Ukraine planning to draw Eur200 mln loan from Italy, Eur150 mln loan from Germany - finance minister

KYIV. April 29 (Interfax-Ukraine) - Italian Economy and Finance Minister Daniele Franco has reaffirmed the Italian government's intention to give a Eur200 million loan to Ukraine, Ukrainian Finance Minister Serhiy Marchenko said in an interview with the Italian newspaper Corriere della Sera, following talks on the sidelines of the Spring Meetings of the International Monetary Fund and the World Bank in Washington DC.

"We are negotiating preferential loans with a 1% annual interest and 15-year maturity. To my mind, other countries can also offer us loans on such preferential terms. Obviously, such financing could help us," Marchenko said.

He thanked Italy for being the first to provide Ukraine with a Eur110 million grant soon after February 24.

Preparations have begun to arrange a Eur150 million loan from Germany; the new loan will help maintain the macro-financial stability of Ukraine, Marchenko said.

Germany gave a Eur150 million loan last week to support small and medium businesses as agreed in March 2020, he said.

"We were expecting Germany to offer financial assistance comparable with the one provided to us by the United Kingdom, Canada or the United States," Marchenko said.

Kyiv pins great hopes on the financing through the IMF administered account, Mrachenko said. "We are asking partner states to consider the possible redistribution of 10% of the SDRs they received from the IMF in August 2021 and did not put to use. We are mostly focused on EU nations. However, it would be necessary to agree on specific regulations with the European Union and the European Central Bank," he said.

The EU will consider the option, as the European Central Bank might impose certain restrictions on the use of SDRs.

"I think, however, that countries will try to find a legal solution with the European Central Bank in order to make SDRs accessible to Ukraine. The IMF is working with other countries to find out how the allotted SDR quotas could be used to support Ukraine," Marchenko said.

Ukrainian President Volodymyr Zelensky said at the Spring Meetings of the IMF and the World Bank that Ukraine needed monthly support of up to $7 billion, while Ukrainian Prime Minister Denys Shmyhal noted they needed up to $5 billion a month to compensate for the budget deficit.

Shmyhal announced the establishment of United24 Fund to support restorations and estimated its needs at $600 billion. According to the National Bank of Ukraine, international support to Ukraine has topped $4 billion since February 24.