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EU expert on Norway acting as guarantor for Ukraine loan: "Brilliant idea"
Acting as guarantor for a giant loan to Ukraine would significantly enhance Norway’s standing within the EU, according to researcher Iver B. Neumann.
"It's a fantastic idea," Iver B. Neumann tells Norwegian news agency NTB. He is the director of the Fridtjof Nansen Institute.
Backed by two Norwegian economists, the proposal for Norway to guarantee a 140 billion euro loan for Ukraine has been gaining traction.
Fiercely debated
The proposal for a so-called reparations loan to Ukraine involves using Russian billions frozen in the Belgian financial institution Euroclear as collateral. In other words, Ukraine would receive an interest-free advance on what would, at least theoretically, be compensation from Russia once the war is over.
Ukraine’s government could run out of funds as early as the second quarter of next year.
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The matter is now being fiercely debated at all levels within the EU, and a final decision is expected at the EU summit in December. For now, Belgium has blocked the idea, fearing Russian retaliation.
Other EU countries, such as France, are reluctant to step in as guarantors because it would weaken the credit ratings of already heavily indebted nations.
Norway, however, boasts the world’s strongest credit rating thanks to its oil fund.
Boosting Norway's standing
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Neumann believes that acting as guarantor would strengthen Norway's position within the EU – especially at a time when criticism of Norway has grown due to its slow implementation of EU regulations.
"I definitely think it would," he says, adding that it would also be a gesture of solidarity.
"The EU is built on shared responsibility. Everyone contributes where they can. It's a collective project of solidarity," he says.
Neumann also highlights a third reason:
"Norway has profited enormously from the war in Ukraine. When Russia withdrew from the European gas market, Norway suddenly gained a huge market and massive revenues that, frankly, are a direct result of the war," he says.
Welcomed in Brussels
The idea has now reached the corridors of Brussels.
"We would certainly welcome an initiative from Norway to act as guarantor," says a senior EU diplomat.
According to NTB's information, there has not yet been any formal request from the European Commission.
But Neumann believes it’s only a matter of time.
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"If discussions are already underway about whether Norway should do this, it would be unimaginable for the EU not to seize the chance," he says.
"But the money is in European banks. Isn't it a bit odd for Norway to step in as guarantor?"
"Is Norway part of Europe? Do we share Europe’s outlook on the world? If the answer is yes, then this is Norway’s concern because it’s Europe’s concern," says Neumann.
"The war in Ukraine is, at its core, about a highly militarised Russia choosing to attack Europe and European values. We have a duty to defend Ukraine. It's our fight, plain and simple," he adds.
Stoltenberg in Brussels
On Wednesday and Thursday, Norwegian Finance Minister Jens Stoltenberg (Labour Party) is in Brussels for meetings with his Nordic colleagues and EU finance ministers.
As secretary general of NATO, Stoltenberg was deeply committed to ensuring Ukraine's ability to defend itself.
Now, a direct appeal is coming from Denmark:
'Use your astronomical oil fund to guarantee Europe's future. Europe needs you, Norway, and you cannot afford not to act,' editor-in-chief Carsten Jensen of the Danish newspaper Politiken wrote in an opinion piece in Norwegian newspaper Aftenposten on Monday.
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Translated by Alette Bjordal Gjellesvik
Read the Norwegian version of this article on forskning.no
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