Belgium's refusal could cost Ukraine an IMF loan

Politico writes about this, citing sources.

Ukraine is facing a large budget deficit and is in dire need of financing from the IMF. The fund is considering providing Kyiv with $8 billion over the next three years.

However, hopes of receiving financial support from the IMF depend on whether the EU can approve a €140 billion “reparations loan” to Ukraine using frozen Russian state assets, most of which are stored in Belgium.

A European Commission official and diplomats from three member states noted that reaching such an agreement would convince the IMF of Ukraine's financial viability in the coming years — a necessary condition for the Washington institution to provide funds to any state.

But Belgium opposed the loan last month at a meeting of EU leaders, citing financial and legal risks, reducing the chances of a deal being struck in time for a key IMF meeting scheduled for December.

As the US has significantly reduced its support for Ukraine, the IMF expects the EU to shoulder the main financial burden in the coming years.

Although the size of the IMF program for Ukraine is relatively small, its approval signals to investors that the country is financially stable and continuing its reforms.