Tánaiste and Minister for Finance Simon Harris has said that the European Union is working on measures to immobilise Russian assets on "a longer-term basis".
Speaking ahead of his first meeting of Eurogroup ministers in Brussels this afternoon, Mr Harris said Ukraine would be a big focus of today's discussions and at a meeting tomorrow of EU finance ministers.
The Tánaiste's two-day visit, includes meetings of the Economic and Financial Affairs Council (ECOFIN) and the Eurogroup.
"I welcome the fact that today or tomorrow, this week, we will take measures to immobilise, on a longer-term basis Russian assets. I think that's an appropriate thing to do," said Mr Harris.
The Tánaiste said that EU finance ministers will this evening discuss a reparations loan mechanism for Ukraine.
"It's absolutely important that we work out, as a European Union, a mechanism as to how we're going to support Ukraine," said Mr Harris.
"That mechanism has to do two things. It has to fundamentally support Ukraine for here and now, because the funding need is urgent. But secondly, it has to also make sure that Russia pays."
A European Commission plan envisages that EU member states would issue a reparations loan of €165 billion to Ukraine from frozen Russian central bank assets, held at Euroclear, a Belgian-based securities depository.
Those funds have been held at Euroclear since the start of Russia’s full-scale invasion of Ukraine in February 2022.
Belgium has opposed the Commission’s plan to seize the funds on the basis that it might be held solely liable at a future date to repay the Russian funds.
Instead, the Belgian government wants the legal and financial risks of seizing Russian assets to fund Ukraine to be shared by all EU member states.
Under the Commission’s plan, Euroclear would lend a sum equivalent to the value of the frozen Russian assets as a zero-interest reparations loan to Ukraine.
That loan would be used to cover Ukraine’s budgetary and defence needs for the next two years and would be guaranteed by EU member states.
It would be comprised of about €140bn held by Euroclear and an additional €25bn in frozen Russian assets currently held across the EU.
Speaking to reporters in Brussels, Mr Harris said that Ireland’s contribution to the loan guarantee mechanism would amount to between 2% and 2.15% of the total value of the loan.
If the reparation loan ends up being valued at €165bn (a conservative estimate), then that would mean Ireland would guarantee about €3.3bn of the loan's value.
"This is a loan system where really the European Union acts in many ways, as a backstop, as a guarantee. It underwrites the risk, because it is important to get support to Ukraine in the here and now," said Mr Harris.
A survey commissioned earlier this year by Ukraine's government, the World Bank, the European Commission and the United Nations put the cost of reconstructing Ukraine in excess of €500bn.
Ukraine would be liable to repay the loan if Russia stops its invasion and starts repaying reparations to Kyiv.
The Kremlin has previously said that it would regard the use of its assets to fund Ukraine as theft.
Watch: Europe will take measures in coming days to immobilise Russian assets, says Harris
Earlier, the Tánaiste began his two-day programme with a bilateral meeting with EU Commissioner Valdis Dombrovskis, who has responsibility for the Economy and Productivity.
He was also due to meet the President of the European Investment Bank (EIB), Nadia Calvino, to discuss key objectives set out in Ireland's National Development Plan (NDP), including large scale strategic infrastructure projects.
The Tánaiste and other Eurozone finance ministers will attend the December meeting of the Eurogroup, where ministers will elect a new Eurogroup President by secret ballot.
Belgium's Vincent Van Peteghem and Greece's Kyriakos Pierrakakis are running to replace Paschal Donohoe - who resigned last month to take up a post with the World Bank.
Mr Pierrakakis has been in charge of Greece's finances since March, after earlier stints as minister of digital governance and education.
Mr Van Peteghem, a staunch advocate for fiscal consolidation in a country with one of the worst debt ratios in the eurozone, has looked after Belgium's financial matters since 2020, serving in two successive coalition governments.
The Eurogroup will also officially launch the nomination process for the post of European Central Bank (ECB) vice-president.
Spaniard Luis de Guindos, the incumbent, is due to end his term at the Frankfurt-based institution in May next year.
The Tánaiste will also attend the European Stability Mechanism (ESM) Board of Governors Meeting, while tonight he will attend an informal dinner of ECOFIN ministers, which will focus on the European Commission's recent reparations loan proposal for Ukraine.
The main item on the agenda for the ECOFIN meeting tomorrow will be a discussion on the flagship EU Financial Services Policy, the Savings and Investment Union which is due to be a major part of Ireland’s EU Presidency next year.
Additional reporting AFP
