Norway Says Won’t Be Sole Guarantor for EU Loan to Ukraine

Norway on Wednesday ruled out being the sole guarantor of a potential EU loan to Ukraine that would use frozen Russian assets, but might still contribute depending on the solution Brussels chooses.

The European Commission is considering using part of Russia’s assets frozen after its invasion of Ukraine to provide Kyiv with a €140 billion ($162 billion) interest-free loan to finance its budgetary and military support over the next two years.

Ukraine would have to repay the loan only if Russia were to pay it war reparations.

But the plan has faced opposition from Belgium, home to the international deposit organization Euroclear, which holds the bulk of the frozen assets, because of fears of Russian repercussions.

Two Norwegian economists have suggested their country should step in as a guarantor for the loan even though it is not an EU member, saying that Norway, Western Europe’s biggest oil and gas producer, made an extra €109 billion from soaring gas prices after Russia’s invasion.

The idea has been welcomed by some Norwegian and foreign politicians and diplomats.

“It would be wrong to rule out anything before we’ve even seen the proposal, but some ideas have circulated under which Norway would guarantee the entire amount... That is out of the question,” Finance Minister Jens Stoltenberg said.

“But whether we could contribute, in one way or another, remains to be seen depending on what the EU proposes,” he told Norwegian broadcaster NRK from Brussels, where he was due to meet with European counterparts.

Other Topics of Interest

Ukraine’s Defense Minister Orders Lie Detector Tests for Army Contractors

Defense Minister Mykhailo Fedorov introduced mandatory polygraph tests for ministry officials and contractors; those who refused or failed were fired. He shifted defense procurement to competitive tenders, saving 16-20% on purchases (over $100M on one artillery shells contract), despite strong resistance from corrupt insiders and lobbyists. Fedorov is also auditing combat brigades and increasing salaries for front-line troops.

The issue will be discussed at a European Council meeting in December.

‘Out of the question’ 

Norway, a NATO member that shares a border with Russia in the Arctic, is not a member of the European Union but is closely aligned with Brussels on issues relating to the war in Ukraine.

In an op-ed in October, the economists Havard Halland and Knut Anton Mork called Norway a “war profiteer.”

Thanks to its AAA credit rating – the highest awarded by rating agencies – and a sovereign wealth fund valued at around $2.1 trillion, Norway “could singlehandedly take on the contingent liability associated with fresh Ukrainian debt, and without a dent to its credit rating,” they wrote.

“It is obviously out of the question for Norway to use its pension fund as a guarantee for mechanisms still under discussion in various bodies and which have yet to be finalized,” Prime Minister Jonas Gahr Store told parliament on Wednesday.

Store said it was important to not set a precedent on the Russian assets that could one day be used against Norwegian interests.

“We all know very well that the oil fund is invested everywhere in the world, and we want this money to remain safe,” he later told broadcaster TV2, referring to the sovereign wealth fund.

He also said he preferred to see Norway continue to provide aid to Ukraine through direct financial donations.

Oslo has earmarked civil and military aid of more than 275 billion kroner ($27.4 billion) to Kyiv over the 2023-30 period.