Ukrainian President Volodymyr Zelensky is keen for further financial support from European allies (Tetiana DZHAFAROVA)
Norway has grown vastly richer after overtaking Russia as Europe’s main gas supplier following the invasion of Ukraine, sparking calls in Oslo for the Scandinavian nation to use its colossal sovereign wealth fund to help Kyiv.
With some in Norway saying their country’s windfall makes it a “war profiteer”, several Norwegian political parties, including allies of the Labour government, are pushing for Oslo to help lift a main obstacle blocking Europe from using frozen Russian assets to help Ukraine financially.
Western nations have frozen billions in Russian assets over Moscow’s 2022 invasion of Ukraine, including approximately 210 billion euros ($243 billion) held in Europe.
Ukraine’s European allies have been using interest from those funds to support Kyiv, but are keen to go further by tapping the funds themselves — a proposal some warn carries huge risks, including spooking other foreign nations into pulling their money from the European Union.
That is where Norway comes in.
“It is absolutely essential for Europe’s security that Russia does not win its illegal war of aggression,” the head of Norway’s small opposition Liberal Party, Guri Melby, told AFP.
“Norway has the financial means to guarantee a loan that would enable Ukraine to better defend itself against Russia, and I think we should do it,” she said.
– Backing for mega-loan –
The plan goes like this.
At a time when many EU member states have strained public finances, the European Commission plans to use part of the frozen Russian assets to give Ukraine a 140-billion-euro loan, interest free, to finance its budgetary and military support over the next two years.
But Belgium, home to the international deposit organisation Euroclear, which holds the bulk of the frozen assets, has demanded strict guarantees from other EU countries in order to share the risks in the event, for example, that Russia were to regain possession of its assets.
Some heavily indebted countries, such as France, would have a hard time agreeing to such a demand.
Arguing that Norway, Western Europe’s biggest oil and gas producer, made an extra 109 billion euros from soaring gas prices after Russia’s invasion, two Norwegian economists have suggested their country should step up even though it is not an EU member.
“By hoarding these profits, Norway’s government turned the country into a war profiteer,” the duo, Havard Halland and Knut Anton Mork, wrote in an op-ed last month.
Thanks to its AAA credit rating — the highest awarded by rating agencies — and its sovereign wealth fund, the world’s biggest, 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 said.