ECB's Lagarde 'fully confident' EU will agree reparation loan plan for Ukraine

LONDON, Dec 18 (Reuters) - European Central Bank President Christine Lagarde said on Thursday she was "fully confident" European Union leaders would agree a way to support Ukraine given the vital importance of the issue.

Asked during a news conference whether she thought EU leaders could agree a reparation loan plan for Ukraine, Lagarde said: "The importance of the matter, given what is at stake, I am fully confident that they (EU leaders) will find a solution".

According to a draft document seen by Reuters, which could still change, the EU will ask the bloc's institutions to urgently adopt instruments to establish a reparations loan backed by cash balances linked to Russia's frozen assets.

Lagarde again stressed that the EU's plan should not breach international legal norms protecting sovereign assets, but said she expected a solution to be struck.

"It might be in the usual European way, you know, going in circles and being time-consuming and giving rise to a lot of speculation as to whether it will work ... But I'm confident that we will find a solution," Lagarde said.

"Because it's too important".

Though Lagarde has often voiced the ECB's views on the issue over the last 18 months, she said the decision on how to proceed was ultimately a political one.

"Our job" as a central bank, she added, "is to determine that whatever choice is made by the (EU) leaders is going to respect the (EU) Treaty, is going to respect the international rule of law, and will not damage financial stability."

"Beyond that, it's something that is outside of our remit."

(Reporting by Marc Jones; Editing by Sharon Singleton and Mark Potter)