EU Agrees to €90bn Loan for Ukraine Without Utilizing Russian Assets
European Union leaders have reached a crucial agreement to provide Ukraine with a €90 billion ($105 billion; £79 billion) loan over the next two years. This decision comes amid a failure to secure frozen Russian assets for funding.
– Urgent Financial Support for Ukraine
The loan is critical as Ukraine was projected to run out of cash by spring. European Council President António Costa emphasized that the repayment would only occur once Russia compensates for its invasions and war efforts. “We committed, we delivered,” remarked Costa. Ukrainian Prime Minister Yuliya Svyrydenko hailed the agreement as “a decisive step for economic resilience.”
– Rejection of Russian Asset Utilization
Attempts to use approximately €210 billion of frozen Russian assets within the EU, primarily based in Belgium, were unsuccessful due to concerns about potential Russian retaliation. The frozen funds are managed by the Brussels-based clearinghouse Euroclear, which is currently facing legal disputes from Moscow. President Vladimir Putin accused EU leaders of attempting robbery and referred to the inability to leverage these assets as a fatal blow.
– A Complex Negotiation Process
After nearly 17 hours of negotiations, Belgian Prime Minister Bart De Wever declared the agreement a victory for Ukraine, a victory for financial stability, and a victory for the EU. The leaders managed to avoid rising tensions and divisions within the union.
– Estimated Financial Needs for Ukraine
Ukraine requires about €137 billion over the next two years to sustain both its military operations and public services. The newly sanctioned €90 billion will account for approximately two-thirds of this requirement, funded through EU capital markets and backed by budget headroom from member states.
– Mixed Reactions to the Deal
Ukrainian President Volodymyr Zelensky expressed deep gratitude towards European leaders for their “significant support that truly strengthens our resilience.” However, Germany’s Friedrich Merz had strongly advocated for utilizing Russian assets, viewing the decision to rely on EU budget borrowing as a setback. Despite this, Merz maintained that the loan sends a clear message to Putin.
Hungary’s Viktor Orban and Slovakia’s Robert Fico opposed the financial commitment, expressing concern that the loan would prolong the conflict. Orban stated, “It looks like a loan, but the Ukrainians will never be able to pay it back; it is basically losing money.” Fico cautioned against additional funding for Ukraine’s defense efforts, while Czech Prime Minister Andrej Babis agreed to the summit’s conclusions only on the condition that his country wouldn’t guarantee the loan.
– Ongoing International Negotiations
As the EU navigates this financial landscape, U.S. discussions with Russia are ongoing, led by President Donald Trump, who indicated that a solution may be nearer than ever. Key Russian negotiator Kirill Dmitriev is expected to meet with U.S. representatives in Miami. European allies have proposed a multinational force to provide robust security guarantees to Ukraine, amid criticism from Putin regarding the European diplomatic approach.
– Looking Ahead
Polish Prime Minister Donald Tusk asserted that the EU’s financial commitment strengthens Ukraine’s negotiating position. “There is a chance that these negotiations will be about peace on terms that can be accepted by all parties involved,” he stated. French President Emmanuel Macron added that Europe should explore pathways to re-engage in meaningful discussions with Putin in the coming weeks.
In conclusion, the EU’s commitment to a €90 billion loan for Ukraine—despite the failed bid to use Russian frozen assets—marks a pivotal moment in the ongoing conflict. This financial support signifies solidarity with Ukraine, promoting its resilience and keeping the dialogue open for future peace negotiations.