The developments for it are moving at a very fast pace, as the teams of Ukraine and Ukraine sat down at the table again in Berlin for a second day, while they also exchange messages about the frozen Russian funds and appear to be taking battle positions.
With the NATO issue out of the way, discussions focused on the territorial
Reports from Berlin of the talks point to on-the-ground talks between Ukraine and the US, with the Ukrainian side informing Trump’s envoys Steve Witkoff and Jared Kushner that it is prepared to accept a pledge not to join NATO, while seeking security guarantees similar to those in Article 5 of the Alliance.
According to what the international media reports, the critical issues discussed were the territory and the future of Eastern Ukraine. Regarding this, as it has become known, the American negotiators were still asking Ukraine to leave the part of the Donbass region under the control of the forces of Kiev. That is, Washington is pushing to hand over to Moscow territories that Russian forces have not managed to capture after nearly four years of war since the February 2022 invasion.
According to what a Ukrainian official told AFP: “Putin wants territories. The Americans say Ukraine “must withdraw”, which Kiev denies. “It’s quite strange that the Americans are adopting the Russian position on this issue.”
Mini summit after the negotiations
After the end of the meeting with the two negotiating teams as has been announced there will be an expanded meeting as a group of European leaders will meet with the president of Ukraine Volodymyr Zelensky. It will be attended by UK Prime Minister Keir Starmer, Danish Prime Minister Mette Frederiksen, Finnish President Alexander Stubb, Norwegian Prime Minister Jonas Gaard Stere, Dutch Prime Minister Dick Schoff, Polish Prime Minister Donald Tusk and Swedish Prime Minister Ulf Christerson, as well as EU and NATO leaders.
Today’s talks with the US and the mini-summit in Berlin are taking place alongside the Foreign Affairs Council in Brussels, but also just days before the crucial European Council meeting in Brussels later in the week, where a decision will be taken on the proposal to use frozen Russian funds to finance Ukraine through a reparations loan.
“Knives are out” on the topic of Russian frozen funds
Regarding this last issue, the famous loan that the EU wants to give to Ukraine from frozen Russian funds, most of which are in Belgium and the central securities depository Euroclear, there are movements from all sides. More specifically, after Friday’s vote by which Russian funds were frozen indefinitely, the issue of their use and the decision on it becomes a really pressing question for the EU and will be the main topic of the European Council meeting during the week. Already ahead of the meeting, the governments of the member countries have begun to split into two blocs.
On the one hand is Belgium which is opposed to giving the funds from Euroclear which has its seat in the country, in Ukraine, together with Italy, Bulgaria, Malta, the Czech Republic, but also Slovakia and Hungary (for different reasons), and on the other for the time being everyone else. The stake is divisive for the EU because it is related, among other things, to the very functions of the Union, since the decision on the indefinite freeze was taken in parts so that there would be no countries with the right of veto, but any decision would be taken by a qualified majority vote and not by unanimity. In practice, this means that the decision to be taken should be supported by 55% of the member states of the 27 member countries, representing at the same time 65% of the EU population.
The EU is divided
In this context, despite the fact that the countries opposed to the granting of a loan with these funds to Ukraine continue to be a minority, the head of European diplomacy, Kaya Kalas, argued, coming to the Council of Foreign Affairs, that it will not be easy to proceed with the plan to utilize the frozen Russian assets to finance Ukraine without the consent of Belgium. Callas came close to implying that Belgium practically has a veto over the decision on whether to use €210 billion in frozen Russian assets to support Ukraine, despite the fact that the process does not provide for a veto.
As he characteristically stated: “Of course, there is the qualified majority decision, but without Belgium, I think it would become more and more… it would not be easy at all, because they own the majority of the assets. And I think it’s important that he be with us in whatever we do.”
It is noted that Belgium, with the support of Bulgaria, Italy and Malta, has called on the other member states to seriously consider an alternative financing plan for Ukraine: joint EU borrowing guaranteed by unallocated funds from the European budget.
Unlike the idea of war reparations loans, joint borrowing requires unanimity, and Hungary has already made it clear that it will not agree, while heavily indebted and deficit countries such as France, for example, will be opposed.
For his part, the Minister of Foreign Affairs of France, Jean-Noel Barot, argued that: “The Europeans (including Friday’s resolution) have decided to take their destiny into their own hands.” According to him, this is a very important decision, because from 2022 until today, the EU countries had to unanimously decide every six months on the renewal of the freezing of Russian assets, and now this is not necessary. He argued that by Friday it would be possible to reach a decision that would allow Ukraine to meet its financial needs for the next two years and at the same time put it in a position of strength until negotiations lead to peace. “We see that Ukraine has shown its will to move forward and accelerate towards peace,” he added.
What Moscow says about negotiations and frozen funds
Responding to the above, Russia through Kremlin spokesman Dmitry Peskov argued that with regard to Ukraine’s non-joining NATO, this issue “is one of the cornerstones and of course subject to a special discussion” and that the Russian side expects to be informed later about the discussions in Berlin, while regarding the issue of frozen Russian funds, the answer came through the legal appeal of the central bank of Russia which is seeking $230 billion in damages from Euroclear.
Experts say the Moscow Commercial Court is expected to issue a swift ruling against Euroclear, the Belgium-based depository that holds most of the assets. The court announced it had accepted the central bank’s appeal on December 12, seeking 18.2 trillion rubles – the full value of Russia’s frozen state assets. If the central bank wins, it could seek enforcement of the ruling against Euroclear assets in other jurisdictions, notably jurisdictions considered “friendly” by Russia.
For its part, however, the German government through its representative officially stated that the lawsuit filed by the central bank of Russia, in which it requests compensation of 230 billion dollars from the Belgium-based Euroclear, cannot affect the plans of the European Union to use the frozen Russian assets to support Ukraine.
New sanctions from the EU
With regard to the economic dimension of the war in Ukraine, which includes the issue of frozen funds, the Foreign Ministers of the member countries announced that they adopted a new package of sanctions targeting companies and natural persons related to or playing a key role in the famous “shadow fleet” of Russian tankers transporting Russian oil. More specifically, the sanctions target nine individuals – businessmen linked to Russian oil companies Rosneft and Lukoil, as well as shipping companies that own and manage tankers.
The sanctions also cover 14 individuals and entities under the EU hybrid threat sanctions regime.
Among the people placed on the sanctions list are Canadian-Pakistani oil trader Murtaza Lakhani, CEO of trading company Mercantile & Maritime, Valery Kildiyarov, financial director of Litasco Middle East DMCC, a subsidiary of Lukoil, as well as three people — Anar Madatli, Talat Safarov and Etibar Eyub — because of their ties to trading company Coral Energy, which was renamed 2Rivers Group.
The list now includes French-Russian ex-military Xavier Moreau, who is considered a Kremlin propagandist, as well as American-Russian John Mark Dugan, who has been living in Russia for a decade and is accused of participating in pro-Russian digital intelligence operations aimed at influencing elections, defaming political figures and manipulating public discourse in Western countries.
