The leaders of the European Union They agreed this Friday give a loan to Ukraine worth 90 billion euroswhich they will finance by issuing joint debt using the community budget as collateral, to meet kyiv’s financial needs, after the plan to make use of Russian assets immobilized has failed.
“We have approved the decision of provide 90 billion euros to Ukraine for the next two years. As a matter of urgency, we will grant a loan backed by the budget of the European Union”, announced the president of the European Council, Antonio Costaaround three thirty in the morning. “Ukraine will only repay this loan once Russia pays repairs,” he added.
After a very long negotiation on the margins of the summit, The European Council has opted for the option that was ruled out. After confirming that the so-called ‘reparations loan’ for Ukraine “will require more work”, according to community sources, have agreed to issue joint debt to ensure that Ukraine’s economic needs are met.
The same sources pointed out that Leaders “need more time to analyze the details”. The translation is that the conditions required by Belgium to approve the use of the assets, such as the guarantees being unlimited, were unacceptable to the majority. At the end of the meeting, the Twenty-Seven ruled it out.
The leaders committed last October to take care of Ukraine’s financial needs for the next two years. The European Commission estimates that they amount to about 136,000 million, adding military and budgetary assistance. With this Friday’s decision, the Twenty-Seven take charge of a third, trusting that the rest of the allies will provide the rest.
A discarded option
Brussels had put two options on the leaders’ table. The first, initially discarded, goes through make use of the community budget to issue debt and then give a loan to kyiv. This option was initially ruled out because requires unanimity which seemed impossible until the wee hours of the morning, when the agreement was forged.
Upon arrival at the summit, Hungarian Prime Minister Viktor Orbán had ruled out providing any type of aid to Ukraine. Orbán alleged that this It only contributed to continuing the war. With Hungary’s opposition, using the budget was impossible. Other countries like Slovakia and the Czech Republic had also expressed reluctance, particularly in relation to military aid.
The way that the EU has found to avoid the blockade is through a unanimous decision to use the community budget as collateral to issue debt. But the loan to Ukraine will be given using a legal mechanism, the enhanced cooperationwhich does not require the participation of all countries. In this way, Hungary, Slovakia or the Czech Republic do not technically participate.
No agreement to use the assets
The other option was make use of the around 200,000 million euros on Russian assets tied up with sanctions. An option that a majority supported but that Belgium rejected. A good part of these assets are a poder de Euroclear, an international securities depository. The Belgian government considered the risk for his disproportionate country.
“We are a reliable partner and we are willing to make sacrifices”said andThe Belgian Prime Minister, Bart de Wever, to his arrival at the summit, “there can be no flexibility in matters that threaten the financial security of Euroclear and Belgium. The financial and legal guarantees that the Belgian demanded have proven unaffordable for the rest of the European partners, who have opted for plan B.
At the same time, “the Union reserves the right to make use of immobilized assets to repay this loan,” said Costa. The Commission will continue working on the possibility of using this option in the future. In the eyes of Von der Leyen, The important thing is that the assets remain frozensomething that made possible a government decision last week.
“Russian assets frozen They will remain blocked until Russia pays reparations to Ukraine,” the German Chancellor Friedrich Merz. “And we make it very clear: if Russia does not pay reparations, we will use, in full accordance with international law, Russian assets tied up to repay the loan“, stressed Merz, one of the biggest defenders of the proposal.
The president of Ukraine, Volodymyr Zelensky, who also participated in the summit, asked the leaders for a decision that would strengthen kyiv in the peace negotiations and send a message to Moscow that “he is guilty and must pay reparations.” That decision has not been possible, but the aid will keep kyiv afloat.
An urgent matter
The withdrawal of the United States, which has practically turned off the tap of military and financial aid to Ukraine, added to the need to keep kyiv afloat during peace negotiations with Russia, and the feeling of fatigue among European citizens They have increased the pressure on the block. “We have to make a very simple decision; We have to choose between money today or blood tomorrow“warned Polish Prime Minister Donald Tusk.
Upon arrival at the summit, the president Antonio Costa assured that the leaders would not leave the meeting without an agreement. And so it has been. But the decision is very different from what was expected: a loan using the community budget, that guarantees the financial stability that Ukraine and Europe need. “The message we send to Russia today is very clear. First, they have not achieved their goals. Second, Europe stands with Ukrainetoday, tomorrow and as long as necessary,” said Costa.
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