Ukraine’s president told Europe’s leaders on Thursday that they must come to an agreement by the end of the year on a huge loan that would involve the frozen Russian funds. President Volodymyr Zelensky stated that Ukraine will be running out of funds within months.
Without an injection by spring, Ukraine will be forced to cut the production of drones, said Zelensky to the leaders gathering at Brussels. Ukraine is in a deficit ranging between 45-50 billion euros in the next year.
Belgium Holds Key to Unlocking Russian Money
There are 210 billion euros worth of assets that Russia has locked away in the EU. Most of these are held by an organisation called Euroclear, which is based in Belgium. But Belgium, as well as several other countries, has said “no” to Russia’s offer to use these as a “reparations loan” to Ukraine.
“If everything gets resolved and we share the risk with the rest of the EU, then we’ll jump into the abyss together with the rest of the Europeans and hope the parachute will hold us,” said Belgian Prime Minister Bart De Wever to the parliament on Thursday.
Russians have told leaders of the European Union not to touch their finances. Russians have even taken Euroclear to court in Moscow to try to recover the money. But Polish Prime Minister Donald Tusk said leaders of Europe have to “rise to this occasion”.
European Commission head Ursula von der Leyen said “we will not leave the summit without a solution,” and a European government official said they were “cautiously optimistic, not overly optimistic” about an agreement.
The EU Wants to Loan Ukraine 90 Billion Euros
The European Commission has proposed lending Ukraine approximately 90 billion euros over a period of two years out of 210 billion euros worth of Russian funds that have been frozen. This is roughly two-thirds of Ukraine’s 137 billion euro financial need to see it through 2026 and 2027.
Until now, the EU has paid the interest on the money that Ukraine had frozen, but not the money itself. Zelensky marked the move as “moral, fair, and legal, confirmed by the expertise of many, many professionals”.
Peace Talks Are Taking Place, No Agreement Yet
The US President, Donald Trump, reported that a peace agreement to end the conflict is imminent. The conflict started when Russia started the invasion of Ukraine and became full-scale in February 2022.
Officials from the US and Russia are scheduled to meet in Miami over the weekend for more peace talks, a White House official added. Russian diplomat Kirill Dmitriev is expected to hold talks with Trump representatives Steve Witkoff and Jared Kushner in Miami.
Ukrainian authorities are also going to the US. However, Russia has yet to respond to recent peace offers. The plans for any European-led multinational force for Ukraine with support from the US would not be acceptable, the Kremlin clarified.
This was stated by the Russian President Vladimir Putin on Wednesday. In the statement, he said that the continent is in “total degradation” and the Ukrainian side’s partners in the continent can be described as “European piglets” who would like to benefit from the fall of the Russian nation.
Several Countries Have Doubts Regarding the Plan
The law requires a minimum of 15 member states representing 65% of Europe’s population to be able to pass. Regardless of whatever happens, European Council President António Costa promised not to go behind Belgium’s back.
But Belgium is not the only country that has its doubts. Viktor Orban of Hungary stated that there would be no more EU funds going to help Ukraine. Robert Fico of Slovakia is also against the funds being used if the funds are going towards weapons rather than rebuilding Ukraine.
Italian Prime Minister Giorgia Meloni told Italian lawmakers, “But I will support this decision if the legal foundation is solid.” She also said, “If the legal foundation for this initiative were not solid, we would be granting Russia its first real victory since the outbreak of this conflict.” Malta, Bulgaria, and the Czech Republic are also worried about this plan.
There is a further alternative that could be put into play when the EU could borrow money on international markets with the guarantee of the EU budget. However, this would need a united front, and Hungary has already rejected this idea.
Belgium is also concerned about what might happen if a court were to tell it to turn back the funds to Russia. Some nations offered financial guarantees running into billions, but Belgium wants these figures to add up.
Officials from the European Commission think that the only means of Russia getting back the money it invested is by making a payment of reparations to Ukraine. At this stage, Ukraine would return the “reparations loan” to the European Union. “We must find a way to address Belgium’s concerns,” a Finnish representative stated. “We are on the same team as Belgium. We will work together to come to a solution so that all the risks are assessed as much as possible.”
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