European Union leaders have opted to secure a 90 billion euros ($145 billion Cdn) loan for Ukraine over the next two years to support its defense against Russia. This decision involves borrowing funds instead of utilizing frozen Russian assets, which would have required a controversial plan to finance Kyiv with Russian sovereign funds. Despite initial considerations for a reparations loan based on Russian immobilized assets, this alternative was deemed unfeasible at present, with Belgium’s opposition being a significant factor.
During a news conference following intensive discussions in Brussels, EU summit chair António Costa confirmed the approval of the 90 billion euros financial aid package for Ukraine. Italian Prime Minister Giorgia Meloni expressed satisfaction with the outcome, emphasizing the importance of a solution with solid legal and financial foundations.
The urgency to secure funding for Ukraine was paramount, as the country faced the risk of running out of financial resources by the second quarter of the following year, potentially leading to a loss in the conflict against Russia. Ukrainian President Volodymyr Zelenskyy expressed gratitude to the European Union for the vital support, emphasizing its significance in enhancing the country’s resilience.
Initially, the idea of EU borrowing faced challenges, particularly due to the need for unanimity and opposition from Hungary’s Prime Minister Viktor Orbán. However, Hungary, Slovakia, and the Czech Republic eventually agreed to proceed with the loan plan, ensuring it would not impose financial burdens on them. Orbán emphasized the avoidance of potential conflict with Russia through the use of Russian assets.
Slovakia’s Prime Minister Robert Fico expressed the country’s rejection of further financing for Ukraine’s military needs, citing a belief in seeking non-military resolutions to conflicts. The EU leaders confirmed that Russian assets, amounting to 210 billion euros ($339 billion Cdn), would remain frozen until Moscow fulfilled war reparations to Ukraine, allowing for the possibility of utilizing these funds for loan repayment.
The complexity of providing guarantees to Belgium, where a significant portion of Russian assets in Europe are held, posed challenges in releasing the funds to Ukraine. Belgian Prime Minister Bart De Wever highlighted the need for a pragmatic approach, ensuring unity and coherence within the EU.
In response to the EU’s decision to opt for joint borrowing against the EU budget, Russian President Vladimir Putin criticized the move, alleging it undermined trust in the eurozone and reflected poorly on the bloc’s reputation as a secure asset storage location.
EU leaders emphasized the necessity of finding a sustainable solution to support Ukraine’s financial needs and demonstrate unity in the face of external criticisms. Zelenskyy had urged the EU to utilize Russian assets for funding, portraying it as a morally justified decision that aligned with the region’s strategic interests.