EU, 90 billion euros loan for Ukraine - Plan aims to finance Kiev's defense for the next two years
European Union leaders have decided to borrow money to finance Ukraine's defense against Russia for the next two years, rather than using frozen Russian assets, a move that avoids divisions over an unprecedented plan to finance Kiev with Russian sovereign wealth funds.
“Today we adopted a decision to provide Ukraine with 90 billion euros,” EU summit chairman Antonio Costa said at a news conference after hours of talks between leaders in Brussels. “We will provide a loan backed by the European Union budget.”
The leaders also gave the European Commission a mandate to continue work on a so-called reparations loan based on frozen Russian assets, but this option proved unfeasible for the time being, mainly due to objections from Belgium, where most of these assets are held.
The idea of borrowing from the EU initially seemed impossible, as it requires unanimity and was opposed by Hungarian Prime Minister Viktor Orbán, known for his friendly stance towards Russia. However, Hungary, Slovakia and the Czech Republic agreed to allow the scheme to be implemented, as long as they were not financially affected.
EU leaders said Russian assets worth 210 billion euros within the EU would remain frozen until Moscow pays war reparations to Ukraine. If the Kremlin ever takes such a step, Ukraine could use the money to repay the loan.
Finding funds for Kiev was vital, as without EU financial assistance, Ukraine would run out of funds in the second quarter of next year and, most likely, would lose the war against Russia.
The decision followed hours of discussions among leaders over the technical details of an unprecedented loan, based on frozen Russian assets, that proved too complex and politically difficult to resolve at this stage.
The main difficulty was providing sufficient guarantees to Belgium, where 185 billion euros of total Russian assets in Europe are held, against the financial and legal risks that could arise from possible Russian retaliation for the release of these funds to Ukraine.
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