“EU countries are working on a “plan B” for financing Ukraine in case the plan with Russian assets fails – PoliticoEU countries are working on a “plan B” in case they cannot reach an agreement on seizing frozen Russian assets to finance Ukraine.
”, — write: unn.ua
DetailsAt a summit a month ago, European Union leaders hoped to agree on a proposal to use immobilized Russian assets to provide Ukraine with a “reparations loan” of 140 billion euros, but the idea met with strong opposition from Bart De Wever, the prime minister of Belgium, where the money is held. Now, amid intensified peace talks, the issue has regained relevance.
“If we don’t do anything, others will do it before us,” said one EU official.
European officials suggested that US President Donald Trump’s new peace campaign could help strengthen support for a plan to use frozen funds for a “reparations loan.” The money would only be repayable to Moscow in the unlikely future scenario where Russia agrees to pay war damages under the plan.
EU diplomats expect European Commission President Ursula von der Leyen to instruct her officials to present a draft legal text on the reparations loan within days, as momentum for finding a solution grows.
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But despite intense negotiations between Belgium and the European Commission in recent weeks, De Wever still has concerns about legal obligations and the risk of retaliation from Moscow if Russian funds are used for the loan, the publication writes.
So policy specialists in Brussels are now looking for ways to help Ukraine if the “reparations loan” proposal is not agreed upon in time for EU leaders to sign it at the December 18 summit.
One option gaining traction is a “bridge” loan, financed by EU borrowing, to keep Ukraine afloat through the first months of 2026.
This, it is stated, would allow more time to set up a full “reparations loan” using Russian assets in a way that Belgium could accept, to provide a long-term solution.
Two diplomats said Ukraine could be asked to repay the initial EU “bridge” loan after receiving funding from the long-term “reparations loan.”
EU ambassadors, it is noted, discussed options with the European Commission at a meeting in Brussels on Tuesday. According to one official briefed on the discussions, countries such as France, Germany, the Netherlands, Lithuania, and Luxembourg urged the European Commission to continue working on proposals for financing Ukraine.
The prospect of a transitional financing model was raised on November 4 by EU Economy Commissioner Valdis Dombrovskis, who noted: “The longer we have delays now, the more difficult it will become.”
The European Commission is reportedly acutely aware of the need to find a solution urgently.
On Tuesday, French President Emmanuel Macron said that EU allies would finalize a solution “in the coming days” that would “ensure financing” and “provide visibility to Ukraine.”
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In the long term, the “reparations loan” is widely seen as the only viable strategy. There is no desire among EU member states to use their own national budgets to send cash grants to Ukraine. Many are already struggling with budget deficits and high borrowing costs. Therefore, convincing the Belgians to eventually come on board is considered a key task, the publication writes.
“We hope we can resolve their hesitation,” said one EU diplomat. “We really don’t see any other possible option than a reparations loan.”
One idea would be to “combine the reparations loan option with one of the other options,” the diplomat said. But this “should not take too long, because, of course, there is a sense of urgency now, and it is pressing,” he added.
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There are still challenges in creating a “bridge” loan using joint EU borrowing, which some commentators call “Eurobonds,” although others dislike the term.
Perhaps, the publication writes, the biggest obstacle will be that such EU borrowing would require unanimous support from the bloc’s 27 member states, and Hungary has long opposed new measures to help finance Ukraine’s war effort.
However, it is possible that using a “bridge” loan as one intended for Ukraine’s reconstruction would help, the publication writes.
Another factor, it is argued, will be renewed momentum for a peace agreement. Draft peace proposals, the publication writes, refer to using frozen assets to finance Ukraine’s reconstruction. Last week, European officials reacted with indignation to an idea contained in an initial American draft that the US would profit from the use of these assets.
EU leaders now hope they have convinced the Trump team that they should have the final say on what happens to these assets, as well as on the timing of lifting European sanctions against Russia and on Ukraine’s path to EU membership, diplomats said.
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