EU leaders delay decision on using frozen Russian funds to aid Ukraine

Following Belgium’s objections, leaders from across the European Union decided to support Ukraine in its fight against Russia’s invasion, but they decided against going along with a plan that would use frozen Russian assets instead.

On Thursday, EU leaders met in Brussels to discuss Ukraine’s “pressing financial needs” for the coming two years. Numerous leaders hoped that the discussions would pave the way for a so-called “reparation loan” that would finance a 140 billion euro ($163.3 billion) loan for Ukraine using Russian assets that had been frozen by the Belgian financial institution Euroclear.

After Russia launched its full-scale invasion of Ukraine in 2022, the EU frozen about 200 billion euros ($232.4 billion) of its central bank assets. The European Commission, the executive branch of the EU, has proposed a complex financial maneuver that involves the EU borrowing mature funds from Euroclear in order to use the assets to fund Ukraine’s war effort.

The money would then be repaid with a loan to Ukraine under the condition that only Russia would make the necessary repairs.

The 27 member states of the EU would have to guarantee that the scheme would be “fully guaranteed,” meaning they would have to pay Euroclear back if they ultimately decided that Russia could reclaim the assets without making any reparations. The legality of Euroclear was raised on Thursday by Belgian Prime Minister Bart De Wever, who had earlier opposed this plan.

Russia has referred to the idea as an unlawful seizure of property and has issued a warning about retaliation.

Following Thursday’s political wrangling, a text that was revised from previous drafts to include “options for financial support based on an assessment of Ukraine’s financing needs was approved by all the leaders, with the exception of Hungary’s Prime Minister Viktor Orban. At their upcoming summit in December, European leaders will be given those options.

The declaration further stated that “Russia’s assets and assets should remain immobilized until Russia stops its aggression against Ukraine and makes up for the harm it caused.”

Prior to the summit, Ukrainian President Volodymyr Zelenskyy had urged the loan plan to be approved quickly.

He told the leaders of the&nbsp, EU&nbsp, saying “anyone who delays the decision to use fully the resources of&nbsp, frozen&nbsp, Russian&nbsp, or assets,” that “does not only impede our defense, but also slows down the&nbsp, EU’s own progress,” adding that Kyiv&nbsp would use a significant portion of the funds to purchase&nbsp

On Thursday, the EU also ratified a new round of severe sanctions against Russian energy exports and an import ban for liquefied natural gas.

The action came after Donald Trump announced on Wednesday that sanctions would apply to Russia’s two biggest oil companies.