Brussels: EU leaders failed to reach an agreement on using frozen Russian assets to support Ukraine, redirecting their focus towards providing Kyiv with a loan backed by the bloc's common budget.
According to Bangladesh Sangbad Sangstha, the European Union's 27 member states engaged in prolonged discussions during a summit, as they sought a viable solution to sustain their ally Ukraine amidst financial challenges.
The primary proposal involved utilizing approximately 200 billion euros of Russian central bank assets, currently frozen within the EU, to support a loan for Kyiv. However, this plan was shelved due to Belgium's demand for liability guarantees, which proved insurmountable for other member states. An EU official stated, "After lengthy discussions, it is clear that the reparations loans will require more work as leaders need more time to go through the details."
The focus of discussions shifted towards providing Ukraine with a loan backed by the EU's common budget, with a proposed amount of 90 billion euros over two years. Despite the shelving of the initial plan, diplomats emphasized that efforts to utilize the frozen assets would continue, though they appeared to be postponed for the foreseeable future.
The EU estimates that Ukraine requires an additional 135 billion euros over the next two years, with financial pressures expected to intensify by April. Ukraine's President Volodymyr Zelensky had advocated for the use of Russian assets, arguing that it was a moral, fair, and legal approach to counter Russian aggression and rebuild the damage caused by Russian attacks.
Although the EU's failure to approve the asset plan may disappoint Kyiv, securing financing through alternative means is still a relief. Zelensky had urged EU leaders to make a decision by the end of the year, emphasizing that financial stability could strengthen Ukraine's position in potential peace talks.
The rejection of the asset plan represented a setback for German Chancellor Friedrich Merz, a staunch advocate of the initiative, who warned that inaction could harm the EU's credibility.
Meanwhile, the EU's discussions were influenced by ongoing US efforts to negotiate an end to the war. Zelensky announced upcoming talks between Ukrainian and US delegations, seeking clarity on the security guarantees Washington could offer to prevent future invasions by Russia. In light of these developments, former US President Donald Trump reiterated his hope for Ukraine to expedite a peace agreement.