EU backs Ukraine's funding needs, delays plan to use frozen Russian assets

EU leaders agree to support Ukraine's financial needs but delay €140 billion loan using frozen Russian assets, as Belgium seeks legal guarantees before backing the plan

European Union leaders on Thursday agreed to support Ukraine’s urgent financial needs over the next two years but stopped short of approving a plan to use frozen Russian assets to fund a massive loan for Kyiv. Belgium’s concerns played a key role in the decision, news agency Reuters reported. 

The proposed plan involved using assets held by Belgian financial institution Euroclear to fund a €140 billion ($163.27 billion) loan aimed at strengthening Ukraine in its fight against Russia. Many EU governments had hoped the summit would endorse the concept and instruct the European Commission to draft a formal legal proposal. 

However, the leaders’ final statement, backed by all except Hungary’s Prime Minister Viktor Orban, was softened. It now asks the Commission to explore “options for financial support based on an assessment of Ukraine’s financing needs”. 

The declaration also stated: “Russia’s assets should remain immobilised until Russia ceases its war of aggression against Ukraine and compensates it for the damage caused by its war.” EU officials aim to reach a decision in December.

  European Commission President Ursula von der Leyen acknowledged the complexity of the matter. “This is a topic that is certainly not trivial. It’s very complex,” she said. “It was also very clear that there are points to be clarified.” 

   

Zelenskyy urges quick EU decision

Ukrainian President Volodymyr Zelenskyy, attending the summit as a guest, pressed EU leaders to approve the loan plan promptly. 

“Anyone who delays the decision on the full use of frozen Russian assets is not only limiting our defence, but also slowing down the EU's own progress,” he said. Zelenskyy added that Kyiv would use much of the funding to purchase European weapons, enhance air defence, upgrade the air fleet and strengthen frontline positions. “That means saving lives,” he said.     

 

Belgium seeks guarantees before backing loan

Belgian Prime Minister Bart De Wever said that he would only support the loan if there were clear legal assurances and shared risk among EU countries. 

“If demands are met, we can go forward. If not, I will do everything in my power at the European level, also at the national level, politically and legally to stop this decision,” De Wever said.

  He called on EU members to share the costs of potential legal challenges from Russia and suggested that frozen Russian assets held by other countries also be included in the plan. De Wever insisted that the legality of the so-called “reparation loan” remains uncertain and must be resolved before moving forward.

  Meanwhile, Russia has labelled the proposal an illegal seizure of property and threatened retaliation.

 

  EU sanctions 45 firms

The EU imposed sanctions on 45 entities, including three India-based companies, for alleged ties to Russia’s military. The sanctions are part of the EU’s 19th package aimed at exerting economic pressure on Russia over its invasion of Ukraine, news agency PTI reported. 

The European Council said the targeted entities “directly support” Russia’s military and industrial complex by circumventing export restrictions on CNC machine tools, microelectronics, UAVs and other advanced technologies.

  “These entities will be subject to tighter export restrictions with regard to dual-use goods, as well as items which might generally contribute to the technological enhancement of Russia's defence sector,” the council said.

  As many as 17 of the 45 entities are located outside Russia, including 12 in China (including Hong Kong), three in India and two in Thailand.

 

[With agency inputs]