News|Russia-Ukraine warEU proposes using Russian assets, loans to fund $105bn package to UkraineBut Belgium, a vocal critic of the plan to use Russian assets to back Ukraine, says its concerns have not been resolved.
The European Commission has put forward a proposal to utilize frozen Russian assets or resort to international borrowing to generate 90 billion euros ($105bn) to support Ukraine's defense efforts against Russia. However, the plan faces opposition from…
The European Commission has put forward a proposal to utilize frozen Russian assets or resort to international borrowing to generate 90 billion euros ($105bn) to support Ukraine's defense efforts against Russia. However, the plan faces opposition from Belgium, a key stakeholder.
On Wed, the European Union's executive body suggested two methods to meet Ukraine's financial requirements for 2026 and 2027:
An EU loan to Kyiv sourced from the private market. A "reparations loan" funded using Russian state assets frozen within the EU.
The Commission emphasized that these solutions signify the EU's dedication to supporting Ukraine's sovereignty and investing strategically in Europe's security and peace efforts.
Implementation and Stakeholder Concerns
Commission President Ursula von der Leyen stated that the proposals aim to ensure Ukraine has the necessary resources for defense and peace negotiations. The EU plans to cover two-thirds of Ukraine's financial needs over the next two years, with the remaining funds expected from international partners.
A "reparations loan" funded using Russian state assets frozen within the EU.
Belgium has expressed significant reservations about the frozen assets plan, citing legal risks and potential impacts on peace negotiations. Belgian Foreign Minister Maxime Prevot highlighted these concerns, advocating for an alternative approach of EU borrowing from the markets.
The proposal requires the approval of 15 out of 27 EU members to proceed with the frozen assets solution. In contrast, the international borrowing option demands unanimous consent, which may face challenges due to Hungary's opposition.
The European Commission clarified that the scheme does not equate to confiscation, as it is structured as a loan. Ukraine would only be required to repay the loan if Russia compensates for war damages. Russia has labeled the use of its assets by the EU as theft, with threats of prolonged litigation.
In parallel, the United States Treasury Secretary reportedly had a positive reception of the reparation loan proposal, despite complexities involving a previous plan to utilize some assets in a joint US-Russian investment vehicle.
Additionally, the EU has agreed to phase out Russian gas imports by late 2027, marking a significant shift from its dependency on Russian energy. Under the agreement, liquefied natural gas (LNG) imports will cease by the end of 2026, and pipeline gas imports will end by November 2027.
The EU aims to eliminate its reliance on an unstable supplier that has previously destabilized European energy markets. While Hungary and Slovakia are expected to challenge this measure legally, due to their dependency on Russian energy, the EU remains committed to exploring new energy partnerships.
Based on reporting by Al Jazeera.