A tense Brussels summit exposed sharp divisions among EU
leaders over future Ukraine aid, highlighting disagreements amid escalating
geopolitical pressures.
Von der Leyen claims that in order for Kyiv to negotiate
peace from a "position of strength," the funds would support
Ukraine's military and key services.
The future of European independence may be shaped by the
urgent negotiations taking place in Brussels. In a secret meeting, Belgian
Prime Minister Bart De Wever, German Chancellor Friedrich Merz, and Ursula von
der Leyen, President of the European Commission, are discussing a blocked EU
plan to support Ukraine.
Merz cautions that the result could determine Europe's place
in world affairs as pressure grows.
The financial crisis facing Ukraine in the face of
persistent Russian aggression is the reason for the urgency. In order to
sustain Kyiv through 2026 and 2027, EU leaders are frantically trying to find a
method to raise almost €90 billion.
Von der Leyen claims that in order for Kyiv to negotiate
peace from a "position of strength," the funds would support
Ukraine's military and key services.
The head of the Commission has suggested two funding
options: one uses blocked Russian assets as security for loans to Ukraine,
while the other includes borrowing on foreign markets guaranteed by the EU
budget.
Belgium continues to be a major barrier to the asset-backed
loan scheme. Belgium, which is home to about two-thirds of the €290 billion in
frozen Russian cash, fears
legal reprisals should those assets be utilized. According to Prime Minister De
Wever, the strategy exposes his nation to significant financial and legal risk
in the event that Russia pursues repayment or prevails in subsequent claims.
Critics contend that the idea breaches a red line, despite
the EU's insistence that it is lawful under both EU and international law.
De Wever cautioned that while
"stealing from the bad to give to the good"
might sound wonderful, seizing sovereign property during
a conflict creates a risky precedent. He claimed that German state finances
were not confiscated even during World War II.
In a scathing commentary, Chancellor Merz called on EU
leaders to take decisive action. He suggested a system in which the financial
risk would be distributed among all member states based on their respective
economic sizes.
He warned that his nation and himself would suffer the
consequences "for eternity" if the assets were taken, calling the
notion of Russia losing the war and receiving reparations "a complete
illusion."
“If we cannot do something as important as providing funds for Ukraine, then we have truly failed,”
one EU diplomat told The Guardian.
Only a few weeks remain until the next key EU meeting on
December 18, and diplomats fear that failing to reach a consensus on Ukraine
finance would harm the EU's reputation in addition to weakening Kyiv.
Beyond Belgium, another obstacle is Hungary's opposition to
joint EU borrowing.
Unanimity among all 27 member states is necessary for any
agreement on loans from the joint EU budget, a requirement that is getting
harder to meet in the contentious political environment of today.
Delays in EU action might have dire repercussions because
Ukraine's resources are running dangerously short.
In order to prevent Russia from gaining a strategic
advantage on the battlefield and in negotiations, observers caution that the EU
must move swiftly.
The purpose of using frozen assets as collateral instead of
seizing them is to demonstrate to Russia that Ukraine is capable of fighting
for a long time.
Given that Kyiv is not in danger of collapsing, EU officials
expect that this strategy will put pressure on Moscow to engage in
negotiations.
Ukraine is in a state of uncertainty as officials in
Brussels eat and discuss. Its governmental and military institutions are under
tremendous pressure in the absence of further resources.
The longer the EU delays, the greater the cost not just in
euros, but also in human lives and geopolitical stability.
Chancellor Merz closed with a stark warning:
“What we decide now will determine the future of Europe.”
He described Russia as
preparing militarily for conflict with the West and urged the EU to show unity
and strength.
“Europe must decide and shape what happens on our continent,”
he said, and time is running out.
How would loans from frozen Russian assets be legally structured?
Loans from frozen Russian means would be fairly structured
as G7- backed syndicated loans or bonds to Ukraine, collateralized by gains
generated from €300 billion in paralyzed Central Bank of Russia( CBR) reserves
(held substantially in Euroclear), with prepayment secured via future
restitutions claims against Russia rather than outright confiscation to
minimize autonomous impunity challenges.
G7 places a tentative first- precedence lien on CBR means as
collateral; loans issued by EU/ G7 countries or special purpose vehicles
(SPVs), with enforcement touched off only if Russia defaults on restitutions
(e.g., ICJ award), conserving Russian power until also.
Assets ring-fended in escrow for Ukraine to pledge, or
invested in" cat bonds" where detector events (restitutions judgment/
Russian non-compliance) lose star to Ukraine, avoiding endless transfer
outspoken.