EU pushes ahead with plans to use frozen Russian cash balances despite Belgium’s opposition
Von der Leyen says the EU is proposing to cover two-thirds of Ukraine’s financing needs for the next two years – that’s €90bn – with the rest to be covered by international partners.
She says the EU wants to help Ukrainians to “equip them with the means to defend themselves and to lead peace negotiations from a position of strength.”
“Since pressure is the only language the Kremlin responds to, we can dial it up. We have to increase the costs of war for Putin’s aggression, and today’s proposal gives us the means to do this,” she says.
It would be funded through EU borrowing – raising capital on capital markets – and the use of cash balances from the immobilised Russian assets in the EU.
“We propose to cover all financial institutions that have accumulated such cash balances, and these institutions would have to move the cash into the instrument of the reparations loan. So in other words, we’re taking the cash balances, we’re providing them to Ukraine as a loan, and Ukraine has to pay back this loan if and when Russia is paying reparations,” she explains.
She says the funds will be used “predominantly” to produce and buy military support for Ukraine from Europe and the EEA countries, with occassional purchases “from the outside.”
Responding to Belgium’s continuing opposition to the plan, von der Leyen says the commission has “listened very carefully” to its concerns, and “have taken almost all of them into account.”
(Well, that’s not what Belgium’s foreign minister said earlier today, as we reported earlier at 12:02)
She says there will be “very strong safeguards” in place to make sure the funds are used in the right way, and to protect Belgium from any legal action.
“We will share the burden in a fair way,” she says.
Key events
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European Commission plans ‘reparations loan’ to Ukraine using frozen Russian assets — full story
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New proposals send message to Russia that prolonging war ‘comes with high cost for them,’ von der Leyen says
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EU pushes ahead with plans to use frozen Russian cash balances despite Belgium’s opposition
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EU’s von der Leyen briefing media on plans to fund Ukraine
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Hungary and Slovakia to challenge EU plan to phase out Russian gas imports, foreign minister says
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‘Just peace’ in Ukraine is unlikely, Finland’s Stubb warns
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Putin did not reject US proposals, just found some of them ‘unacceptable,’ Kremlin spokesperson says
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EU reparations loan for Ukraine ‘worst of all’ options, with Belgium’s concerns ‘not being heard’, minister says
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Former EU top diplomat among three held in fraud investigation
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Zelenskyy’s aides to meet with European national security advisors to discuss peace talks
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‘Pretty obvious’ Putin doesn’t want peace in Ukraine, European ministers warn
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Europe ‘turning off tap on Russia gas, forever’ as political deal on banning Russian imports by 2027 reached
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Morning opening: Okay, so what do we do now?
European Commission plans ‘reparations loan’ to Ukraine using frozen Russian assets — full story
Jennifer Rankin
in Brussels
The European Commission will move ahead with a controversial proposal to fund Ukraine with a loan based on Russia’s frozen assets, it has announced.
But in a concession to concerns raised by Belgium, which hosts most of the assets, the EU executive has also proposed another option: an EU loan based on common borrowing.
The European Commission president, Ursula von der Leyen, said on Wednesday the two proposals would ensure “Ukraine has the means to defend [itself] and take forward peace negotiations from a position of strength”.
The publication of a long-awaited legal text of the reparations loan comes ahead of an EU summit later this month at which EU leaders are being urged to agree a two-year funding plan for Ukraine to avert a looming cash crunch.
Leaders failed in October to agree on a proposed “reparations loan” to Ukraine using the Russian assets, but the question is becoming increasingly urgent, with Kyiv forecast to run out of money from next spring. EU officials estimate Ukraine needs €136bn (£119bn) in 2026 and 2027 to continue its defence and keep the country running.
The stakes became even higher after the Trump administration floated a plan to invest some of Russia’s frozen assets in joint US-Russia projects, as well as taking profits from $100bn (£75bn) of the funds that it had earmarked to reconstruct Ukraine. European leaders strongly pushed back against these ideas, which were part of a 28-point plan for Ukraine that has since been amended.
Just circling back quickly to what the UK PM said in parliament today on Putin’s lack of action on reaching a deal.
“We all know that Putin is the aggressor here” Keir Starmer told Commons.
“Putin is dragging his feet, not wanting to come to the table, not wanting to reach an agreement.
“We have to continue to put pressure on in every conceivable way.
“That is in supporting Ukraine with capability and resource, but also ensuring that our sanctions, acting with allies, do as much damage to the economy in Russia as we can, and pressure that we can put on, will continue to do so, but he’s absolutely right to raise it.”
Zelenskyy on Telegram says he’s also urged the defence minister Denys Shmyhal to carry out an urgent renewal of supervisory boards in the defence sector.
“It’s through supervisory boards that management and oversight of internal processes in companies are carried out, and this must be ensured one hundred percent,” the Ukrainian leader says.
Obviously this comes in the wake of the corruption scandals in the energy sector that have rocked Ukraine for weeks and destabilised Zelenskyy’s centre of power. The president fired his top adviser, Andriy Yermak, last Friday over allegations he siphoned off funds and was involved in an alleged $100-million kickback scheme.
State-owned companies such as oil and gas firm Naftogaz, power grid operator Ukrenergo and nuclear energy company Energoatom dominate the Ukrainian energy sector.
Downing Street has dismissed Putin’s comments that Russia is “ready” for war with Europe as “yet more Kremlin claptrap”.
A spokesman for UK PM Keir Starmer told reporters after the UK parliament’s questioning session that the PM had “rightly pointed out that it was “yet more rhetoric from President Putin about Europe wanting to go to war. It’s as dangerous as it is wrong.”
“European nations are united in supporting Ukraine‘s right to self-defence under international law and Nato’s ready to respond to any threats with unity and strength.”
Pressed on whether Britain was prepared for war, the official said “our armed forces always stand ready to defend this country” and reiterated that “this is yet more Kremlin claptrap from a president who isn’t serious about peace”.
Von der Leyen also clarifies some of the maths behind the proposal.
She says that while the total of immobilised Russian assets amount to €210bn, but the commission looked at Ukraine’s needs in 2026 and 2027 estimated at €137bn.
Since the EU wants to provide two-thirds of the funding required, that’s the €90bn mentioned earlier, and it will be financed through both outlined tools, not just the reparations loan.
And that ends the press conference.
New proposals send message to Russia that prolonging war ‘comes with high cost for them,’ von der Leyen says
Von der Leyen also says that the EU has informed the US administration about the proposal, speaking to treasury secretary Scott Bessent, and “it was positively received.”
She says other countries that have immobilised Russian assets are also welcome to join in the proposed legal structure.
More broadly, she says “we are in for the long haul with Ukraine,” as “Russia has everything to prolong the war, and is so far not willing, for example, to come to the negotiation table that President Zelensky constantly offers.”
“Therefore, it is a very clear message also to Russia that the prolongation of the war on their side comes with a high cost for them,” she says.
“To be very, very clear: we want peace, and … no one wants more peace than Ukraine, and therefore this is an invitation to the negotiation table,” she says.
In her opening comments, von der Leyen hinted that the proposal could be adopted without Belgium as it only required a qualified majority.
This gets later confirmed by Dombrovskis, but he is very diplomatic about it and says the commission will want to “hear from member states based on concrete proposals which are put forward to see how we move forward with this.”
Asked about Belgium’s concerns, von der Leyen says that the EU will continue with its consultations on this issue, and says “it’s very important that we accommodate all the concerns and perceived risks,” but essentially says the proposal addresses most of them through extending the scope and improving the burden sharing provisions.
EU economy commissioner Valdis Dombrovskis says “we stand at a crossroads,” and the EU “must act now” to “provide this lifeline to Ukraine.”
“In providing this lifeline to Ukraine, we are also enhancing our security. Not providing support that Ukraine needs to continue its fight for survival would come with a high cost, not only to Ukraine, but also to our entire continent’s security and freedom,” he says.
He also stresses that “everything we propose today is legally robust, fully in line with the EU and international law,” pointing to a “robust system that builds on existing safeguards.”
Dombrovskis insists that “these protections will cover the unlikely event” of a legal action against Belgium or the EU.
Details of the proposed EU plans are here, and they still need to be formally signed off working with the European Parliament and the European Council.
EU pushes ahead with plans to use frozen Russian cash balances despite Belgium’s opposition
Von der Leyen says the EU is proposing to cover two-thirds of Ukraine’s financing needs for the next two years – that’s €90bn – with the rest to be covered by international partners.
She says the EU wants to help Ukrainians to “equip them with the means to defend themselves and to lead peace negotiations from a position of strength.”
“Since pressure is the only language the Kremlin responds to, we can dial it up. We have to increase the costs of war for Putin’s aggression, and today’s proposal gives us the means to do this,” she says.
It would be funded through EU borrowing – raising capital on capital markets – and the use of cash balances from the immobilised Russian assets in the EU.
“We propose to cover all financial institutions that have accumulated such cash balances, and these institutions would have to move the cash into the instrument of the reparations loan. So in other words, we’re taking the cash balances, we’re providing them to Ukraine as a loan, and Ukraine has to pay back this loan if and when Russia is paying reparations,” she explains.
She says the funds will be used “predominantly” to produce and buy military support for Ukraine from Europe and the EEA countries, with occassional purchases “from the outside.”
Responding to Belgium’s continuing opposition to the plan, von der Leyen says the commission has “listened very carefully” to its concerns, and “have taken almost all of them into account.”
(Well, that’s not what Belgium’s foreign minister said earlier today, as we reported earlier at 12:02)
She says there will be “very strong safeguards” in place to make sure the funds are used in the right way, and to protect Belgium from any legal action.
“We will share the burden in a fair way,” she says.
