EU agrees €90 billion loan for Ukraine without tapping frozen Russian assets

The Hindu
The Hindu
2h ago
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EU agrees on €90 billion loan for Ukraine without using frozen Russian assets, relying on the bloc's budget.
EU agrees €90 billion loan for Ukraine without tapping frozen Russian assets
A What happened
EU leaders reached a late-night agreement to provide Ukraine with a €90 billion loan over two years using the EU's common budget after failing to use €200 billion in frozen Russian assets held mostly in Belgium, due to liability-sharing disputes. Ukrainian President Zelenskyy had urged use of Russian assets to defend Ukraine and rebuild damage. The loan aims to address Ukraine's looming financial shortfalls as it faces continued warfare and diplomatic efforts advance, including US-Ukraine talks. Some EU member states, including Hungary, Slovakia, and the Czech Republic, abstained from committing to this joint debt. European Commission President Ursula von der Leyen stated Ukraine must repay the loan once Moscow compensates for inflicted damages. The deal reflects the EU's challenge of uniting diverse member interests while supporting Ukraine's defense and financial stability.
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Key insights

  • 1

    EU financial solidarity constrained by member state liability concerns: Despite strong political will to aid Ukraine, divergent stances within the EU especially from Belgium barred using frozen Russian assets, reflecting structural limits in collective fiscal responses under crisis conditions.

  • 2

    Loan signals EU commitment amid geopolitical risk and internal division: The funding demonstrates EU resolve to back Ukraine financially while carefully managing internal risks and differing national priorities, balancing immediate support against potential liabilities tied to Russian funds.

  • 3

    Linking repayment to Russia's reparations frames EU strategy politically and: Conditioning Ukraine's loan repayment on Moscow paying damages sets a precedent tying financial aid outside direct budgetary risk to Russia's accountability, reinforcing the EU's stance on the war's economic impacts.

Takeaways

The EU's €90 billion loan package for Ukraine balances urgent financial support with political and legal caution, underscoring challenges in resolving funding amid ongoing war and divergent member interests.

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