By Lili Bayer, Andrew Gray and Yuliia Dysa
BRUSSELS (Reuters) -The European Union will on Thursday agree in principle to finance Ukraine for the next two years, EU Council chief Antonio Costa said, despite a Belgian threat to block its plan to use Russian frozen assets to aid Kyiv.
Ukrainian President Volodymyr Zelenskiy, a guest at the EU summit in Brussels, said a quick passage of the plan to use the immobilised Russian assets to provide Ukraine with a 140 billion euro ($163.27 billion) loan would save lives.
Belgian Prime Minister Bart De Wever, whose country holds the frozen assets that would be used in the scheme, via securities depository Euroclear, laid out three demands to guarantee his country would not shoulder all the risks.
“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 on arrival at the summit.
BELGIUM DEMANDS SHARING OF RISK
De Wever called on all EU members to share the costs of any legal action pursued by Russia and contribute financially if the money ever had to be paid back. He also said Russian frozen assets held by other countries should be part of the scheme.
“There must be transparency about the risk. There must be transparency about the legal basis for this decision,” he said.
But Costa, arriving at the summit with Zelenskiy, made clear he expected a deal in principle on Thursday, with technical details to be decided later.
“We will take the political decision to ensure the financial needs of Ukraine for 2026 and 2027, including for the acquisition of military equipment,” said Costa, who chairs summits of EU leaders.
The leaders are expected to task the European Commission to come up with a formal legal proposal on the frozen assets plan, with Zelenskiy urging them to do that fast.
“Anyone who delays the decision on the full use of frozen Russian assets is not only limiting our defense, but also slowing down the EU’s own progress,” he told the EU leaders, saying Kyiv would use a significant part of the frozen assets to buy European weapons.
The money could also be used right away to strengthen Ukraine’s air defence, air fleet and frontline positions, he said, adding: “That means saving lives.”
SANCTIONS PACKAGE FORMALLY APPROVED
The EU summit takes place after a rollercoaster few days that saw President Donald Trump announce and then back away from plans to meet Russia’s Vladimir Putin in Budapest. The planned summit was then put on hold and on Wednesday, the U.S. hit Russia’s major oil companies with sanctions.
As he arrived at the EU gathering, Zelenskiy welcomed the U.S. move and a new package of EU sanctions against Russia, which includes a ban on Russian liquefied natural gas from January 2027, as well as new measures on the so-called shadow tanker fleet and two independent Chinese oil refineries.
EU WRANGLES OVER LOAN CONDITIONS
Even before a formal proposal has been made to use the Russian assets frozen after its full-scale invasion of Ukraine in 2022, EU countries have been wrangling over what conditions to impose on the “reparations loan”.
Some want all the money to go to Ukraine’s military, with the bulk spent on European weapons. Others say Kyiv should be able to use some of the loan to buy U.S. arms and finance its general budget.
KYIV WANTS FREE HAND WITH LOAN CASH
A senior official in Zelenskiy’s administration told Reuters that Ukraine needed the funds by the end of the year and autonomy over how to spend them.
The European Commission suggested a compromise whereby the majority of the loan would be spent on Ukrainian and European weapons but a smaller part would be for general budget support, which Kyiv could also use to buy arms from outside Europe.
Russia has described the idea as an illegal seizure of property and warned of retaliation.
(Reporting by Yuliia Dysa, Lili Bayer, Andrew Gray, Julia Payne, Philip Blenkinsop, Sudip Kar-Gupta, Bart Meijer, Benoit Van Overstraeten, Jan Strupczewski, Charlotte Van Campenhout and Inti Landauro; Writing by Lily Bayer, Ingrid Melander and Andrew Gray; Editing by Stephen Coates, Kate Mayberry, Aidan Lewis)
