EU to lend Ukraine €90 billion, but not from Russian assets

Poland's Prime Minister Donald Tusk praisedthe European Union's (EU)  €90-billion loan to Ukraine to support it in the war against Russia, despite what he called "excessive caution of some leaders."

"Am I fully satisfied? Of course not," Tusk posted on his X account.

"But it is always better to have a piece of something than all of nothing."

The former European Council President also said the possibility of the EU using seized Russian assets for Ukraine is "still on."

Russian President Vladimir Putin said the European Union (EU) commented on the EU's decision to refrain from using seized Russianassets to support Ukraine's army in the war with Moscow.

"The appropriate term for it is theft," Putin said at his annual end-of-year press conference, also calling the plan, which did not materialize, "daylight robbery."

"Why can't this ‍robbery be carried out? Because the consequences could be grave for the robbers."

Putin said such a move would have undermined the trust in the euro zone.

The EU agreed on a €90 billion loan to Ukraine from its own budget, without using any Russian assets.

Ukrainian President Volodymyr Zelenskyy has also welcomed the European Union's decision to finance his country for the next two years as it defends against Russia's invasion.

"This is significant support that truly strengthens our resilience," he wrote on X.

Despite the bloc's not being able to agree on using the frozen Russian assets to fund the loan, Zelenskyy said: "It is important that Russian assets remain immobilized and that Ukraine has received a financial security guarantee for the coming years."

Russia's special envoy for ⁠investment ‍and economic cooperation, Kirill Dmitriev, has, in a way, welcomed the European Union's decision not to use frozen Russian assets to finance a loan for Ukraine.

Writing on X, Dmitriev called the failure to come to an agreement on the frozen assets a "Major BLOW to EU warmongers led by failed Ursula [von der Leyen]."

Dmitriev added that "voices of reason in the EU BLOCKED the ILLEGAL use of Russian reserves to fund Ukraine."

The bloc has still agreed to finance the €90 billion loan to Ukraine, but backed by the European Union's budget.

Hungarian Prime Minister Viktor Orban criticized the EU's decision on the €90 billion loan to Ukraine.

"It's lost money," said Orban, who is seen as one of Russia's closest allies in Europe.

"The good news is that we're staying out," he said.

Hungary, along with Slovakia and the Czech Republic, were given an exemption from the loan commitment to keep them from blocking the decision. 

Any decisions on the use of the EU's own finances require a unanimous vote from all 27 member states.

French President Emmanuel Macron described the deal on Ukraine funding as a major advance.

He called the decision to give Ukraine an interest-free loan, which is only repayable if Russia pays repatriations, the "most realistic and practical way" to fund Ukraine and its war efforts.

He added that the deal included a mechanism to protect three countries — Hungary, Slovakia and the Czech Republic — from any financial fallout.

Macron also said it he believed it would be "useful" for Europe to reengage with Russian President Vladimir Putin "coming weeks."

"I believe that it's in our interest as Europeans and Ukrainians to find the right framework to reengage this discussion," he said.

US talks with both Russian and Ukrainian officials gained speed in recent weeks, but have failed to bring a substantial change to the war in Ukraine, which began with Russia's full-scale invasion of its neighbor in February 2022. 

While EU leaders at the Brussels summit decided to postpone the signing of a trade deal with four Mercosur countries until January, European Commission President Ursula von der Leyen said Friday she is confident the delay will give negotiators the time they need to reach a compromise. 

"We have ‍reached out to our Mercosur partners and ​agreed to postpone slightly the signature," von der Leyen ⁠said, calling the deal "crucially important for Europe — economically, diplomatically, and geopolitically."

She said she was "confident" that there was a ‌sufficient ‌majority to ultimately close the deal. 

The free trade deal aims to increase trade between the economic blocs, but is viewed critically by some major EU countries, including France, Poland and Italy.

"We are working to postpone the Mercosur summit, which will give us more weeks to try to provide the answers our farmers are demanding and the safeguards needed for our products," Italian Prime Minister Giorgia Meloni said Friday. "This will allow us to approve the Mercosur agreement when, as we have said, we will have all the guarantees required by a sector that could otherwise be affected."

French President  Emmanuel Macron said it was too early ⁠to ‍determine if an extra month would suffice to iron out the trade deal, ​but that ​he hoped it would be the case.

 

 

 

EU leaders have avoided "chaos and division" with ⁠their ‍decision to provide Ukraine ⁠with a loan through borrowing ‌cash rather ‌than ⁠use frozen Russian assets, Belgian Prime ‍Minister Bart De ​Wever ​said early on Friday.

"We remained united," De Wever said.

The plan to use Russian state assets frozen in the EU for Ukraine has been the subject of heated debate for weeks. 

Around €210 billion ($246 billion) in frozen Russian central bank assets are held in the EU.

Belgium, where the majority of the Russian assets frozen in the EU are held by Brussels-based firm Euroclear, was vehemently against using them.

It said the proposal would have put the country at legal and financial risks.

If you want to know more, this DW explainer looks at the controversy around using Russia's frozen assets.

German Chancellor Friedrich Merz called the European Council's decision to grant Ukraine a €90 billion loan a "decisive message for an end to the war."

The interest-free loan is enough to cover Ukraine's military and budgetary needs for the next two years, he pointed out in a statement.

And Russian President Vladimir Putin "will only make concessions once he realizes his war will not pay off," Merz said.

"If Russia does not pay reparations we will — in full accordance with international law — make use of Russian immobilized assets for paying back the loan," Merz added.
 

Leaders of EU nations have reached an agreement to provide €90 billion ($106 billion) to Ukraine for 2026-2027, European Council President Antonio Costa wrote on X after a long day and night of consultations in Brussels.

EU leaders did not, however, decide to use frozen Russian assets in Europe to finance the spending. Instead, the loan will be backed by the bloc's common budget. 

The European Commission confirmed on Thursday evening that the planned free-trade deal with the South American Mercosur bloc has indeed been postponed.

Top EU officials had hoped to sign the EU-Mercosur treaty in Brazil this weekend, after more than 25 years of negotiations.

Instead, after protests by European farmers and last-minute opposition from France and Italy, Commission spokesperson Paula Pinho confirmed that the signing of the deal had been put off until January.

Italian Prime Minister Georgia Meloni said her government would back a deal after the European Commission delivers more reassurances to farmers.

Rome's support is required to reach the necessary majority of at least 15 of the EU's 27 states, representing 65% of the bloc's population.

Experts say the delay could dent the EU's negotiating credibility globally as it seeks to forge new trade ties amid commercial tensions with China and the United States.

According to sources who spoke with the AFP and Reuters news agencies, European Commission President Ursula von der Leyen informed EU leaders at a summit in Brussels that the signing of a free trade agreement with the South American bloc Mercosur would be postponed until January.

The European Commission had hoped to finalize the agreement this week, which would establish the world's largest free trade area.

However, Italy joined France in demanding a delay to seek further protection for the farming sector, throwing the plan into disarray.

European Central Bank (ECB) President Christine Lagarde said she believed that EU leaders would agree on a way to support Ukraine, saying it was "too important" an issue to allow for failure. 

"The importance of the matter, given what is at stake, I am fully confident that they will find a solution," she said. 

She repeated the ECB's previously stated position that any mechanism should not breach international legal norms protecting sovereign assets, but said she expected a breakthrough in some way, shape or form. 

"It might be in the usual European way, you know, going in circles and being time-consuming and giving rise to a lot of speculation as to whether it will work ... But I'm confident that we will find a solution," Lagarde said. 

Lagarde said the decision on exactly how to facilitate this was ultimately a political one beyond the remit of her ECB. 

"Our job is to determine that whatever choice is made by the [EU] leaders is going to respect the [EU] Treaty, is going to respect the international rule of law, and will not damage financial stability," she said. "Beyond that, it's something that is outside of our remit." 

Brazilian President Luiz Inacio "Lula" da Silva has said that Italian Prime Minister Giorgia Meloni had called him to ask for extra time to shore up support to the EU-Mercosur trade deal. 

Lula said at a press conference on Thursday that he had called Meloni to discuss the deal, saying that Meloni told him she was not against the deal, but that she needed at most a month to get farmers on board. 

Lula's comments on Thursday appeared somewhat softer than the position he had adopted when briefing his Cabinet the previous day, when he had said Brazil would not be willing to renegotiate terms during his tenure if the current plans disintegrated.

Meanwhile, police and protesters clashed outside the European Parliament on Thursday evening, with police ultimately using tear gas and dispersing the demonstration earlier than scheduled. 

DW's correspondent Rosie Birchard was in central Brussels as large impromptu bonfires started to morph into minor explosions. She also talked to one of the protesters. He said people faced a choice of whether they wanted to eat "Brazilian meat produced any which way," or "Belgian, German, or French meat produced healthily." 

French President Emmanuel Macron said he was not yet prepared to sign off on the EU's trade deal with Mercosur members Brazil, Argentina, Uruguay and Paraguay despite efforts to incorporate new safeguards for European farmers. 

"Much has been improved," Macron said, albeit noting the safeguards had not been finalized or coordinated with the Latin American countries. 

The safeguards would give the EU powers to temporarily reimpose tariffs or restrictions on certain agricultural products if it deemed them harmful to EU producers, for instance because of a sharp dip in prices or increase in overall import levels. 

Macron said France demands that work continue "so that things are taken seriously, our agriculture is respected, and the food security of our citizens throughout Europe is guaranteed."

European Commission President Ursula von der Leyen was scheduled to leave the EU summit and fly straight to Brazil for a signing ceremony with President Luiz Inacio Lula da Silva this Saturday. This now appears to be in doubt. 

Meanwhile, farmers protested in Brussels on Thursday amid the summit, against both the planned trade deal and potential reforms to subsidies in the EU's Common Agricultural Policy.