EU drafts plan B as deal on Ukraine reparations loan stalls - Рolitico
European Commission President Ursula von der Leyen (photo: Getty Images)
European countries are developing a plan B in case they are unable to agree on using frozen Russian assets to provide a reparations loan to Ukraine, Politico reports.
The outlet recalled that at last month's summit, EU leaders had hoped to agree on a proposal to use Russia's frozen reserves to provide Ukraine with a €140 billion reparations loan.
However, this idea still raises concerns in Belgium, where most of the Russian funds are held.
Despite intensive negotiations between Belgium and the European Commission in recent weeks, Belgian Prime Minister Bart De Wever still has concerns about legal liability.
Therefore, Brussels is now considering how to help Ukraine if the reparations loan proposal is not ready in time for EU leaders to approve it at the December 18 summit.
According to Politico's sources, one option gaining support is a "bridging" loan financed through EU borrowing to support Ukraine in the first months of 2026.
It is noted that this would give more time to organize a full reparations loan using Russian assets in a way acceptable to Belgium, ensuring a long-term solution.
Two diplomats said that Ukraine may be offered to repay the initial EU transition loan after receiving funding from the long-term reparations loan.
EU member state ambassadors discussed possible options with the European Commission at a meeting in Brussels on November 25.
According to a senior official familiar with the discussions, countries such as France, Germany, the Netherlands, Lithuania, and Luxembourg urged the European Commission to continue working on financing proposals for Ukraine.
In the long term, the reparations loan is widely seen as the only option for Ukraine.
EU member states are unwilling to allocate funds from their national budgets to provide Ukraine with financial grants. Many of them are already struggling with budget deficits and high borrowing costs. Therefore, convincing Belgium to join the initiative is considered a key point.
One idea would be to "combine the reparations loan option with one of the other options," the outlet's interlocutor noted. But this must "not take too much time because of course there's a sense of urgency now and it's pressing."
Politico suggests that the biggest obstacle will be that such EU borrowing would require the unanimous support of all 27 member states, and Hungary has long opposed new measures to finance Ukraine.
Reparations loan for Ukraine
Earlier, the European Commission proposed providing Ukraine with a reparations loan. It is envisaged that frozen Russian assets would back it.
For Ukraine to receive such a reparations loan, the approval of all EU member states is required.
At the moment, the initiative is being blocked by Belgium, the country that holds the largest share of frozen Russian assets.
Against this backdrop, the European Commission has begun looking for alternative solutions to support Ukraine in the future.
Meanwhile, Ukraine is urging its European allies to make a political decision in December on providing a $163 billion reparations loan based on Russia's frozen assets.
