EU faces Belgian resistance to €140B Ukraine loan
EU risks derailing financial support for Kyiv (photo: Getty Images)
The European Commission is attempting to persuade the Belgian government to support providing Ukraine with a €140 billion mega-loan, intended to serve as a financial cushion for Kyiv over the next three years, according to Politico.
According to the publication, one of the decisive rounds of consultations is scheduled to take place today: senior European Commission officials aim to convince Belgium that all financial and legal risks associated with the use of Russian assets have been taken into account and minimized.
Belgian Prime Minister Bart De Wever is keeping the issue open, as the country is currently undergoing a complicated budget process, with the government trying to agree on €10 billion in spending cuts.
Against the backdrop of internal instability, Belgium fears it could be held responsible for returning funds to Moscow if Kremlin lawyers challenge the use of frozen assets in court.
Another issue is timing. If Belgium does not change its position, the EU will not be able to approve the package on time. In that case, Kyiv would have to rely on other sources of funding or risk being left without critically needed funds in the spring of 2025.
Currently, Ukraine's budget deficit is estimated at around $60 billion for the next two years, not including defense spending.
According to European Commissioner for Economy and Productivity Valdis Dombrovskis, the legal risks are limited, and guarantees from other EU governments would cover any potential losses for Belgium. At the same time, Brussels is demanding over €170 billion in national guarantees from partners "in any case."
In the event of a favorable decision, the European Commission plans to submit a draft law on a reparations loan in the coming weeks. However, if the European Parliament also demands involvement in the process, this could significantly delay the decision and jeopardize timely financial support for Kyiv.
Russian assets
Ukraine's international partners have long been searching for ways to cover the state budget deficit for next year. One of the key options is the creation of a reparations loan, which would allow frozen Russian assets to be directed for Ukraine's benefit.
Delays do not pose a critical risk to Ukraine, as the country's financial needs for 2025 have already been secured.
On November 6, Bloomberg revealed why the EU has yet to agree on the financial plan.
