BRUSSELS (AP) — European Union leaders stalled early Friday in talks to provide a massive loan to Ukraine using frozen Russian assets, officials said, as Belgium sought ironclad guarantees from its partners that they would protect the country from any retaliation by Russia.
The leaders want to use the Russian assets for a “reparation loan” to fund Ukraine's military and economic needs for the next two years. Kyiv would only pay back the money once Russia ends the war, now in its fourth year, and pays hundreds of billions for the destruction it has caused.
But the bulk of the assets — some 193 billion euros ($226 billion) as of September — are held in the Brussels-based financial clearing house Euroclear and Belgium wants to protect its interests. Russia’s Central Bank has launched a lawsuit against Euroclear and Belgium has doubts that the loan is legally sturdy.
“After lengthy discussions, it is clear that the reparations loans will require more work as leaders need more time to go through the details,” said an EU official, who was permitted to brief reporters on developments in the sensitive talks on condition that they not be named.
Talks on a plan B of raising the funds on international markets continued, even though there appeared to be no easy way to secure the unanimous support of all 27 member countries for it to pass.
Ukrainian President Volodymyr Zelenskyy meanwhile pleaded for a quick decision to keep Ukraine afloat in the new year.
Belgian concerns over Russian pressure
Belgium fears that Russia will strike back and prefers the plan B. It says frozen assets held in other European countries should be thrown into the pot as well, and that its partners should guarantee that Euroclear will have the funds it needs should it come under legal attack.
An estimated 25 billion euros ($29 billion) in Russian assets are frozen in banks and financial institutions in other EU countries, including France, Germany and Luxembourg.
“Give me a parachute and we’ll all jump together,” Belgian Prime Minister Bart De Wever told lawmakers ahead of the summit in reference to the reparation loan plan. “If we have confidence in the parachute that shouldn’t be a problem.”
The Russian Central Bank's lawsuit ramped up pressure on Belgium and its EU partners ahead of the summit.
The loan plan would see the EU lend 90 billion euros ($106 billion) to Ukraine. Countries like the United Kingdom, which said Thursday it is prepared to share the risk, as well as Canada and Norway would help make up any shortfall.
Russia's claim to the assets would still stand, but the assets would remain locked away at least until the Kremlin ends its war on Ukraine and pays for the massive damage it caused.
In mapping out the loan plan, the European Commission set up safeguards to protect Belgium, but De Wever has remained unconvinced.
Zelenskyy describes it as a moral question
Soon after arriving at EU headquarters Thursday morning, the Ukrainian president sat down with the Belgian prime minister to make his case for freeing up the frozen funds. The war-ravaged country is at risk of bankruptcy and needs new money by spring.
“Ukraine has the right to this money because Russia is destroying us, and to use these assets against these attacks is absolutely just,'' Zelenskyy told a news conference.
In an appeal to Belgian citizens who share their leader's worries about retaliation, Zelenskyy said: “One can fear certain legal steps in courts from the Russian Federation, but it’s not as scary as when Russia is at your borders.''
“So while Ukraine is defending Europe, you must help Ukraine,” he said.
Whatever method they use, the leaders have pledged to meet most of Ukraine's needs in 2026 and 2027. The International Monetary Fund estimates that would amount to 137 billion euros ($160 billion).
EU Council President António Costa, who is chairing the meeting, vowed to keep leaders negotiating until an agreement is reached, even if it takes days.
Polish Prime Minister Donald Tusk said it was a case of sending "either money today or blood tomorrow" to help Ukraine.
German Chancellor Friedrich Merz said that he hopes Belgium's concerns can be addressed.
"The reactions of the Russian president in recent hours show how necessary this is. In my view, this is indeed the only option. We are basically faced with the choice of using European debt or Russian assets for Ukraine, and my opinion is clear: We must use the Russian assets.”
Hungary and Slovakia oppose a reparations loan. Apart from Belgium, Bulgaria, Italy and Malta are also undecided, but as many as nine countries might be required to block the move.
“I would not like a European Union in war," said Hungarian Prime Minister Viktor Orbán, who sees himself as a peacemaker. He’s also Russian President Vladimir Putin’s closest ally in Europe. “To give money means war.”
Orbán described the loan plan as a “dead end.''
The outcome of the summit has significant ramifications for Europe's place in negotiations to end the war. The United States wants assurances that the Europeans are intent on supporting Ukraine financially and backing it militarily — even as negotiations to end the war drag on without substantial results.
The loan plan poses important challenges to the way the bloc goes about its business. Should a two-thirds majority of EU leaders decide to impose the scheme on Belgium, which has most to lose, the impact on decision-making in Europe would be profound.
The EU depends on consensus, and finding voting majorities and avoiding vetoes in the future could become infinitely more complex if one of the EU's founding members is forced to weather an attack on its interests by its very own partners.
De Wever too must weigh whether the cost of holding out against a majority is worth the hit his government's credibility would take in Europe.
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Associated Press writers Kirsten Grieshaber in Berlin and Illia Novikov in Kyiv, Ukraine, contributed to this report.