EU leaders fail to agree on "mega-loan" for Ukraine using Russian frozen assets – FT

EU leaders have failed to reach consensus regarding a €140 billion loan for Ukraine based on frozen Russian assets at a summit in Copenhagen.

Source: Financial Times

Details: Belgium refused to lift its objection to using Russian assets while France and Luxembourg raised concerns over the legal implications.

The proposed "mega-loan" would have Ukraine repay the loan after Russia ends its war and pays post-war reparations, with the EU then reclaiming the funds via Euroclear.

If Russia refuses to pay reparations, it would lose its claim to the assets.

More details: During a brief discussion on the proposal, several EU leaders said they support the principle in general but called on the European Commission to assess the legal and fiscal consequences further.

Sources told FT that the commission is unlikely to produce a formal legal proposal for leaders ahead of their Brussels meeting in three weeks due to the technical workload required.

The Belgian Prime Minister Bart De Wever opposed the loan at the closed-door summit and urged stronger legal safeguards in case Moscow takes legal action against Belgium.

The European Commission President Ursula von der Leyen said that the full proposal needed to be developed in greater detail and that it was absolutely clear the risk must be shared by all of the EU member states.

EU officials say that while using Russian assets may be the only way to provide the loan, all 27 member states must agree to release the funds to Kyiv.

Background:

• It was reported on 24 September that the EU may provide Ukraine with a so-called reparations loan of up to €140 billion, but the final amount will be determined after the International Monetary Fund's assessment of Ukraine's needs in 2026-2027.
• German Chancellor Friedrich Merz called on the EU to use frozen Russian assets to provide Ukraine with a €140 billion loan.

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