EU leaders swerve decision on using frozen Russia assets to defend Ukraine | Ukraine

EU leaders have abandoned a decision to use Russia’s frozen assets to finance Ukraine’s defence, despite Volodymyr Zelenskyy’s call for swift action to make Moscow pay for its war.

Ukraine’s hopes of agreeing on a new way to finance the war effort have been dashed by opposition from Belgium, which hosts most of the Russian central bank funds immobilized in the EU by the Brussels-based agency Euroclear.

EU leaders agreed only to ask the European Commission to offer “financial support options” for Ukraine, without making direct reference to Russia’s frozen assets.

Earlier drafts, by contrast, stated that proposals should include “possible phased use of cash balances” associated with dormant assets.

European Council President António Costa tweeted after the talks: “The EU is committed to meeting Ukraine’s urgent financial needs over the next two years, including support for military and defense efforts.”

As the US backs down, the puzzle of how to finance Ukraine’s war effort will be discussed again at an EU summit in December. A compensation loan remains an option, but it is much less likely to be ready by early next year as Ukraine hopes.

The trumped-up result was a blow to European Commission president Ursula von der Leyen, who last month promised Ukraine compensation loans based on cash balances “associated with these Russian assets.”

Earlier on Thursday, Zelenskyy called on leaders to make this “wonderful” decision as soon as possible to fund Ukraine’s defense.

“Anyone who delays this decision is not only limiting our defense, but also slowing down your own progress,” he told EU leaders, promising that Ukraine would spend a lot of money buying European weapons. “It is now time to take action regarding Russian assets and I expect your full support,” he said.

The European Commission hopes to use assets at Euroclear as the basis for a €140bn (£122bn) loan to Ukraine; This loan will be repaid only if Russia pays war reparations.

Authorities believe they have found a way to make Russia pay for its war without seizing assets or violating property rights.

The Kremlin says the plan amounts to theft and has promised to pursue any person or country thought to have received Russian money.

Leaders need agreement from Belgium, which is home to 183 billion euros of Russian central bank assets at Euroclear in Brussels, 86% of all Russian state assets in the EU and two-thirds of the world’s total.

Belgian prime minister Bart De Wever, who attended a summit of EU leaders in Brussels on Thursday, threatened to oppose the plan without guarantees that the rest of the EU would cover the cost if Russia came looking for its money.

“If you want to do this, we have to do it together. If the money has to be repaid, we want the guarantee that every member state will contribute. The consequences of this cannot only be for Belgium,” he said.

In a bid to secure Belgium’s support, EU leaders will pledge “burden sharing and coordination with G7 partners”, according to an unpublished portion of the text.

About a third of Russia’s state assets are held outside the EU, including Japan (€28 billion), the UK (€27 billion), Canada (€15 billion) and the United States (€4 billion). While Britain and Canada are expected to make similar moves, EU officials are less hopeful about the United States, which holds a small but symbolic amount of Russian state assets.

The credit plan remains on the table with many unanswered questions. A long-term freeze on Russian assets depends on the unanimity of the EU. Hungary’s Russia-friendly government has frequently delayed EU sanctions and, although it has never dared to block them, its anti-Ukrainian rhetoric raises questions about its future support.

Hungarian prime minister Viktor Orbán skipped discussions on Ukraine to attend events in Budapest commemorating the 1956 Hungarian revolution, which was crushed by Soviet repression. As is now customary, the EU adopted a declaration of support, including future financing, for Ukraine without Hungary’s support.

Earlier in the day, the EU adopted the 19th sanctions package against Russia, targeting liquefied natural gas for the first time. The move came shortly after the United States imposed sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, the first restrictive measures passed by the Trump administration.

Latvian prime minister Evika Siliņa said the agreement on the loan would strengthen Zelenskyy in any peace talks with Putin. “I believe [Zelenskyy] “If these negotiations take place, it will be much stronger to enter into these negotiations,” he said.

Ireland’s taoiseach, Micheál Martin, said his government supported the plan and did not see any consequences for Ireland’s neutrality.

“This can’t be a repeating cycle where big countries like Russia think they can go in and destroy a place and then expect others to pay to rebuild,” he said.

Zelenskyy expressed hope that the United States would eventually procure long-range Tomahawk missiles. “It was like sanctions; it used to be incredible, and now we’re seeing decisions on these energy sanctions that are very important,” he said.

But he downplayed reports of the 12-point peace plan that emerged earlier this week, suggesting it was the work of “some very good friends” who wanted to thwart “some plans from Russia” backed by another country he did not name.

The plan, first reported by Bloomberg, was inspired by the US administration’s Gaza plan and called for a ceasefire, prisoner exchange and the creation of a peace board chaired by Donald Trump.

Zelenskyy said Russia has shown no signs of wanting to stop the war, citing the recent bombing of a kindergarten. “If there is more pressure on Russia, they will sit down and talk, and I think that’s the plan,” he said.