EU delays decision on 140B loan backed by frozen Russian assets

European Union leaders meeting in Brussels on Thursday agreed to address Ukraine’s financing needs for 2026 and 2027 but postponed a decision on a proposed 140 billion euro loan backed by frozen Russian assets after Belgium objected to the scheme. Leaders instructed the European Commission to produce options for financial support to be discussed at the next summit in December.

The European Commission had proposed a complex mechanism under which immobilized Russian central bank assets held in European financial institutions would effectively underwrite a so called reparations loan. Under the plan, the commission would issue bonds backed by EU member states and use matured cash balances from a Brussels clearinghouse to provide Ukraine with multi year financing that Kyiv would be required to repay only if Russia ultimately pays reparations. The proposal was intended to cover Kyiv’s budget and defence needs through 2026 and 2027.

Belgium, which hosts the Euroclear clearinghouse where the largest tranche of the frozen assets is deposited, raised legal and financial objections. Prime Minister Bart De Wever demanded that the liability be shared across all member states and set three...