The EU’s High Representative for Foreign Affairs, Kaja Kallas, admitted on Monday 15 December that discussions on the Reparations Loan were becoming increasingly complicated, at a time when European leaders are expected to take a decision at the end of the week on funding for Ukraine for 2026 and 2027.
“This week is crucial for financing issues. Various options are on the table. [...] The most credible option is the ‘Reparations Loan’, and that’s what we’re working on. We have not yet achieved this, and it is becoming increasingly difficult, but we are continuing our efforts”, she explained ahead of the Foreign Affairs Council, at which the subject was briefly discussed.
Although the Reparations Loan does not require the agreement of all the Member States, the High Representative felt that “without Belgium, it would not be very easy, because [Belgium] holds the majority of the assets, and it is important that it stands by us, whatever we do”. She pointed out that the Member States understand Belgium’s concerns and want to share the burden. “If we go further, the pressure on Belgium will diminish and will be shared with all the Member States, because this is a European proposal. The responsibility lies with Europe, not with Belgium”, she promised.
Furthermore, according to Swedish minister Maria Malmer Stenergard, “all other options have been ruled out”. “The advantage of this proposal [the loan] is that it requires a qualified majority. If we were to opt for another proposal, now obsolete, such as a common loan, unanimity would be required, and I think everyone understands that we won’t reach it”, she added.
At the beginning of December, the European Commission presented Ukraine with two options for funding: - a loan against the EU budget; - the Reparations Loan exploiting all the Bank of Russia’s assets tied up in the EU (see EUROPE 13765/1).
The aim is to provide macro-financial assistance of €90 billion in 2026 and 2027, i.e. two-thirds of the needs assessed by the IMF, to help Ukraine rebuild its infrastructure and continue its war effort.
“As there is no unanimity for the first option, we are focusing our work on the second option”, said a diplomatic source on Monday 15 December. According to a second European source, the Reparations Loan is supported by “22 or 23 Member States”.
By Friday evening, four Member States - Belgium, Bulgaria, Italy and Malta - had expressed their support for the adoption of the regulation banning the transfer of frozen Russian state assets outside the EU (see EUROPE 13772/6), while Hungary and Slovakia were reportedly opposed.
In a declaration appended to the adoption of this regulation, the four countries state that this decision must “under no circumstances” constitute a precedent for circumventing decisions previously taken unanimously. They also warned against “any technical haste” that would lead to the Reparations Loan being implemented without prior political discussion, given the “legal, financial and institutional scope” of the financial packages envisaged for further aid to Ukraine.
The four countries are calling on the European Commission and the Council of the EU to “continue to explore and discuss other options” for funding, “based on an EU loan and transitional solutions”, in order to guarantee the continuity of support for Ukraine before the chosen solution comes into force.
It should also be noted that over the weekend, the Czech Prime Minister, Andrej Babiš, spoke out against Prague providing public guarantees underpinning future aid to Ukraine.
Germany’s Deputy Foreign Minister, Gunther Krichbaum, was firm with sceptical countries. “Ukraine needs our support, and anyone who refuses it must be able to propose alternatives. I have yet to hear a proposal that I would call a brilliant idea. [...] The proposed model can and must be implemented”, he explained. In his view, the concerns raised are “more political than economic”.
On his arrival at the EU Council, Hungarian minister Péter Szijjártó voiced his opposition to the loan. “The freezing of Russian assets, or their use after they have been frozen, constitutes a war provocation of unprecedented seriousness”, he said.
On Monday, the other ministers of the reluctant countries did not speak publicly.
Peace, but not under any conditions. While discussions were underway in Berlin between European, Ukrainian and American officials, and the United States would continue to demand territorial concessions from Ukraine, Ms Kallas reiterated that “only Ukraine [could] set the terms of any agreement”.
“But we all know that the Donbas is not Putin’s ultimate goal. If he gets it, he’ll want more. Concessions must be made by the aggressor, not the victim”, she warned. “We will not recognise the territories occupied by Russia. Whatever the results of the ceasefire, whatever the situation, we will not recognise the legality of the occupation”, declared the Latvian minister, Baiba Braze.
Similarly, at a time when pressure is being put on Kyiv to abandon its application to join NATO, the High Representative pointed out that the ministers had clearly indicated that “any peace agreement must include solid security guarantees”. “These guarantees are the only protection against another Russian invasion. The EU will make its contribution, particularly in terms of training and support for the defence industry”, added Ms Kallas.
“With [Ukraine’s] accession to the EU, Article 42.7 applies, which implies the existence of a mutual assistance clause and naturally refocuses attention on security”, Gunther Krichbaum pointed out. (Original version in French by Camille-Cerise Gessant and Mathieu Bion)