EU promises financial support to Kyiv, but postpones plan to freeze Russian assets

(Patria) - European Union leaders agreed on Thursday to meet Ukraine's "urgent financial needs" for the next two years, but did not approve a plan to use frozen Russian assets to finance a huge loan to Kyiv due to concerns raised by Belgium, Reuters reported.

Belgium's stance was crucial because the Belgian financial institution, Euroclear, holds assets that would be used under the plan to finance a 140 billion euro loan to support Ukraine in its fight against the Russian invasion.

Many EU governments had hoped that leaders, meeting at a summit in Brussels, would give their blessing to the concept and ask the European Commission, the EU's executive body, to come up with a formal legal proposal in the coming weeks.

But the text approved by all leaders, except for Hungarian Prime Minister Viktor Orban, who is friendly towards Russia, was watered down from previous drafts to call for "options for financial support based on an assessment of Ukraine's financial needs".

"Russian assets should remain immobilized until Russia ends its war of aggression against Ukraine and compensates it for the damage caused by its war," the declaration added.

Earlier, Ukrainian President Volodymyr Zelenskyy, a guest at the summit, called for the swift adoption of the plan for the huge loan. "Anyone who delays the decision on the full use of frozen Russian assets not only limits our defense but also slows down the EU's own progress," he told EU leaders, saying that Kyiv would use a significant portion of the funds to buy European weapons.

The money could also be used immediately to strengthen Ukraine's air defense, air fleet, and frontline positions, he said, adding: "This means saving lives.".

But Belgian Prime Minister Bart De Wever issued a strong warning before the summit, saying he could only support the plan if he had strong assurances that it was legal and that other EU countries would share the risks.

"If the requirements are met, we can move forward. If not, I will do everything in my power at the European level, also at the national level, politically and legally, to stop this decision," De Wever told reporters upon arrival at the summit.

De Wever called on all EU member states to share the costs of any legal action initiated by Russia and to contribute financially if the money ever had to be repaid. He also said that frozen Russian assets held by other countries should be part of the scheme.

"There must be transparency about the risk. There must be transparency about the legal basis for this decision," he said.

Russia has described the idea as an illegal seizure of assets and warned of retaliation.