The leaders of the European Union have reached a deal on providing Ukraine with a loan of €90 billion (£79bn; $105bn) with no interest. The agreement has been reached following successful negotiations at a summit in Brussels, following failed talks on how to utilize frozen assets belonging to Russian banks. The EU has been unable to reach a deal on how to utilize assets.
Ukraine Struggles with Crucial Money Shortage During Wartime Situation
Ukrainian President Volodymyr Zelenskyy has also repeatedly expressed that Ukraine has months before running out of money. Therefore in absence of financial aid, Ukraine would have to decrease production of drones which emphasizes the imperative regarding the loan required for funding Ukraine.
Plan for Frozen Russian Assets Dropped
Earlier, the European Commission had recommended that the frozen Russian Central Bank properties be used as funding for a major loan that could be accessed jointly with the EU budget. This was after disagreements arose regarding the liability for the guarantee, especially in Belgium where most of the frozen properties lie. Consequently, the EU leaders decided that the major loan be accessed through borrowing.
European Countries Comment on Loan Decision For Ukraine
“This decision prevented a scenario of chaos and division in the EU,” Belgian Prime Minister Bart De Wever said, adding, “We stood united.” German Chancellor Friedrich Merz, who had been a proponent of a frozen asset approach, made it clear that the loan package “sends a clear signal to President Putin.”
Ukraine Loan Repayment Condition
According to Merz, Ukraine will repay the loan only if it gets war reparations from Russia. The EU has also kept the right to repay the loan using frozen Russian funds in case Russia fails to compensate Ukraine.
EU Leaders Confirm Unity and Commitment to Ukraine
The EU Head Antonio Costa announced on social media, “We committed, we delivered,” to emphasize the EU’s commitment to Ukraine with the loan supported by the EU’s Common Budget. This is a crucial economic lifeline while sidestepping any disunity between EU countries.
French President Macron Urges Re-engagement With Russia
In other news, French President Emmanuel Macron proposed that France should “re-engage” with Russian President Vladimir Putin in the coming weeks in an effort to explore other diplomatic channels that would benefit both Europe and Ukraine.
US-Russia Peace Talks Scheduled as Ukraine Seeks Security Guarantees
Amid the announcements of the EU loan, there are expected to be meetings between US and Russian officials in the city of Miami over peace plan talks. This is according to Zelensky who confirmed that there were to be talks on Friday and Saturday between the delegations of Ukraine and the US.
EU Loan Saves Ukraine During Country’s Economic and Military Struggle It has been estimated that Ukraine will require an additional €135 billion in funding over the next two years to be financially solvent. This loan assistance of €90 billion to Ukraine represents extremely vital support that will enable it to meet its challenges in the days to come.
Also Read: Who Was Sharif Osman Hadi & Why Was He Targeted in Dhaka? Yunus Calls for Calm, Orders Swift Probe