DUBLIN — The European Union is very close to a solution to finance Ukraine in 2026 and 2027 that would have the support of at least a qualified majority of EU countries, the chairman of EU summits, Antonio Costa, said on Tuesday (Dec 9).
EU leaders pledged on Oct 23 to bankroll Kyiv for the next two years as Ukraine fights off a Russian invasion and as US financial contributions are drying up.
The leaders are to decide at a summit on Dec 18 in Brussels how to deliver on their pledge and Costa told reporters in Dublin he would keep them talking for days, if necessary, until they reach an agreement.
Since most EU governments struggle with large public debts, the preferred way for them to finance Ukraine's defence is to put to work some 210 billion euros (S$316 billion) of Russian sovereign assets immobilised in Europe after Moscow invaded Ukraine in 2022.
Despite the political momentum, the project is not simple because Belgium, where most of the frozen assets are held, wants guarantees from other EU countries they would share any financial repercussions if Russia were to successfully sue Belgium over the scheme.
Discussions to give Belgium the guarantees are under way and will come to a head at the summit — the European Council.
"Now we are working on fine-tuning the legal and technical solution that could obtain the agreement of at least a qualified majority of member states. I think we are very close to obtaining a solution," Costa said.
"For me, it's sure that on the 18th of December we will take a decision. But as I shared with my colleagues, if it's necessary, we will continue on the 19th or the 20th of December — until we reach a positive conclusion," Costa said.
Keeping Ukraine financed and fighting is key for the EU because the bloc sees Russia's invasion of Ukraine as a threat to its own security. Most EU countries believe that as long as Moscow is militarily engaged in Ukraine it will not attack any EU countries, giving Europe time to prepare its defence.
The Commission wants to issue a Reparations Loan to Ukraine of up to 165 billion euros, by asking all institutions in EU countries holding Russian cash to exchange it for EU triple-A bonds issued by the Commission. The cash would then go to Ukraine in installments over the next two years.
To spread the risk of Russian retaliation, Belgium wants other G7 countries holding Russian sovereign assets, such as Britain, Canada or Japan, to replicate the EU scheme.
British Prime Minister Keir Starmer said on Nov 25 that London was ready to move with the EU on providing financial support to Ukraine based on the value of immobilised assets.
The Guardian newspaper reported on Monday that London was prepared to hand over 8.0 billion pounds (S$13.49 billion) of assets frozen in Britain to support Ukraine.
Canada said in October it would explore such an option. Japan has not specified what steps it would take to support Ukraine, while denying a media report it had rebuffed a European Union request to join plans to use frozen Russian assets.
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