EU agrees to indefinitely freeze Russian blockets, removing obstacle to Ukraine loan

BRUSSELS, Dec 12 (Reuters) – The European Union agreed on Friday to indefinitely freeze Russian central bank blockets held in Europe, removing a big obstacle to using the cash to help Ukraine defend itself against Russia.

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PLANNED LOAN TO UKRAINE

The loan would be paid back by Ukraine only when Russia pays Kyiv war damages, making the loan effectively a grant that advances future Russian reparations payments.

EU leaders – the European Council – are to meet on December 18 to finalise details of the reparations loan and resolve remaining problems, which include guarantees from all EU governments for Belgium that it would not be left alone to foot the bill should a potential Moscow lawsuit prove successful.

Before that, Ukrainian President Volodymyr Zelenskiy will visit Berlin for talks with German Chancellor Friedrich Merz on Monday, with further European, EU and NATO leaders joining them later, the German government said.

Ukrainian Prime Minister Yulia Svyrydenko, writing on X social platform in English, praised the decision as a “landmark step toward justice and accountability”.

“This decision strengthens the foundation for the reparations loan mechanism and brings us closer to a future in which Russia pays for its crimes and destruction caused,” she wrote.

Germany sees no alternative to the reparations loan and would provide 50 billion euros in guarantees, European diplomatic sources said.

Danish Finance Minister Stephanie Lose, whose country holds the rotating EU presidency, told reporters “some worries” still needed to be addressed but “hopefully we’ll be able to pave the way towards a decision at the European Council next week.”

RUSSIAN CENTRAL BANK SAYS IT’S SUING EUROCLEAR

Hungary would do all it could to “restore a lawful state of affairs,” he said.

The bank also said it was suing the Brussels-based central securities depository Euroclear – which holds 185 billion euros of the total blockets frozen in Europe – in a Moscow court over what it said were damaging actions, affecting its ability to dispose of its funds and securities.

Euroclear has been subject to Russian lawsuits in Moscow courts since the EU froze the blockets in 2022.

EU ACCESSION TALKS

The Financial Times reported that Ukraine could join the EU by January 1, 2027 under proposals being discussed in U.S.-mediated talks on ending the war.

Talks on EU accession, a long-held goal for Kyiv as it seeks to move further out of Moscow’s orbit, usually take many years.

A European diplomat briefed on the plan said Ukrainian accession would be “extremely difficult” to achieve by 2027 and that it was not clear whether the EU leadership backed this.

Several other European officials and diplomats said the target date was “absolutely impossible.”

($1 = 0.8524 euros)

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