EU Plans $50 Billion Ukraine Loan Using Frozen Russian Assets, Circumventing Hungarian Opposition

Date:

According to a report from the Financial Times on Monday, the European Union has devised a strategy to secure a $50 billion loan for Ukraine by utilizing profits from frozen Russian assets. This initiative, as detailed by the EU’s top diplomat Josep Borrell and corroborated by other sources, effectively sidesteps Hungary’s objections to legislation permitting the EU to transfer interest accrued from Russian funds directly to Ukraine.

Thank you for reading this post, don't forget to subscribe!

In an interview with the Financial Times, Borrell emphasized that since Hungary had opposed the EU’s initial agreement on transferring revenues to Ukraine, it should not influence the decision regarding the use of these funds. Describing the EU’s approach as “sophisticated but legally sound,” Borrell acknowledged that it challenges established norms.

Following the escalation of the Ukraine conflict, Western nations froze approximately $300 billion in Russian sovereign assets, with the majority—around $280 billion—trapped within EU jurisdictions.

Earlier this year, Brussels proposed redirecting interest earned on these assets to procure weapons for Ukraine, a move met with resistance from Hungary. As a vocal critic of Western policies towards Ukraine, particularly regarding military aid to Kiev, Hungary stood in opposition.

Under the new arrangement led by the United States, profits generated by Russia’s frozen assets starting next year will be allocated towards repaying the loan for Ukraine. Officials familiar with the matter indicated to the Financial Times that the legal mechanism enabling the EU to access Russian assets is expected to ensure the loan’s disbursement.

Despite this workaround, Hungary retains the ability to block EU decisions to extend sanctions on Russian funds, which require renewal every six months by all 27 EU member states.

To address Hungary’s concerns, the EU proposed a compromise wherein Hungary’s share of EU funds would not contribute to supporting Ukraine, encompassing not only lethal weapons but all forms of aid. However, Budapest rejected this proposal.

Moscow has condemned the EU’s decision to transfer profits from Russian assets to Ukraine as a clear act of illegal “expropriation,” highlighting ongoing tensions surrounding the conflict and its economic repercussions.

David Okafor
David Okaforhttp://naija247news.com
David Okafor Foreign Affairs Editor, Naija247news Media Group David Okafor is the Foreign Affairs Editor at Naija247news Media Group, with over five years of experience in international journalism. He excels in delivering insightful and impactful coverage of global politics and economic trends. Holding a degree in International Relations, David is known for his investigative skills and editorial leadership. His work ensures Naija247news provides accurate and comprehensive analysis of world events, earning him respect in the media industry.

Share post:

Subscribe

Popular

More like this
Related

NAFDAC Refutes Claims That Nearly All Paracetamol Sold in Nigeria Are Under-dosed

July 18, 2024. Azonuchechi Chukwu. The National Agency for Food and...

Nigerian couple welcomes third set of twins in four years

July 18, 2024. Azonuchechi Chukwu. A Nigerian couple, Kingsley and Chinwe...

Delta Enrolls More Than 2m Persons into Health Insurance Scheme

July 18, 2024. Azonuchechi Chukwu. Delta State Government says it has...

FG to Construct 6-Lane Super Highway Connecting 5 States, FCT – Umahi

July 18, 2024. Azonuchechi Chukwu. Minister of Works, Senator David Umahi,...
× How can I help you?