EU faces ‘very important’ decisions this week on Ukraine funding: Kallas

BRUSSELS: The EU must take “very important” decisions on funding Ukraine at a crunch summit this week, but talks over using frozen Russian assets are getting harder, the bloc’s top diplomat said Monday.

“We are not there yet, and it is increasingly difficult, but we’re doing the work and we still have some days,” EU foreign policy chief Kaja Kallas told journalists.

“We will not leave the meeting before we get a result,” she added.

The European Union’s 27 leaders will gather in Brussels on Thursday to try to hammer out a plan to finance Kyiv for the coming years.

Key player Belgium – which hosts the vast bulk Russian central bank assets frozen in the bloc – has so far opposed a plan to tap the funds to provide a 90-billion-euro ($106-billion) “reparations loan” to Ukraine.

The move is backed by a raft of EU countries that argue it is the best way to help Ukraine plug looming budget shortfalls as Russia’s war nears the four-year mark, but several nations, including Italy, have said they share Belgium’s concerns.

The Belgian government fears it could be left facing crippling legal and financial reprisals from Russia over the move, and insists it wants watertight guarantees that other EU countries will share the risk.

The EU’s executive has laid out what it says is a “three-tier defence” to shield Belgium and international deposit organisation Euroclear, which holds the assets, but that so far has not broken the deadlock.

Russia’s central bank fired a shot across the bows last week by saying it was suing Euroclear.

The EU debate over using the frozen assets comes as the United States is pushing ahead with its efforts to end the Russia’s war in Ukraine.

European nations fear that Washington could seek to free up the assets under any deal to halt the fighting.