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How the reparations loan for Ukraine fell apart at the eleventh hour

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How the reparations loan for Ukraine fell apart at the eleventh hour

It was so bold that, at times, it seemed impossible — and in the end, it was.

The European Union’s attempt to channel the immobilised assets of the Russian Central Bank into a zero-interest reparations loan failed when the bloc’s 27 leaders, faced with a leap into the unknown, chose to support Ukraine’s resistance with the tried-and-tested method of joint debt.

“If you take money from (Russian President Vladimir) Putin, you are exposed,” said Belgian Prime Minister Bart De Wever, the chief opponent of the reparations loan, explaining its failure. “If you’re exposed, then people like certainty, and where can you find certainty? In charted waters.”

The bloc will now go to the markets to raise €90 billion on its own, without touching the €210 billion in Russian assets, which will remain immobilised until Moscow ceases its war of aggression and compensates Kyiv for the damages.

The choice means that there will be no reparations loan — and not what the European Commission had promised to Ukraine, a complex proposal that advocates thought ingenious and detractors said was foolhardy.

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Euronews has pieced together the events of the last four months to understand how and why the reparations loan spectacularly fell apart.

September: The pitch

The first appearance of the loan proposal dates back to 10 September, when European Commission President Ursula von der Leyen delivered her hour-long State of the EU speech in Strasbourg.

There she proposed using the cash balances from the immobilised Russian assets held in the EU to issue a reparations loan to support Ukraine. She did not provide any details at the time.

“This is Russia’s war. And it is Russia that should pay,” von der Leyen said. “It should not only be European taxpayers who bear the brunt.”

But it was not von der Leyen who would define what was about to become the most energy-consuming political debate of 2025. It was German Chancellor Friedrich Merz.

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A few days after von der Leyen’s speech, he published an opinion piece in the Financial Times that offered a full endorsement of the project, presenting it as a foregone conclusion despite its lack of precedent.

“That decision should, ideally, be unanimous,” he wrote. “Failing that, it should be adopted by the large majority of member states who are firmly committed to Ukraine.”

The so-called “Merz op-ed” caught diplomats and officials by surprise. Some saw it as yet another example of Germany exploiting its position as the largest member state to single-handedly set the agenda for the entire bloc.

Subsequently, the Commission put forward a two-page document that outlined, in highly theoretical terms, how the initiative would work in practice.

The chain of events triggered one country in particular.

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October: The pushback

Belgium holds the bulk of the Russian assets — about €185 billion — in central securities depository Euroclear, and felt it should have been adequately consulted before the Commission’s two-page proposal was circulated.

The Belgian resistance burst into the open in October when De Wever delivered a remarkably frank press conference in Copenhagen in which he argued the reparations loan would deprive the EU of its most powerful leverage vis-à-vis the Kremlin.

“The question now is: can we eat the chicken?” De Wever said. “The first problem, of course, is that you lose the golden eggs if you eat the chickens. You have to consider that. If you put the chicken on the table and you eat it, then you lose a golden egg.”

De Wever then delineated, one by one, his demands for the untested project: bulletproof legal certainty, full mutualisation of risks and real burden-sharing among all countries holding Russian sovereign assets.

He reiterated his concerns about the plan during a closely watched summit in mid-October, where leaders hoped to endorse the reparations loan. De Wever held his ground, and the meeting ended with a vague mandate tasking the Commission to design several “options” that could meet Ukraine’s financial and military needs for 2026 and 2027.

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Von der Leyen, however, seemed to interpret the mandate as an implicit affirmation of her bold idea, which she framed as the only viable option.

“There are points to be clarified and have a deep dive,” she said at the end of the summit. “We agreed on the what, that is, the reparations loan, and we have to work on the how, how we make it possible (and) what’s the best option to move forward.”

A few days later, the EU’s three Nordic leaders publicly ruled out issuing joint debt to support Ukraine. Danish Prime Minister Mette Frederiksen went as far as to declare that “for me, there is no alternative to the reparations loan”.

November: The shock

The inconclusive summit revealed that without Belgium’s consent, the reparations loan would not be possible. The Commission accelerated bilateral talks with De Wever’s team to address the sticking points and sketch out a landing zone.

On 17 November, von der Leyen sent leaders a letter detailing three options to raise €90 billion for Ukraine: bilateral voluntary contributions, joint debt and the reparations loan.

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“The options presented in this note are stark both in their design and in their implications. Clearly, there are no easy options,” she said.

The section devoted to the reparations loan was explicitly written to mitigate the Belgian concerns. It addressed two of De Wever’s key demands: providing “legally binding, unconditional, irrevocable and on-demand guarantees” and securing the participation of all EU and G7 countries holding Russian sovereign assets.

The letter also acknowledged the disadvantages of the reparations loan, warning of reputational damage to the eurozone and “knock-on effects” for its financial stability.

Just as diplomats were digesting von der Leyen’s matter-of-fact assessment, a hurricane swept through Europe: the now-infamous 28-point plan drafted by US and Russian officials to end the war in Ukraine that, among other things, proposed using the immobilised assets for the commercial benefit of both Washington and Moscow.

The plan incensed European leaders, who quickly closed ranks and emphasised that any issue within European jurisdiction would require full European involvement. Rather than weakening the case for the reparations loan, the 28-point plan seemed to strengthen it.

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But then, De Wever re-entered the scene with a strongly worded letter to von der Leyen describing her blueprint as “fundamentally wrong” and riddled with “multifold dangers”.

“Hastily moving forward on the proposed reparations loan scheme would have, as collateral damage, that we, as the EU, are effectively preventing reaching an eventual peace deal,” De Wever said in the most controversial segment of the letter.

His invective revealed the chasm that still existed between Belgium and the Commission, and raised the bar even higher for a compromise.

December: The collapse

Undeterred by De Wever’s castigations, von der Leyen forged ahead and unveiled the legal texts of the reparations loan in early December — just as the European Central Bank declined to provide a liquidity backstop for the measure.

The complex proposal, which diplomats said arrived too late in the process, further expanded the guarantees to protect Belgium, erected safeguards to nullify arbitration and created an “offset” mechanism to recoup any eventual losses.

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“We want to make very sure to all our member states, but specifically also to Belgium, that we will share the burden in a fair way, as it is the European way,” von der Leyen said.

This time, the pushback came from Euroclear itself, rather than De Wever. In a statement to Euronews, the depository decried the texts as “very fragile,” describing them as excessively experimental and liable to trigger an exodus of foreign investors from the eurozone.

As uncertainty over the project deepened, the leaders of Estonia, Finland, Ireland, Latvia, Lithuania, Poland and Sweden came together in its defence.

“In addition to being the most financially feasible and politically realistic solution, it addresses the fundamental principles of Ukraine’s right of compensation for damages caused by the aggression,” they wrote in a joint statement.

High-level Commission officials, from Kaja Kallas to Valdis Dombrovskis, echoed von der Leyen’s message and framed the reparations loan as the most credible option.

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The proposal was bolstered after member states, fearing a repeat of the 28-point plan, invoked an emergency clause to indefinitely immobilise the Russian assets, something that on paper could help alleviate one of Belgium’s most pressing concerns.

Yet the momentum proved to be short-lived.

In an unexpected twist, Italy, Bulgaria and Malta joined Belgium in urging the Commission to explore “alternative solutions” to finance Ukraine with “predictable parameters” and “significantly less risks”. Separately, Andrej Babiš, the newly appointed prime minister of the Czech Republic, called on the Commission to “find other ways”.

The reservations set the scene for the make-or-break summit on 18 December.

During the closed-door talks, officials worked to address all the outstanding Belgian concerns and unblock the reparations loan. But in the end, the effort backfired, instead laying bare the scope of commitment that governments were required to undertake.

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At one point, a compromise was floated: to provide “uncapped” guarantees and reimburse “all amounts and damages” stemming from the scheme.

The wording was too much for the sleep-deprived leaders: all of a sudden, they were staring down the prospect of bailing out the entire Belgian banking system.

Faced with mounting concessions and liabilities, leaders shelved the reparations loan and opted for joint debt.

“I knew beforehand that the enthusiasm for the reparations loan was not so big as people thought it would be,” De Wever said, suggesting that von der Leyen, while doing an “excellent job,” had been misled by Germany, the Nordics and the Baltic states.

“It turned out, as I knew it would, that many more countries that hadn’t spoken yet were extremely critical of all the financial aspects of it, finding out that a simple truth: there is no free money in the world. It just does not exist.”

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Riverside Church Trial: 2 Ex-Players Testify to Being Sexually Abused

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Riverside Church Trial: 2 Ex-Players Testify to Being Sexually Abused

Two more former college basketball players testified Friday to being sexually abused as teens by the multimillionaire coach of New York’s esteemed Riverside Church basketball program, echoing the allegations of their boyhood teammate Daryl Powell, who’s suing the church in a state Supreme Court civil court trial in Manhattan.

Former Riverside players Byron Walker and Mitchell Shuler both took the stand on the trial’s second day, frequently choking up as they described their experiences with Ernest Lorch, who built the church basketball program into a model for the massive modern youth sports industry—but died in 2012 with a reputation tarnished by abuse allegations.

Walker described a pair of incidents in which he alleged Lorch forced himself on the player, ostensibly to discipline him. One of the alleged assaults Walker described, detailed in a joint Rolling Stone and Sportico investigation, resulted in a criminal indictment against Lorch in Massachusetts in 2010. (Lorch never stood trial in the case because of his failing health.) On Friday, Walker told the six jurors and three alternates that during halftime of a game in Springfield, Mass., in 1977, Lorch “tried to penetrate me,” ostensibly while punishing him for being late for the team van.

The former player also went into detail about a second allegation during a tournament in Arizona, where, Walker said, Lorch threatened to prevent him from talking to a college recruiter because he broke curfew and was drinking with teammates. After issuing that threat, Walker said on the stand, Lorch forced him to pull down his pants and sexually assaulted him. “There’s this back and forth motion,” the former point guard at the University of Texas-El Paso testified, “like I was being raped.”

Walker’s testimony followed that of Mitchell Shuler, who played on the same late-1970s Riverside elite high-school-age travel teams with Walker and Powell. Shuler, whose play with Riverside helped him gain a scholarship to the University of New Orleans, broke down several times when describing Lorch’s use of a paddle to punish him for indiscretions ranging from not working hard in practice to struggling in a high school French class. “I got down on my knees, like a dog, and got hit,” said Shuler, who last year retired as a project manager at Harlem Hospital after a 40-year career. “My bare butt was exposed.”

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Shuler also described being stared at by Lorch while showering and enduring “jockstrap checks” in which the coach groped his testicles.

Both players were called as witnesses by attorneys for Powell, whose case is the first of 27 lawsuits filed against Riverside to go to trial under New York’s 2019 Child Victims Act. He alleges that Riverside was negligent in supervising Lorch over his 40-year run at the head of the basketball program, which ended in 2002 after the first public allegations of abuse by a former player.

But Shuler and Walker are also suing Riverside, which Riverside attorney Phil Semprevivo pointed out to the jury. Earlier in the day, Powell faced tough questions on cross-examination by Semprevivo, who sought to poke holes in his case against the church—including differences in the plaintiff’s trial testimony Thursday and an earlier sworn deposition in the case in 2023.

For example, Powell testified Thursday that Lorch “stroked” the player’s penis as part of jockstrap checks and inserted his finger in Powell’s anus. Semprevivo pointed out that Powell never used those terms or descriptions at any point in his earlier deposition.

He also questioned Powell’s stated rationale for quitting basketball completely after a successful junior season at Marist College in 1982. On Thursday, Powell emphasized that he quit Marist with a year left on his full scholarship because he was “fed up” with the sport after his history with Riverside. Semprevivo pointed to other deposition testimony that Powell said he quit school to be with his future wife. Under questioning Friday, Powell said both reasons factored in his decision.

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The former player also said some discrepancies in his testimony were a result of his diminished hearing. But Semprevivo, pointing out several contradictions or inaccuracies on things like dates, said Powell had ample opportunity to correct the deposition record and failed to do so.

One such instance: Powell said in his deposition that he never mentioned being abused by Lorch to any Riverside assistant coaches, including Kenny “Eggman” Williamson, who died in 2012. But in his trial testimony, Powell gave a detailed account of telling Williamson that Lorch was looking down his shorts and paddling him. Powell testified that he remembered it vividly because, he said, he told Williamson on the day of the infamous, riot-plagued 1977 New York City blackout.

Powell said on Thursday that Williamson told him, “If you know what I know, you better not say anything, or you’re not playing for this team anymore.”

Powell continued: “I was devastated. I shut my mouth up. I wanted to stay on the team.”

Semprevivo pointed out on Friday that Powell signed a statement in 2024 that corrected some errors in his deposition, but never amended his statement that he’d never said anything to Williamson.

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UAE cuts funding for citizens studying at UK universities over campus radicalization fears: report

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UAE cuts funding for citizens studying at UK universities over campus radicalization fears: report

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The United Arab Emirates (UAE) is removing funding for its citizens to study in the United Kingdom, citing concerns they could be radicalized abroad. 

The move means the UAE has removed British universities from a list of higher education institutions eligible for state scholarships amid growing tensions over London’s decision not to designate the Muslim Brotherhood as a terrorist organization, The Financial Times reported. 

“[The UAE] don’t want their kids to be radicalized on campus,” a person directly involved with the decision told the outlet. 

UNIVERSITY OF FLORIDA ORDERED TO REINSTATE LAW STUDENT WHO WAS EXPELLED AFTER ANTI-JEWISH COMMENTS

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A “Welcome to the People’s University for Palestine” banner at King’s College at the University of Cambridge May 11, 2024, in Cambridge, U.K.  (Mark Kerrison/In Pictures via Getty Images)

Since then, Emirati students who have applied to their government for scholarships to study in the U.K. have been denied. 

The move also means that the UAE will not recognize qualifications from academic institutions that are not on its accredited list, rendering degrees from U.K. universities less valuable than others, according to the report. 

NYC STUDENTS EXPOSE ‘EXTREMIST’ PROFESSORS FOSTERING CAMPUS ANTISEMITISM AT MAJOR UNIVERSITIES

The skyline in Abu Dhabi, United Arab Emirates, where funding for its citizens to study in the United Kingdom has been halted.  (Vidhyaa Chandramohan/Bloomberg via Getty Images)

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“All forms of extremism have absolutely no place in our society, and we will stamp them out wherever they are found,” Prime Minister Keir Starmer’s office said in a statement. “We offer one of the best education systems in the world and maintain stringent measures on student welfare and on-campus safety.”

The UAE has taken a hardline approach to Islamist movements abroad and at home. 

During the 2023-24 school year, 70 students at U.K. universities were reported for possible referral to the government’s deradicalization program, the report states. 

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UAE President Sheikh Mohammed bin Zayed al-Nahyan has repeatedly questioned the U.K.’s decision to declare the Muslim Brotherhood a terrorist organization. 

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Starmer’s administration last year said the matter was under “close review.”

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Russia-Ukraine war: List of key events, day 1,416

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Russia-Ukraine war: List of key events, day 1,416

These are the key developments from day 1,416 of Russia’s war on Ukraine.

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Here is where things stand on Saturday, January 10:

Fighting:

  • The death toll from a massive Russian attack on Ukraine’s capital Kyiv that began on Thursday night has risen to four, the Ukrainian State Emergency Service wrote in an update shared on Facebook on Friday. At least 25 people were also injured, including five rescuers, the service added.
  • The attack left thousands of Kyiv apartments without heat, electricity and water as temperatures fell to minus 10 degrees Celsius (14 degrees Fahrenheit) on Friday, Kyiv Mayor Vitali Klitschko and other local officials said.
  • Klitschko called on people to temporarily leave the city, saying on Telegram that “half of apartment buildings in Kyiv – nearly 6,000 – are currently without heating because the capital’s critical infrastructure was damaged by the enemy’s massive attack”.
  • Russian forces shelled a hospital in the Ukrainian city of Kherson just after midday on Friday, damaging the intensive care unit and injuring three nurses, the regional prosecutor’s office wrote on Telegram.
  • “As a result of the attack, three nurses aged 21, 49, and 52 were wounded. At the time of the shelling, the women were inside the medical facility,” the office said in a statement.
  • The head of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus, condemned attacks on healthcare in Ukraine in a statement shared on X, saying that there had been nine attacks since the beginning of 2026, killing one patient, one medic and injuring 11 others, including healthcare workers and patients.
  • Tedros said that the attacks further “complicated the delivery of health care during the winter period” and called for “the protection of health care facilities, patients and health workers”.
  • Russian forces attacked two foreign-flagged civilian vessels with drones in Ukraine’s southern Odesa region, killing a Syrian national and injuring another, Ukraine’s Deputy Prime Minister Oleksii Kuleba and other officials said on Friday.
  • A Ukrainian drone attack on a bus in Russia’s Belgorod region injured four people, the regional task force reported, according to Russia’s TASS state news agency.
  • Russian forces seized five settlements in Ukraine’s Zaporizhia region, including Zelenoye, the Russian Ministry of Defence said, according to TASS.
  • Ukrainian battlefield monitoring site DeepState said on Friday that Russian forces advanced in Huliaipole and Prymorske in the Zaporizhia region, but did not report any further changes.
  • Ukrainian President Volodymyr Zelenskyy said on Friday that Russia’s Oreshnik missile strike late on Thursday was “demonstratively” close to Ukraine’s border with the European Union.
  • The International Atomic Energy Agency has begun consultations to establish a temporary ceasefire zone near Ukraine’s Zaporizhzhia nuclear power plant after military activity damaged one of two high-voltage power lines, Director General Rafael Mariano Grossi said in a statement on Friday.

Sanctions

  • US forces seized the Olina oil tanker and forced it to return to Venezuela so its oil could be sold “through the GREAT Energy Deal”, United States President Donald Trump said in a post on Truth Social on Friday. According to The Associated Press news agency, US government records showed that the Olina had been sanctioned for moving Russian oil under its prior name, Minerva M.
  • Ukraine’s ambassador to the US, Olha Stefanishyna, said that Ukrainian nationals were among members of the crew of the Russian-flagged tanker Marinera seized earlier this week by US forces over its links to Venezuela, according to Interfax Ukraine news agency.
  • The Russian Foreign Ministry separately said on Friday that the US had released two Russian crewmembers from the Marinera, expressing gratitude to Washington for the decision and pledging to ensure the return home of crewmembers.

Politics and diplomacy

  • Qatar’s Ministry of Foreign Affairs expressed “deep regret” over damage to its embassy in Kyiv, confirming that no diplomats or staff were hurt, in a statement on Friday. The ministry underscored the importance of protecting diplomatic buildings and reiterated its call for a “resolution to the Russian-Ukrainian crisis through dialogue and peaceful means”.
  • British Defence Secretary John Healey said that the United Kingdom was allocating 200 million pounds ($270m) to fund preparations for the possible deployment of troops to Ukraine, during a visit to Kyiv on Friday.
  • The leaders of Britain, France and Germany described Russia’s use of an Oreshnik intermediate-range ballistic missile in western Ukraine as “escalatory and unacceptable”, according to a readout of their call released by Prime Minister Keir Starmer’s office on Friday.
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