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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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Fake Euronews website targets Hungary election with false claims

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Fake Euronews website targets Hungary election with false claims

A fake Euronews-style article and website claiming that Hungary’s opposition leader Péter Magyar insulted Donald Trump is circulating online as part of a wider campaign researchers have linked to Storm-1516, a Russian disinformation operation.

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The article, which utilises a real byline and appeared on a fake Euronews website that has since been taken down, claims that Magyar delivered a blistering critique of Trump at a campaign rally.

Among other false claims, the article says Magyar called Trump a “senile grandpa” and promised to undo “key agreements” made with the US, should Magyar win parliamentary elections in Hungary scheduled on 12 April.

The article’s contents are fabricated and the website it appeared on have no connection to Euronews.

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A video report that repeats the claim using Euronews’ branding is also circulating on social media. The Cube, Euronews’ fact-checking team, found examples of this clip circulating since Monday evening, some with thousands of views.

The videos were posted by accounts with similar captions in quick succession, implying they are part of a coordinated campaign. The accounts that posted the clip were largely anonymised, with X’s location tool showing they are based in the US and Africa.

Researchers at Antibot for Navalny, a collective that tracks Russian bot networks online, told The Cube that the post was part of Storm-1516, a prolific Russian disinformation campaign that spreads claims online that further the interests of the Russian government.

The group are typically active during election campaigns, having spread false claims about Democratic Party candidates in the 2024 US presidential election and during Germany’s February 2025 elections.

In December, Germany’s Foreign Minister summoned the country’s Russian ambassador over allegations of repeated Russian hybrid attempts in Germany including allegations that Storm 1516 actively spread disinformation during the country’s general elections.

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At the time, the campaign focused on Chancellor candidate for the Greens, Robert Habeck, and current German Chancellor Friedrich Merz.

Hungary’s upcoming parliamentary elections will see Magyar’s Tisza Party pitted against current Hungarian Prime Minister Viktor Orbán.

Magyar has accused Hungary’s secret service of targeting his party’s campaign systems just weeks before the election date in a hostile election campaign in which polls suggest his party is ahead.

Orbán, meanwhile, has become embroiled in scandal in Brussels after a Washington Post investigation revealed Foreign Minister Péter Szijjártó regularly leaked sensitive information from high-level European Union meetings to Moscow.

Orbán has maintained close ties to the Kremlin despite the resistance of other European leaders and has utilised Hungary’s veto power to block key decisions on European aid to Ukraine.

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Reuters: Iran toughens negotiating stance amid mediation efforts

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Reuters: Iran toughens negotiating stance amid mediation efforts
Iran’s negotiating posture has hardened sharply since the war began, with the Revolutionary ‌Guards exerting growing influence over decision-making, and it will demand significant concessions from the United States if mediation efforts lead to serious negotiations, three senior sources in Tehran said.

In any talks with the U.S., Iran would not only demand an end to the war but concessions that are likely red lines for U.S. President Donald Trump – guarantees against future military action, compensation for wartime losses and formal control of the Strait of Hormuz, the sources said.


Iran would also refuse to negotiate any limitations to its ballistic missile programme, they said, an issue that had been a red line for Tehran during the talks that were taking place when the U.S. and Israel launched their attack last month.

Reuters

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Who actually runs Iran right now? The key power players as Trump claims talks to ‘top’ official

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Who actually runs Iran right now? The key power players as Trump claims talks to ‘top’ official

NEWYou can now listen to Fox News articles!

“Nobody knows who to talk to,” President Donald Trump said Tuesday at the White House, describing what he portrayed as both chaos and opportunity inside Iran’s leadership. “But we’re actually talking to the right people, and they want to make a deal so badly.” 

His remarks come as the U.S. claims it is engaged in talks with a “top” Iranian figure, even as Tehran publicly denies negotiations are taking place.

The question now is not just whether talks are happening, but whether anyone in Tehran has the authority to deliver. With strikes on senior Iranian leadership and growing internal fractures, Iran appears to be operating less like a centralized theocracy and more like a wartime system run by overlapping power centers, with the Islamic Revolutionary Guard Corps (IRGC) at its core.

Here’s who matters now.

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TRUMP’S MIDDLE EAST ENVOY REVEALS WHAT LED TO BREAKDOWN IN IRAN TALKS BEFORE OPERATION EPIC FURY

A State Department Rewards for Justice poster offers up to $10 million for information on key leaders tied to Iran’s Islamic Revolutionary Guard Corps (IRGC), including Mojtaba Khamenei, Ali Asghar Hejazi, Yahya Rahim Safavi, Ali Larijani, Eskandar Momeni and Esmail Khatib. (State Department / Rewards for Justice)

The IRGC: The real power behind the state

Across intelligence assessments and recent reporting, one conclusion is consistent: the Islamic Revolutionary Guard Corps has emerged as the dominant force in Iran’s political system.

Behnam Ben Taleblu, senior fellow at the Foundation for Defense of Democracies, said the current moment is accelerating a long-standing trend. 

“No doubt both the 12-Day war and this current conflict have trimmed the commanding heights of the Islamic Republic’s political and military leadership,” he said.  “But it has also expedited the trend lines inherent in Iranian politics, which is the dominance of the security forces and the ascendance of the IRGC.”

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“Yes, there is more IRGC control over the state than ever before, but the state is weaker than ever before and more of a national security rump state than ever before,” he said. 

“It shouldn’t particularly preoccupy Washington, who is and isn’t offering negotiations,” Ben Taleblu added, “The preeminent preoccupation of Washington has to be working toward a military win at a political win, and that does not come by working with the IRGC, but actually beating them on the battlefield and supporting the forces’s most arrayed against them in Iran, which are the Iranian people.”

Islamic Revolutionary Guard Corps (IRGC) military personnel are walking along Enghelab (Revolution) Avenue as an Iranian Kheibar Surface-to-Surface missile is being unveiled during the Ela Beit Al-Moghaddas (Al-Aqsa Mosque) military rally in Tehran, Iran, on November 24, 2023. The IRGC is unveiling two new missiles during the rally.  (Morteza Nikoubazl/NurPhoto via Getty Images)

The command room: Supreme National Security Council

If the Islamic Revolutionary Guard Corps is the power in Iran, the Supreme National Security Council appears to be the mechanism through which that power is exercised.

The Supreme National Security Council is Iran’s top forum for coordinating military and foreign policy, bringing together senior Islamic Revolutionary Guard Corps commanders and government officials under the authority of the supreme leader. It was established after the 1979 revolution and has played a central role in managing major crises, from nuclear negotiations to wartime operations.

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Iran appointed Mohammad Bagher Zolghadr, a former Islamic Revolutionary Guard Corps commander, as secretary of the council, reinforcing its central role in coordinating military and political decisions, Reuters reported Tuesday.

A Middle Eastern official source with knowledge of the system described the structure:

“Right now, the power is in the hands of the IRGC,” the source said. “The Supreme National Security Council makes the decisions, of course, with the backing of the majority of IRGC commanders.”

A mourner holds a poster depicting Ayatollah Mojtaba Khamenei, right, the successor to his late father, Ayatollah Ali Khamenei, left, as supreme leader, during the funeral procession for senior Iranian military officials and civilians killed during the campaign in Tehran, Iran, March 11, 2026. (Vahid Salemi/AP Photo)

Mojtabā Khamenei: The supreme leader in name

Formally, Iran’s system centers on Supreme Leader Mojtaba Khamenei. But his actual grip on power remains uncertain.

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Khamenei inherited the position’s sweeping authority following his father’s death, but “lacks the automatic authority enjoyed by his father,” the Middle Eastern official said.

Moreover, he has not appeared publicly since taking power and only has issued written statements, raising questions about both his health and his ability to govern, after reportedly being injured in the initial Feb. 28 U.S.-Israeli strikes that killed his father and other senior Iranian leaders.

Brig. Gen. (res.) Yossi Kuperwasser, head of the Jerusalem Institute for Strategy and Security, suggested his role may currently be limited: “For the time being, since Mojtaba has been injured, it seems he’s a hologram and not holding power. However, if Mojtaba recovers, he will be involved in ruling Iran. He is not just a figurehead. But anyhow, for the time being, the control of Iran is in the hands of the revolutionary guards.”

WITH DOGS, DANCE AND UNCOVERED HAIR, IRANIANS DEFY ‘UNHOLY ALLIANCE’ OF SOCIALISTS, RADICALS: ‘HYPOCRITES!’

Ghalibaf: The man at the center of Trump’s claim

Iranian Parliament Speaker Mohammad Bagher Ghalibaf speaks during a public event in Iran in 2024 (Hossein Beris / Middle East Images / Middle East Images via AFP)

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Trump’s statement that he is speaking to a “top person” has focused attention on one name in particular: Mohammad Bagher Ghalibaf.

The White House is quietly exploring Ghalibaf as a potential interlocutor and even a possible future leader, Axios reported.

A former Islamic Revolutionary Guard Corps commander and current parliament speaker, Ghalibaf represents a hybrid figure inside the system, bridging military credentials and political authority.

He was one of the key security figures involved in the crackdown on student protests in July 1999 and has run for president four times since 2005.

IRAN WAR, 11 DAYS IN: US CONTROLS SKIES, OIL SURGES AND THE REGION BRACES FOR WHAT’S NEXT

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Ghalibaf is expected to meet U.S. special envoys Steve Witkoff and Jared Kushner in the capital of Pakistan as early as the end of this week.

Ben Taleblu said: “Those who see the ascendants of someone like Ghalibaf, who is an IRGC veteran, having extended power outside his traditional civilian rule, have missed the decades of how personality, not profession, has been the driving force, has been a driving force in Iranian politics for the past few decades. I would also say those who worry about the IRGC background of the Supreme National Security Council are all that in Iran today, may have missed the fact that the past few Supreme National Security Council Secretaries, Shamkhani, Larijani, Ahmadian, all also had IRGC backgrounds.”

At the same time, Ghalibaf has publicly denied engaging in talks with the United States, and no direct confirmation of negotiations has been provided by either side.

Araqchi: The diplomat carrying messages

Iran’s Foreign Minister Abbas Araghchi attends a joint press conference with Russian Foreign Minister following their talks in Moscow on April 18, 2025. (Getty Images)

Foreign Minister Abbas Araqchi remains one of the most visible figures internationally.

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If talks were to take place, Araqchi likely would be part of the Iranian delegation alongside Ghalibaf, Reuters reported.

But analysts caution that his role is limited. He may act as a channel for communication, but does not set policy independently. 

Strategic decisions, particularly on war and negotiations, are still shaped by the Islamic Revolutionary Guard Corps and the broader security establishment.

Iranian President Masoud Pezeshkian, Gholam-Hossein Mohseni-Eje’i, the head of the judiciary and Alireza Arafi, deputy chairman of the Assembly of Experts, attend the meeting of the interim leadership council of Iran in an unknown location, amid the U.S.-Israel conflict with Iran, in Iran, March 1, 2026.  (IRIB/WANA (West Asia News Agency)/Handout via Reuters)

The wider power circle: generals, clerics and enforcers

Beyond the headline figures, a broader group of officials who continue to shape Iran’s direction can be identified.

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These include Islamic Revolutionary Guard Corps chief Ahmad Vahidi, Quds Force commander Esmail Qaani, naval commander Alireza Tangsiri, Judiciary Chief Gholamhossein Mohseni-Ejei, President Masoud Pezeshkian, and senior clerical and political figures such as Saeed Jalili and Ayatollah Alireza Arafi.

Each represents a different pillar of the system: military power, regional proxy operations, control of strategic waterways, internal repression and religious legitimacy.

Together, they form what analysts describe as a fragmented but resilient governing network.

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A billboard depicting Iran’s supreme leaders since 1979: (L to R) Ayatollahs Ruhollah Khomeini (until 1989), Ali Khamenei (until 2026), and Mojtaba Khamenei (incumbent) is displayed above a highway in Tehran on March 10, 2026. Iran marked the appointment of Ayatollah Mojtaba Khamenei to replace his father as its supreme leader on March 9, 2026.  (AFP/Via Getty Images)

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Despite internal divisions, Iran’s leadership remains united on one core objective: survival of the regime.

Kuperwasser described the split: “There are the more pragmatic elites, like Araghchi, Rouhani, and Zarif. There are also the hardliners who have usually held the upper hand … But they are united in one issue — that the regime should survive and stay in power.”
Iran’s U.N. mission did not respond to a request for comment in time for publication. 

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