World
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.
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.
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.
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.
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.
“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.
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.
“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.
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.
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.”
World
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World
State Dept authorizes non-essential US Embassy personnel in Jerusalem to depart ahead of possible Iran strikes
Deadline looms for Iran-US nuclear deal
U.S.-Iran nuclear talks intensify in Switzerland as President Trump’s deadline approaches. Vice President JD Vance states there’s ‘no chance’ of endless war in the Middle East.
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The State Department is allowing non-essential personnel working at the U.S. Embassy in Jerusalem to leave Israel ahead of possible strikes on Iran. The embassy announced the decision early Friday morning and said that “in response to security incidents and without advance notice” it could place further restrictions on where U.S. government employees can travel within Israel.
The decision came after meetings and phone calls through the night Thursday into Friday, according to The New York Times, which reviewed a copy of an email that U.S. Ambassador to Israel Mike Huckabee sent to embassy workers.
The Times reported that the ambassador said in his email that the move was a result of “an abundance of caution” and that those wishing to leave “should do so TODAY.” He reportedly urged them to look for flights out of Ben Gurion Airport to any destination, cautioning that the embassy’s move “will likely result in high demand for airline seats today.”
The U.S. has authorized non-essential embassy personnel to leave Israel amid escalating tensions with Iran. (Al Drago/Bloomberg via Getty Images; Iranian Leader Press Office/Anadolu via Getty Images)
In the email, Huckabee also said that there was “no need to panic,” but he underscored that those looking to leave should “make plans to depart sooner rather than later,” the Times reported.
“Focus on getting a seat to anyplace from which you can then continue travel to D.C., but the first priority will be getting expeditiously out of country,” Huckabee said in the email, according to the Times.
Former Arkansas Gov. Mike Huckabee, U.S. President Donald Trump’s nominee to be ambassador to Israel, arrives to testify during his Senate Foreign Relations Committee confirmation hearing at the Dirksen Senate Office Building on Mar. 25, 2025, in Washington, D.C. (Kevin Dietsch/Getty Images)
TRUMP MEETS NETANYAHU, SAYS HE WANTS IRAN DEAL BUT REMINDS TEHRAN OF ‘MIDNIGHT HAMMER’ OPERATION
The embassy reiterated the State Department’s advisory for U.S. citizens to reconsider traveling to Israel and the West Bank “due to terrorism and civil unrest.” Additionally, the department advised that U.S. citizens not travel to Gaza because of terrorism and armed conflict, as well as northern Israel, particularly within 2.5 miles of the Lebanese and Syrian borders because of “continued military presence and activity.”
It also recommended that U.S. citizens not travel within 1.5 miles of the Egyptian border, with the exception of the Taba crossing, which remains open.
“Terrorist groups, lone-actor terrorists and other violent extremists continue plotting possible attacks in Israel, the West Bank, and Gaza. Terrorists and violent extremists may attack with little or no warning, targeting tourist locations, transportation hubs, markets/shopping malls, and local government facilities,” the embassy said in its warning. “The security environment is complex and can change quickly, and violence can occur in Israel, the West Bank, and Gaza without warning.”
Israeli and U.S. flags are placed on the road leading to the U.S. consulate in the Jewish neighborhood of Arnona, on the East-West Jerusalem line in Jerusalem, May 9, 2018. (Corinna Kern/picture alliance via Getty Images)
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While the embassy did not specifically mention Iran in its warning, it referenced “increased regional tensions” that could “cause airlines to cancel and/or curtail flights into and out of Israel.”
Fox News Digital reached out to the State Department and the White House for comment on this matter.
World
Has India’s influence in Afghanistan grown under the Taliban?
Pakistan has accused Afghanistan’s Taliban of serving as a “proxy” for India, amid escalating hostilities between Islamabad and Kabul.
Just hours after Pakistan bombed locations in Kabul early on Friday, Pakistan’s Minister of Defence Khawaja Asif wrote on X that after NATO forces withdrew from Afghanistan in July 2021, “it was expected that peace would prevail in Afghanistan and that the Taliban would focus on the interests of the Afghan people and regional stability”.
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“However, the Taliban turned Afghanistan into a colony of India,” he wrote and accused the Taliban of “exporting terrorism”.
“Pakistan made every effort, both directly and through friendly countries, to keep the situation stable. It carried out extensive diplomacy. However, the Taliban became a proxy of India,” he alleged as he declared an “open war” with Afghanistan.
This is not the first time that Asif has brought India into tensions with Afghanistan.
Last October, he alleged: “India wants to engage in a low-intensity war with Pakistan. To achieve this, they are using Kabul.”
So far, Asif has presented no evidence to back his claims and the Taliban has rejected accusations that it is being influenced by India.
But India has condemned the Pakistani military’s recent actions in Afghanistan, adding to Islamabad’s growing discernment that its nuclear rival and the Taliban are edging closer.
Earlier this week, after the Pakistani military carried out air raids inside Afghanistan on Sunday, India’s Ministry of External Affairs said in a statement that New Delhi “strongly condemns Pakistan’s airstrikes on Afghan territory that have resulted in civilian casualties, including women and children, during the holy month of Ramadan”.
After Friday morning’s flare-up between Pakistan and Afghanistan, India’s foreign ministry spokesperson Randhir Jaiswal again said New Delhi “strongly” condemned Pakistan’s air strikes and also noted that they took place on a Friday during the holy month of Ramadan.
“It is another attempt by Pakistan to externalise its internal failures,” Jaiswal said in a statement on X.
Has India’s influence in Afghanistan grown under the Taliban and what is India’s endgame with Afghanistan?
Here’s what we know:
How have relations between India and the Taliban evolved?
When the Taliban first rose to power in Afghanistan in 1996, India adopted a hostile policy towards the group and did not recognise its assumption of power. India also shunned all diplomatic relations with the Taliban.
At the time, New Delhi viewed the Taliban as a proxy for Pakistan’s intelligence agencies. Pakistan, together with Saudi Arabia and the United Arab Emirates, were the only three countries to have also recognised the Taliban administration at that point.
Then, in 2001, India supported the US-led invasion of Afghanistan, which toppled the Taliban administration. India then reopened its embassy in Kabul and embraced the new government led by Hamid Karzai. The Taliban, in response, attacked Indian embassies and consulates in Afghanistan. In 2008, at least 58 people were killed when the Taliban bombed India’s embassy in Kabul.
In 2021, after the Taliban returned to power, India closed its embassy in Afghanistan once again and also did not officially recognise the Taliban as the government of the country.
But a year later, as relations between Pakistan and the Taliban deteriorated over armed groups which Pakistan accuses Afghanistan of harbouring, India began engaging with the Taliban.
In 2022, India sent a team of “technical experts” to run its mission in Kabul and officially reopened its embassy in the Afghan capital last October. New Delhi also allowed the Taliban to operate Afghanistan consulates in the Indian cities of Mumbai and Hyderabad.
Over the past two years, officials from New Delhi and Afghanistan have also held meetings abroad, in Kabul and in New Delhi.
In January last year, the Taliban administration’s Foreign Minister Amir Khan Muttaqi met India’s Foreign Secretary Vikram Misri in Dubai, the United Arab Emirates.
Then, in October 2025, he visited New Delhi and met Indian foreign minister Subrahmanyam Jaishankar.
After this meeting, Muttaqi told journalists that Kabul “has always sought good relations with India” and, in a joint statement, Afghanistan and India pledged to have “close communication and continue regular engagement”.
Besides beefing up diplomatic ties, India has also offered humanitarian support to Afghanistan under the Taliban’s rule.
After a magnitude 6.3 earthquake struck northern Afghanistan in November last year, India shipped food, medicine and vaccines, and Jaishankar was also among the first foreign ministers to call Muttaqi and offer his support. Since last December, India has also approved and implemented several healthcare infrastructure projects in Afghanistan, according to a December 2025 report by the country’s press information bureau.
Praveen Donthi, senior analyst at the International Crisis Group, told Al Jazeera that the costs of avoiding engagement with the Taliban in the past have compelled the Indian government to adopt strategic pragmatism towards the Afghan leadership this time.
“New Delhi does not want to disregard this relationship on ideological grounds or create strategic space for India’s main strategic rivals, Pakistan and China, in its neighbourhood,” he said.
Raghav Sharma, professor and director at the Centre for Afghanistan Studies at the OP Jindal Global University in India, added that the current engagement also stems from New Delhi’s pragmatic realisation that the Taliban is now in charge in Afghanistan and that there is no meaningful opposition.
“States engage in order to protect and further their interests. While there is little by way of ideological convergence, there are areas of strategic convergence, which is what has pushed India to engage with the Taliban, some of their unpalatable policies notwithstanding,” he said.
Is this a new stance towards Afghanistan?
No. India’s growing influence and engagement with Afghanistan began well before the Taliban returned to power in August 2021.
Between December 2001 and September 2014, during the US presence in Afghanistan, New Delhi was a strong supporter of the Karzai government, and then of his successor, Ashraf Ghani’s government, which was in power from September 2014 until August 2021, when the US withdrew from the country.
In October 2011, under Karzai, India and Afghanistan renewed ties by signing an agreement to form a strategic partnership. New Delhi also pledged to support Afghanistan in the face of foreign troops in the nation as a part of this agreement.
Under both Karzai and his successor, Ghani, India invested more than $3bn in humanitarian aid and reconstruction work in Afghanistan. This included reconstruction projects like schools and hospitals, and also a new National Assembly building in Kabul, which was inaugurated in December 2015 when Indian Prime Minister Narendra Modi visited Afghanistan for the first time.
India’s Border Road Organisation (BRO) also assisted Afghanistan in the development of infrastructure projects like the 218km Zaranj-Delaram highway in 2009 under Karzai’s government.
Under Ghani, New Delhi undertook building the Salma Dam project to help with irrigating Afghanistan. In June 2016, when Modi visited Afghanistan once again, he inaugurated this $290m dam project. In May 2016, Iran, India and Afghanistan also signed a trilateral trade and transit agreement on the Chabahar port.
During this period – 2001-2021 – Pakistan’s unease with New Delhi and Kabul’s new partnership grew.
In October 2011, after signing a strategic agreement with India, Karzai had assured Islamabad that while “India is a great friend, Pakistan is a twin brother”.
But Karzai was critical of Pakistan’s support for the Taliban. In his last speech as president of Afghanistan in Kabul in September 2014, he stated that he believed most of the Taliban leadership lived in Pakistan.
In a 2011 report by a Washington, DC-based think tank, the Center for Strategic and International Studies, Amer Latif, former director for South Asian affairs in the US Office of the Undersecretary of Defense for Policy, noted that Karzai was walking a “fine line between criticising Pakistan’s activities while also referring to Pakistan as Afghanistan’s ‘twin brother’.”
“It is in this context that Karzai appears to be looking to solidify long-term partnerships with countries that will aid his stabilisation efforts,” he said, referring to Karzai’s visit to India and his efforts to improve relations with the subcontinent.
When Ghani rose to power in September 2014, he tried to reset ties with Pakistan and also visited the country in November that year. But his efforts did not result in improved ties due to border disputes with Pakistan continuing until his administration was overthrown by the Taliban in August 2021.
So why has India maintained ties with Afghanistan under the Taliban?
Initially, when the Taliban returned to power in 2021 following the withdrawal of the US, political analysts largely expected Pakistan to lead the way in recognising the Taliban administration as the official government of Afghanistan, improving bilateral relations which had turned icy under Karzai and Ghani.
But relations turned hostile, with Pakistan repeatedly accusing the Taliban of allowing anti-Pakistan armed groups like the Pakistan Taliban (TTP) to operate from Afghan soil. The Taliban denies this.
Then, the deportation of tens of thousands of Afghan refugees by Pakistan in recent years further strained ties between the two neighbours.
India has ultimately taken a pragmatic approach to the Taliban in order to maintain the good relations it built with Afghanistan from 2001 to 2021, and has somewhat leveraged poor relations between Pakistan and Afghanistan to cement these.
“With Pakistan’s increasingly strained relations with Afghanistan, the logic of ‘enemy’s enemy’ is acting as a glue between Kabul and New Delhi,” International Crisis Group’s Donthi said.
He added that despite the fact that India’s Bharatiya Janata Party (BJP)-led government opposes Islamist organisations, “the strategic necessity to counter Pakistan has led it to engage with the Taliban proactively”.
India and Pakistan are nuclear-armed rivals which engaged in a four-day conflict in May 2025 after armed rebels killed Indian tourists in Pahalgam, a popular tourist spot in Indian-administered Kashmir, last April. New Delhi accused Pakistan of supporting rebel fighters, a charge Pakistan strongly denied.
For its part, Afghanistan took the opportunity to strongly condemn the Pahalgam attack and the Indian Ministry of External Affairs expressed “deep appreciation” to the Taliban for its “strong condemnation of the terrorist attack in Pahalgam … as well as for the sincere condolences”.
India has also condemned Pakistani military action in Afghanistan and has provided aid to thousands of Afghan refugees displaced from Pakistan.
So what is India’s endgame in Afghanistan?
Sharma, the OP Jindal Global University professor, said India wants to ensure that Pakistan and China, whose influence has grown in South Asia in recent years, “do not have a free run”, as “there is a divergence of interest on Afghanistan” with both Pakistan and its ally, China.
“There are security interests New Delhi is keen to further and protect for which engagement [with the Taliban] is the only option,” he added.
Anil Trigunayat, a former Indian diplomat, noted that while Afghanistan and Pakistan relations have their own dynamic, currently the Taliban leadership, even if not a monolith, refuses to play to the tunes of the Pakistan military and its intelligence agency.
“Hence they [Pakistan] accuse Indian complicity in Taliban actions in Pakistan,” he said.
But the Taliban, he said, “understands and appreciates India’s intent, policies and [humanitarian] contributions”, making its leaders keen to continue collaboration with New Delhi.
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