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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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Venezuela teeters as guerrilla groups, cartels exploit Maduro power vacuum

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Venezuela teeters as guerrilla groups, cartels exploit Maduro power vacuum

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Venezuela is teetering on the edge after the U.S. capture and arrest of former President Nicolás Maduro, as armed militias, guerrilla groups and criminal networks threaten a path toward stability, according to reports.

As interim President Delcy Rodríguez assumes control, backed by President Trump’s administration, analysts have warned that the country is completely saturated with heavily armed groups capable of derailing any progress toward stability.

“All of the armed groups have the power to sabotage any type of transition just by the conditions of instability that they can create,” Andrei Serbin Pont, a military analyst and head of the Buenos Aires-based think tank Cries, told The Financial Times.

“There are parastate armed groups across the entirety of Venezuela’s territory,” he said.

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MADURO ARREST SENDS ‘CLEAR MESSAGE’ TO DRUG CARTELS, ALLIES AND US RIVALS, RETIRED ADMIRAL SAYS

Venezuelan President Nicolás Maduro, who, according to the State Department, leads the Cartel de los Soles, beside members of the Venezuelan Tren de Aragua gang in an apartment building in Aurora, Colorado. (Jesus Vargas/Getty Images; Edward Romero)

Experts say Rodríguez must keep the regime’s two most powerful hardliners onside: Interior Minister Diosdado Cabello and Defense Minister Vladimir Padrino.

“The focus is now on Diosdado Cabello,” Venezuelan military strategist José García told Reuters, “because he is the most ideological, violent and unpredictable element of the Venezuelan regime.”

“Delcy has to walk a tightrope,” said Phil Gunson, a Crisis Group analyst in Caracas.

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“They are not in a position to deliver any kind of deal with Trump unless they can get the approval of the people with the guns, who are basically Padrino and Cabello.”

Since Maduro’s removal, government-aligned militias known as “colectivos” have been deployed across Caracas and other cities to enforce order and suppress dissent.

“The future is uncertain, the colectivos have weapons, the Colombian guerrilla is already here in Venezuela, so we don’t know what’s going to happen, time will tell,” Oswaldo, a 69-year-old shop owner, told The Telegraph.

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Demonstrators critical of the government clash with the security forces of the state. After the last conflict-laden days, interim president Guaido, with the support of his supporters, wants to continue exerting pressure on head of state Maduro. (Rafael Hernandez/picture alliance/Getty Images)

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As previously reported by Fox News Digital, armed motorcyclists and masked enforcers have erected checkpoints in the capital, searching civilians’ phones and vehicles for signs of opposition to the U.S. raid.

“That environment of instability plays into the hands of armed actors,” Serbin Pont added.

Outside the capital, guerrilla groups and organized crime syndicates are exploiting the power vacuum along Venezuela’s borders and in its resource-rich interior.

Guerrillas now operate along Venezuela’s 2,219-kilometer border with Colombia and control illegal mining near the Orinoco oil belt.

The National Liberation Army (ELN), a Colombian Marxist guerrilla group with thousands of fighters and designated a U.S.-designated terrorist organization, has operated in Venezuela as a paramilitary force.

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FROM SANCTIONS TO SEIZURE: WHAT MADURO’S CAPTURE MEANS FOR VENEZUELA’S ECONOMY

Armed colectivos deploy across Venezuelan cities while guerrilla groups control borders following former President Nicolás Maduro’s capture. (Juancho Torres/Anadolu via Getty Image)

Elizabeth Dickson, Crisis Group’s deputy director for Latin America, said the ELN “in Venezuela … has essentially operated as a paramilitary force, aligned with the interests of the Maduro government up until now.”

Carlos Arturo Velandia, a former ELN commander, also told the Financial Times that if Venezuela’s power bloc fractures, the group would side with the most radical wing of Chavismo.

Colectivos also function as armed enforcers of political loyalty.

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“We are the ones being called on to defend this revolutionary process radically, without hesitation — us colectivos are the fundamental tool to continue this fight,” said Luis Cortéz, commander of the Colectivo Catedral Combativa.

“We are always, and always will be, fighting and in the streets.”

Other armed actors include the Segunda Marquetalia, a splinter group of Colombia’s former FARC rebels. Both guerrilla groups work alongside local crime syndicates known as “sistemas,” which have ties to politicians.

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The Tren de Aragua cartel, designated a foreign terrorist organization by the U.S., has also expanded across Venezuela and into Colombia, Chile and the U.S.

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As reported by Fox News Digital, an unsealed indictment alleges Maduro “participates in, perpetuates, and protects a culture of corruption” involving drug trafficking with groups including Mexico’s Sinaloa Cartel, the ELN, FARC factions and Tren de Aragua, with most of the problematic groups named.

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Trump says meeting Iran’s ‘Crown Prince’ Pahlavi would not be appropriate

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Trump says meeting Iran’s ‘Crown Prince’ Pahlavi would not be appropriate

US president signals he is not ready to back the Israel-aligned opposition figure to lead Iran in case of regime change.

United States President Donald Trump has ruled out meeting with Iran’s self-proclaimed Crown Prince Reza Pahlavi, suggesting that Washington is not ready to back a successor to the Iranian government, should it collapse.

On Thursday, Trump called Pahlavi, the son of Iran’s last shah who was toppled by the Islamic revolution of 1979, a “nice person”. But Trump added that, as president, it would not be appropriate to meet with him.

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“I think that we should let everybody go out there and see who emerges,” Trump told The Hugh Hewitt Show podcast. “I’m not sure necessarily that it would be an appropriate thing to do.”

The US-based Pahlavi, who has close ties to Israel, leads the monarchist faction of the fragmented Iranian opposition.

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Trump’s comments signal that the US has not backed Pahlavi’s offer to “lead [a] transition” in governance in Iran, should the current system collapse.

The Iranian government is grappling with protests across several parts of the country.

Iranian authorities cut off access to the internet on Thursday in an apparent move to suppress the protest movement as Pahlavi called for more demonstrations.

The US president had previously warned that he would intervene if the Iranian government targets protesters. He renewed that threat on Thursday.

“They’re doing very poorly. And I have let them know that if they start killing people – which they tend to do during their riots, they have lots of riots – if they do it, we’re going to hit them very hard,” Trump said.

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Iranian protests started last month in response to a deepening economic crisis as the value of the local currency, the rial, plunged amid suffocating US sanctions.

The economy-focused demonstrations started sporadically across the country, but they quickly morphed into broader antigovernment protests and appear to be gaining momentum, leading to the internet blackout.

Pahlavi expressed gratitude to Trump and claimed that “millions of Iranians” protested on Thursday night.

“I want to thank the leader of the free world, President Trump, for reiterating his promise to hold the regime to account,” he wrote in a social media post.

“It is time for others, including European leaders, to follow his lead, break their silence, and act more decisively in support of the people of Iran.”

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Last month, Trump also threatened to attack Iran again if it rebuilds its nuclear or missile programmes.

The US bombed Iran’s three main nuclear facilities in June as part of a war that Israel launched against the country without provocation.

On top of its economic and political crises, Iran has faced environmental hurdles, including severe water shortages, deepening its domestic unrest.

Iran has also been dealt major blows to its foreign policy as its network of allies has shrunk over the past two years.

Syrian President Bashar al-Assad was toppled by armed opposition forces in December 2024; Hezbollah was weakened by Israeli attacks; and Venezuelan President Nicolas Maduro has been abducted by the US.

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But Iran’s leaders have continued to dismiss US threats. Iranian Supreme Leader Ali Khamenei doubled down on his defiant rhetoric after the US raid in Caracas on Saturday.

“We will not give in to the enemy,” Khamenei wrote in a social media post. “We will bring the enemy to its knees.”

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‘Sentimental Value’ Writing Duo Joachim Trier and Eskil Vogt Still ‘Keep the Marriage Happy’: ‘He’s My Longest Relationship’

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‘Sentimental Value’ Writing Duo Joachim Trier and Eskil Vogt Still ‘Keep the Marriage Happy’: ‘He’s My Longest Relationship’

It wasn’t love at first sight for longtime collaborators Joachim Trier and Eskil Vogt, who met when they were both in their late teens.

“We were both camera assistants, taking care of the cables on a quiz show in Norway. Joachim was still skating and wearing the biggest pants I’d ever seen. They were as wide as they were tall. I was the black jeans and Dr. Martens type, so I was skeptical,” laughs Vogt, who co-wrote “Sentimental Value” with Trier.

Then they started talking about films. 

“Suddenly, there was someone who’s seen more Fellini films than I had, and I had Hal Hartley films on VHS he wanted to borrow. This was the first time I met someone who shared my dream of making films, and that made the dream more tangible and real,” says Vogt.

Six features later, they are much more similar now, says Trier. Their way of working hasn’t really changed — they still start with ideas and develop the plot later on. 

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“We know it would be easier the other way around, but we still think of the plot quite late. Instead, we put notes up on the board and say: ‘Oh, I love this scene.’ And then we try to keep most of our darlings,” explains Vogt. 

Trier agrees: “We don’t construct the story until very late. Instead of having scenes I don’t want to shoot and we don’t want to write, we try to make sure none of them just ‘tells the story.’ They all have to be about the characters or [present us] with an exciting visual situation.”

“We still have a phase when we entertain a lot of ideas, but we come to the core of it quicker now. I think we’re more honest with ourselves — and about what we want. We also have this silly rule that we shouldn’t think too much about production limitations and money when we write. When I become the director again, it bites me in the ass.”

How do they keep it fresh? 

“I think we don’t,” laughs Vogt. 

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“There’s a lot of stuff going on when you make and release films, and we both like to go back to that safe space and rediscover that calm where it’s just our two voices. We are fortunate enough that our films generate more and more noise that we have to shut out, so when we work, we make it personal and small again.”

Following the success of 2021’s “The Worst Person in the World,” which earned them an Academy Award nomination for original screenplay — it also scored an Oscar nomination for international feature — expectations were high. Then again, they always are. 

“Every film feels like that. The first one, ‘Reprise,’ was quite successful, so ‘Oslo, August 31st’ was made out of panic: ‘Let’s do what we want now, before we don’t sell out’,” says Trier with a laugh. “’Worst Person’ was this fun film that generated a lot of attention and we knew we were going to put [“Sentimental Value”’”] into a climate of expectation. We used that panic and that energy to go deep into something we cared about.” 

In the film, which scored Grand Prix at Cannes, two sisters reunite with their absentee father, a movie director who wants to make a film about their family. It stars Stellan Skarsgård, “Worst Person” breakout star Renate Reinsve and Inga Ibsdotter Lilleaas, who seems to be on the same trajectory as Reinsve in terms of global recognition for her performance.

“A few months into that process, we thought: ‘We’re going to lose some of the people who loved ‘Worst Person’ for being so young and exuberant,’” says Vogt. Fast forward to November and the film is being embraced by an even younger audience and “spreading on TikTok,” says Trier with a hint of irony.  

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Their friendship allows them to get “very intimate and very personal super quickly” when they write. 

“When I write alone, I procrastinate. When I’m procrastinating with Joachim, even if I haven’t done anything, at least I got to spend a day with my friend,” says Vogt. Trier adds: “It took me a long time to create a real family outside of art. I have one now, but Eskil is my longest relationship outside of my parents. We don’t need to be silly romantic about it, but we have to be honest: it’s a real gift.”

Trier continues: “If you look at our filmography, it becomes apparent we’ve been tracing the development of our life stages. I don’t think we could have made ‘Sentimental Value’ earlier in our collaboration.”

They say their relationship is “like every old marriage,” but having an open relationship isn’t an option just yet.

“I think we get enough excitement with other collaborators to keep the marriage happy,” says Trier.

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“Eskil has always told me: ‘If you want to write with someone else, it’s OK’ We have those tough conversations, but it just hasn’t happened yet. I still call him during the shoot, so he’s used to me working with others and doing my own thing, and he allows that. I’m also happy to see Eskil making his own films without me at all.” 

Vogt, who directed “The Innocents,” adds: “Maybe it would be interesting for you to make a film without me involved…” 

“…And see how shitty I really am,” deadpans Trier. “I come from a family of artists — I love the team thing. Eskil can write alone — I would hate that. We get annoyed with each other, but that’s life: there’s still love at the end of the day. So, you know, touch wood. I hope it continues.”

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