Connect with us

World

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

Published

on

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.

Advertisement

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.

Advertisement

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.

Advertisement

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.

Advertisement

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.

Advertisement

“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.

Advertisement

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.

Advertisement

“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.

Advertisement

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.

Advertisement

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.”

Advertisement

World

Pope Leo says remarks about world being ‘ravaged by a ​handful of tyrants’ were not aimed at Trump: report

Published

on

Pope Leo says remarks about world being ‘ravaged by a ​handful of tyrants’ were not aimed at Trump: report

NEWYou can now listen to Fox News articles!

Pope Leo XIV said Saturday that remarks he made this week in which he said the “world is being ravaged by a handful of tyrants” were not directed at President Donald Trump, a report said. 

The pope, speaking onboard a flight to Angola during his 10-day tour of Africa, said reporting about his comments “has not been ‌accurate in all its aspects” and his speech “was ⁠prepared two weeks ago, well before the president ever commented on myself and on the message of peace that I am promoting,” according to Reuters.

The news outlet cited the pope as saying his comments were not aimed at Trump.

“As it happens, it was looked at as if I was trying to debate the president, which is not in ​my interest at all,” the pope reportedly said.

Advertisement

’60 MINUTES’ ACCUSED OF USING LEFT-LEANING CARDINALS TO BAIT TRUMP INTO FEUD WITH VATICAN

Pope Leo XIV answers journalists’ questions during his flight from Yaoundé, Cameroon, to Luanda, Angola, Saturday, April 18, 2026. (Luca Zennaro/Pool Photo via AP)

Vice President JD Vance later took to X to thank the pope for clearing the record.

“While the media narrative constantly gins up conflict — and yes, real disagreements have happened and will happen — the reality is often much more complicated,” Vance wrote. “Pope Leo preaches the gospel, as he should, and that will inevitably mean he offers his opinions on the moral issues of the day.

“The President — and the entire administration — work to apply those moral principles in a messy world,” he continued. “He will be in our prayers, and I hope that we’ll be in his.”

Advertisement

The vice president’s comments came days after he told Fox News’ Bret Baier on “Special Report” that it would be best for the Vatican to “stick to matters of morality.”

“Let the President of the United States stick to dictating American public policy,” Vance said Tuesday.

Trump last Sunday accused Pope Leo XIV of being “terrible” on foreign policy after the pontiff criticized the U.S.-Israeli war on Iran.

“He talks about ‘fear’ of the Trump Administration, but doesn’t mention the FEAR that the Catholic Church, and all other Christian Organizations, had during COVID when they were arresting priests, ministers, and everybody else, for holding Church Services, even when going outside, and being ten and even twenty feet apart,” Trump wrote in a Truth Social post. 

“I don’t want a Pope who thinks it’s OK for Iran to have a Nuclear Weapon.”

Advertisement

POPE LEO SLAMS THOSE WHO ‘MANIPULATE RELIGION’ FOR MILITARY OR POLITICAL GAIN, TRUMP RESPONDS

Pope Leo XIV and President Donald Trump (Simone Risoluti/Vatican Media via Vatican Pool/Getty Images; Salwan Georges/Bloomberg via Getty Images)

During a speech in Cameroon on Thursday, the pope said, “We must make a decisive change of course — a true conversion — that will lead us in the opposite direction, onto a sustainable path rich in human fraternity.

“The world is being ravaged by a handful of tyrants, yet it is held together by a multitude of supportive brothers and sisters.

Pope Leo XIV speaks as he meets with the community of Bamenda at Saint Joseph’s Cathedral in Bamenda on the fourth day of an 11-day apostolic journey to Africa April 16, 2026. (Alberto Pizzoli/AFP via Getty Images)

Advertisement

CLICK HERE TO DOWNLOAD THE FOX NEWS APP

“Woe to those who manipulate religion and the very name of God for their own military, economic or political gain, dragging that which is sacred into darkness and filth.”

Fox News Digital has reached out to the White House for comment. 

Fox News Digital’s Landon Mion contributed to this report. 

Advertisement
Continue Reading

World

Bulgaria votes in eighth election in five years

Published

on

Bulgaria votes in eighth election in five years

Bulgarians headed to the polls Sunday for the eighth time in five years, with anti-corruption candidate and former president Rumen Radev’s bloc tipped to win.

ADVERTISEMENT


ADVERTISEMENT

The European Union’s poorest member has been through a spate of governments since 2021, when large anti-graft rallies brought an end to the conservative government of long-time leader Boyko Borissov.

Eurostat data shows Bulgaria consistently ranks last in the EU by GDP per capita. In 2025, Bulgaria (along with Greece) was at 68% of the EU average.

Radev, who has advocated for renewing ties with Russia and opposes military aid to Ukraine, was president for nine years in the Balkan nation of 6.5 million people.

Advertisement

He stepped down in January to lead newly formed centre-left grouping Progressive Bulgaria, with opinion polls before Sunday’s vote suggesting the bloc could gain 35% of the vote.

The former air force general has said he wants to rid the country of its “oligarchic governance model”, and backed anti-corruption protests in late 2025 that brought down the latest conservative-backed government.

“I’m voting for change,” Decho Kostadinov, 57, told reporters after casting his ballot at a polling station in the capital, Sofia, adding corrupt politicians “should leave — they should take whatever they’ve stolen and get out of Bulgaria”.

Polls are forecasting a surge in voter participation, with more than 3.3 million Bulgarians expected to cast ballots according to the Bulgarian News Agency.

Voting will close at 1700 GMT, with exit polls expected immediately afterwards. Preliminary results are expected on Monday.

Advertisement

‘Preserve what we have’

Borissov’s pro-European GERB party is likely to come second, according to opinion polls, with around 20%, ahead of the liberal PP-DB.

“I’m voting to preserve what we have. We are a democratic country, we live well,” said Elena, an accountant of about 60, who did not give her full name, after casting her vote in Sofia.

Front-runner Radev has slammed the EU’s green energy policy, which he considers naive “in a world without rules”.

He also opposes any Bulgarian efforts to send arms to help Ukraine fight back Russia’s 2022 invasion, though he has said he would not use his country’s veto to block Brussels’ decisions.

Pushing for renewed ties with Russia, Radev denounced a 10-year defence agreement between Bulgaria and Ukraine signed last month – drawing fresh accusations from opponents of being too soft on Moscow.

Advertisement

The ex-president also stoked outrage online for screening images at his final campaign rally of his meetings with world leaders including Russia’s Vladimir Putin.

“We need to close ranks,” he told around 10,000 cheering supporters at the rally, presenting his party as a non-corrupt “alternative to the perverse cartel of old-style parties”.

Borissov, who headed the country virtually uninterrupted for close to a decade, has dismissed suggestions that Radev brings something “new”.

At a rally of his party earlier this week, he insisted GERB had “fulfilled the dreams of the 1990s” with such achievements as the country joining the eurozone this year.

‘No one to vote for’

Radev is aiming for an absolute majority in the 240-seat parliament.

Advertisement

A lack of trust in politics has affected voter turnout, which slumped to 39% in the last election in 2024.

But with Radev rallying voters, high turnout is expected this time, according to analyst Boryana Dimitrova from the Alpha Research polling institute.

Miglena Boyadjieva, a taxi driver of about 55, said she always votes, but the “problem is that there is no one to vote for”.

“You vote for one person and get others. The system has to change,” she told reporters.

Political parties have called on Bulgarians to show up for the polls, also to curb the impact of vote buying.

Advertisement

In recent weeks, police have seized more than one million euros in raids against vote buying in stepped-up operations.

They have also detained hundreds of people, including local councillors and mayors.

Continue Reading

World

How Cheap Drones Are Changing Wars Like the Ones in Ukraine and Iran

Published

on

How Cheap Drones Are Changing Wars Like the Ones in Ukraine and Iran

Advertisement

A 3-D rendering of an Iranian Shahed-136 drone, a device with two triangle-shaped wings attached to a central fuselage. It has an engine the size of a small motorcycle’s and carries 110 pounds of explosives.

Engine the size of a small motorcycle’s

Advertisement

Carries 110 pounds of explosives

One of the biggest takeaways of the war with Iran is that it has proven itself to be a surprisingly capable adversary against the United States. In addition to its willingness to go on the offensive, Iran has forced the U.S. and its regional allies to confront the rise of cheap drones on the battlefield.

Advertisement

Iranian drones, made with commercial-grade technology, cost roughly $35,000 to produce. That is a fraction of the cost of the high-tech military interceptors sometimes used to shoot them down.

Note: Estimated price of munitions per unit. In practice, multiple interceptors are fired when targeting a drone. For instance, with the $80 bullet fired by the Centurion Counter-Rocket, Artillery, and Mortar (C-RAM), 75 rounds are fired in a second. Sources: Department of Defense, Lockheed Martin, Northrop Grumman, Open Source Munitions Portal, SRC Inc, U.S. Army and U.S. Navy.

Advertisement

Cheap drones changed the war in Ukraine, and they have enabled Iranians to exploit a gap in American defense investments, which have historically prioritized accurate but expensive solutions.

Countering drones has been a major priority for the Pentagon for years, according to Michael C. Horowitz, who was a Pentagon official in the Biden administration. “But there has not been the impetus to scale a solution,” he said.

Advertisement

In just the first six days, the U.S. spent $11.3 billion on the war with Iran. The White House and Pentagon have not provided updated estimates, but the American Enterprise Institute, a conservative-leaning think tank, estimated in early April that the U.S. had spent approximately between $25 and $35 billion on the war, with interceptors driving much of the cost. Many missile defense experts also fear interceptor stockpiles are now running dangerously low.

Here is a breakdown of some of the ways the U.S. and its allies have countered Iran’s drones, and why it can be so costly.

Air-based strikes

Advertisement

In an ideal scenario, an early warning aircraft spots a drone when it is still several hundred miles out from a target, and a fighter jet, like an F-16, is dispatched from a military base. The F-16 can then use Advanced Precision Kill Weapon System (APKWS) II rockets to shoot a drone from about six miles away.

Advertisement

A 3-D rendering of an F-16 fighter jet firing an APKWS II rocket from under one wing. Two to three rockets are fired per drone, as per air defense protocol. Two APKWS II rockets and an hour of F-16 flight cost approximately $65,000, a little less than twice that of the Iranian Shahed-136.

Advertisement

Two to three interceptors fired per drone

Advertisement

Source: U.S. Navy, Department of Defense

Advertisement

These types of defensive air patrols are cost-efficient, but haven’t always been available because of the vast scope of the conflict. Iran has also targeted early warning aircraft that the U.S. needs to detect a drone from that distance, according to NBC News.

The other option for detecting and shooting down drones is a variety of different ground-based detection systems, but these systems are all at a disadvantage, as their ability to spot low-flying drones is limited by the curvature of the earth.

Advertisement

Anti-drone defense systems

One ground-based defense system the U.S. and its allies have built specifically to counter drones at a shorter range is the Coyote. It can intercept drones up to around nine miles away.

Advertisement

A 3-D rendering of a Coyote Block 2 interceptor, which looks like a three-foot tube with small rockets at one end. Two Coyotes cost approximately $253,000 or about seven times that of the Iranian Shahed-136.

Advertisement

Advertisement

The Coyote is significantly cheaper than many of the other ground-based defense systems available to the U.S. and its allies and historically effective at defending important assets. But despite being both effective and cost-efficient, relatively few Coyotes have been procured by the U.S. military in recent years.

When Iran-backed militias launched attacks on U.S. ground troops in the region in 2023 and 2024, there were so few Coyotes available that troops had to shuffle the systems between eight different bases in the region almost daily, according to a report from the Center for a New American Security, a Washington think tank.

Advertisement

Ship-based anti-missile defenses

Many of the longer-range ground-based defense systems the U.S. and its allies can use to combat drones are more expensive, as they are designed to shoot down aircraft and ballistic missiles, not drones. A Navy destroyer’s built-in radar system, for instance, can detect drones from 30 miles away and shoot it down with Standard Missile 2 (SM-2) interceptors. As in the air-based strikes, military protocol stipulates that at least two missiles be fired.

Advertisement

A 3-D rendering of the deck of a Navy destroyer firing an SM-2 missile from a built-in launcher, which looks like a 15-foot missile launching from a grid of openings on the ship’s surface. Two SM-2 missiles cost approximately $4.2 million, about 120 times that of the Iranian Shahed-136.

Advertisement

Advertisement

This misalignment between America’s defense systems and current warfighting tactics started after the Cold War, when the anticipated threats were fewer, faster, higher-end projectiles, not mass drone raids.

Iran often launches multiple Shahed-136 drones at a time, given their low price tag. The drones are also programmed with a destination before launch and can travel roughly 1,500 miles, putting targets all across the Middle East within reach.

Advertisement

“This category of lower-cost precision strike just didn’t exist at the time that most American air defenses were developed,” said Mr. Horowitz.

Ground-based anti-missile defenses

The Army’s standard air-defense system is the Patriot. Typically stationed at a military base, it can shoot down a drone from up to around 27 miles away with PAC-3 Missile Segment Enhancement interceptors. Military protocol stipulates that at least two missiles be fired.

Advertisement

Advertisement

A 3-D rendering of a Patriot launcher loaded with 17-foot PAC-3 MSE missiles, which looks like a tilted shipping container with scaffolding. Two PAC-3 MSE missiles cost approximately $8 million, about 220 times that of the Iranian Shahed-136.

Patriot missile defense system

Advertisement

Advertisement

Air defense training teaches service members to prioritize using longer-range defense systems first to “get as many bites at the apple as you can,” but those are the most expensive, said Stacie Pettyjohn, a senior fellow and director of the defense program at the Center for a New American Security.

But a costly defense can still make economic sense to protect a valuable target, especially those that are difficult to repair or replace, such as the nearly $1.1 billion radar at a military base in Qatar and the $500 million air defense sensor at a base in Jordan that were damaged early in the conflict.

Advertisement

Ground-based guns

Finally, there is what one might call a last resort: a ground-based gun. When a drone is about a mile away or less than a minute from hitting its target, something like the Centurion C-RAM can begin rapidly firing to take down the drone.

Advertisement

A 3-D rendering of a Centurion C-RAM, which looks like a gun mounted to a rotating, cylindrical stand. The gun fires 75 rounds of ammunition per second. Five seconds of firing the gun costs $30,000, slightly less than a single Iranian Shahed-136.

Advertisement

Centurion Counter-Rocket, Artillery and Mortar

Fires 375 rounds of ammunition in 5 seconds

Advertisement

Advertisement

Even though it is fairly cost-effective, the Centurion C-RAM is not the best option because it has such a short range.

Interceptor drones

Advertisement

There’s also what one might call the future of fighting drones: A.I.-powered interceptor drones. Interceptor drones like the Merops Surveyor can theoretically hunt and take down enemy projectiles from a short range.

Advertisement

A 3-D rendering of a Surveyor drone, which looks like a three-foot tube with wings and a tail. The Merops drone costs approximately $30,000, a little less than a single Iranian Shahed-136.

Advertisement

Merops system: Surveyor drone

Advertisement

Eric Schmidt, the former Google chief executive, founded a company to develop the Merops counter-drone system in conjunction with Ukrainian fighters, who have already been combatting Iranian drones in the war with Russia for years.

The U.S. sent thousands of Merops units to the Middle East after the conflict began, but it is unclear whether they have been deployed. The military set up training on the system in the middle of the war, as reported by Business Insider.

Advertisement

Other attempts to lower the cost-per-shot ratio of taking out a drone have failed.

The Pentagon invested over a billion dollars in fiscal year 2024 researching directed energy weapons, or lasers, that would cost only $3 per shot and have a range of 12 miles. Those systems have yet to be used in the field.

Advertisement

Despite the cost imbalance, the real fear for many in the defense community is the depleted stockpile of munitions.

“What scares me is that we will run out of these things,” said Tom Karako, the director of the Missile Defense Project at the Center for Strategic and International Studies in Washington. “Not that we can’t afford them, but that we’ll run out before we can replace them.”

Advertisement
Continue Reading
Advertisement

Trending