Reparations loan is out, joint debt is in. That is the agreement that the 27 leaders of the European Union reached at their make-or-break summit this week.

With the reparations loan ruled out for good, the bloc turns to common borrowing to raise €90 billion to meet Ukraine’s budgetary and military needs for the next two years.

It is a simpler, faster and more predictable solution compared to the high-risk scheme of using the immbolised Russian assets. But joint debt is expensive, and immediately so.

Here’s what you need to know about the plan.

Back to the markets

Since neither the EU nor its member states have €90 billion at their disposal at the moment, the European Commission will go to the markets and raise the money from scratch by issuing a mix of short-term and long-term bonds.

The €90 billion will be gradually dolled out to ensure a steady flow of assistance to Ukraine, which needs a fresh tranche as early as April. The country will be able to use the funds for both military and budgetary purposes for greater flexibility.

In the meantime, the EU budget will absorb the interest rates to spare Ukraine, already heavily indebted, from any additional burden. The Commission estimates that, under current rates, the interest payments will amount to €3 billion per year. This means the next EU budget (2028-2034) will have to make space for about €20 billion.

Member states will share the interest according to their economic weight. Germany, France, Italy, Spain and Poland will carry the highest costs.

According to Commission officials, the €90 billion will not count towards domestic levels of debt because the issuance will be done exclusively at the EU level.

Forever roll-over

Under a non-recourse loan agreement, Ukraine will be asked to pay back the €90 billion only after Russia ceases its war of aggression and agrees to pay war reparations.

Given that Moscow has emphatically ruled out the possibility of any compensation, the Commission is already prepared to roll out the liability over time so that Ukraine does not have to pay out of pocket, which will be painful after suffering so much devastation.

“The assumption is, today it’s a non-recourse loan to Ukraine that is only paid back when reparations are there, and therefore this debt is going to be rolled over up until then,” a senior Commission official explained.

But will the roll-over continue for eternity?

That seems unlikely. At some point in the future, the EU will have to settle the fate of the €90 billion to stop paying interest rates. The go-to method will be the EU budget, which will act as the ultimate guarantor to ensure investors are always paid back.

The three opt-outs

The reason why joint debt for Ukraine is now possible is that, as first reported by Euronews during the summit, Hungary, Slovakia and the Czech Republic agreed to refrain from vetoing in exchange for being exempted.

This is key because under current rules, the EU budget cannot be used to raise money for a non-EU country. Any changes to that effect will require unanimous approval.

Hungary, Slovakia and the Czech Republic will commit to that unanimity. In return, the bloc will activate the so-called “enhanced cooperation” mechanism to spare them from any costs and responsibilities associated with the €90 billion.

The other 24 countries will take over their share of the interest. But the change will be minimal because the three opt-outs only amount to 3.64% of the bloc’s GNI.

The exemption will also be institutional. Once the budget rules are amended and the “enhanced cooperation” is triggered, the three countries will lose their voting rights to approve the regulation that will establish the new assistance programme.

In practice, they will be strictly removed from the initiative.

Strings attached

The Commission intends to recycle the now-discarded proposal of the reparations loan to set up the €90 billion common borrowing.

As a result, Ukraine will be subject to the same conditions to receive the funds.

One of them is a “no rollback” clause that will link the aid to the anti-corruption measures that Kyiv must implement to advance in its EU accession bid. The country was recently shaken by a corruption scandal in the energy sector that precipitated numerous resignations, including that of Andriy Yermak, President Zelenskyy’s chief of staff.

If Kyiv takes a step back on the fight against corruption, as it briefly did in the summer when it undermined the independence of two anti-corruption agencies and prompted widespread protests, payments will be suspended.

There will also be safeguards to strengthen oversight on how Ukraine allocates defence contracts, which have been a source of controversy in the past.

Additionally, there will be “Made In Europe” criteria to ensure the €90 billion fosters Ukraine’s and Europe’s domestic defence industries. Only when the equipment is not readily available on the continent will purchases outside Europe be allowed.

Assets still on the table

Resorting to joint debt means the cash balances from the Russian assets will not be touched, as was originally planned in the reparations loan.

However, in their conclusions, EU leaders say they reserve “the right” to tap the assets, or at least try, sometime in the future, as a way to repay the €90 billion borrowing.

“For me, it’s very difficult and very premature today to say how this will be translated in actual terms,” a senior Commission official said when asked about the meaning.

“I think the message is pretty political, which is to say that the option to use the cash balance assets of the Russian Central Bank is not off the table.”

The addition of the assets into the final wording is considered a way to placate those countries that were most vocally supportive of the reparations loan, particularly Germany, and had publicly ruled out the idea of common borrowing.

President Zelenskyy hailed the decision as an “important victory” for his country.

“Without these funds, it would be very difficult for us. In any case, this is tied to Russian reparations,” he said. “For us, this is a reinforcement. It is a signal to the Russians that there is no point for them to continue the war because we have financial support, and therefore, we will not collapse on the front line. We will support our army and our people.”

Dec 19 (Reuters) – The U.S. military launched large-scale strikes against dozens of Islamic State targets in Syria on Friday in retaliation for an attack on American personnel, U.S. officials said.

A U.S.-led coalition has been carrying out airstrikes and ground operations in Syria targeting Islamic State suspects in recent months, often with the involvement of Syria’s security forces.

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Defense Secretary Pete Hegseth said the strikes targeted “ISIS fighters, infrastructure, and weapons sites” and that the operation was “OPERATION HAWKEYE STRIKE.”

“This is not the beginning of a war — it is a declaration of vengeance,” Hegseth said. “Today, we hunted and we killed our enemies. Lots of them. And we will continue,” he added.

Trump said on social media that the Syrian government fully supported the strikes and that the U.S. was inflicting “very serious retaliation.”

At a speech in North Carolina on Friday night, Trump called it a “massive” blow against the ISIS members that the U.S. blames for the Dec. 13 attack on coalition forces.

“We hit the ISIS thugs in Syria. … It was very successful,” Trump said at a rally in Rocky Mount, North Carolina.

U.S. Central Command said the strikes hit more than 70 targets across central Syria, adding that Jordanian fighter jets supported the operation.

One U.S. official said the strikes were carried out by U.S. F-15 and A-10 jets, along with Apache helicopters and HIMARS rocket systems.

Syria reiterated its steadfast commitment to fighting Islamic State and ensuring that it has “no safe havens on Syrian territory,” according to a statement by the foreign ministry.

Two U.S. Army soldiers and a civilian interpreter were killed on Saturday in the central Syrian town of Palmyra by an attacker who targeted a convoy of American and Syrian forces before being shot dead, according to the U.S. military. Three other U.S. soldiers were also wounded in the attack.

About 1,000 U.S. troops remain in Syria.

The Syrian Interior Ministry has described the attacker as a member of the Syrian security forces suspected of sympathizing with Islamic State.

Syria’s government is led by former rebels who toppled leader Bashar al-Assad last year after a 13-year civil war, and includes members of Syria’s former Al Qaeda branch who broke with the group and clashed with Islamic State.

Syria has been cooperating with a U.S.-led coalition against Islamic State, reaching an agreement last month when President Ahmed al-Sharaa visited the White House.

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Nine people were killed and at least 10 others wounded when gunmen opened fire inside a South African pub early Sunday, sparking a manhunt for the attackers in the country’s second mass shooting in less than a month.

The shooting happened just before 1 a.m. at KwaNoxolo tavern in Bekkersdal, a township located 28 miles west of Johannesburg. Police said about 12 unknown suspects in a white mini-bus and a silver sedan opened fire at pub patrons and continued to shoot randomly as they sped away from the scene.

“Some victims were randomly shot in the streets by unknown gunmen,” police said.

SHOOTING AT CROWDED SOUTH CAROLINA BAR LEAVES AT LEAST 4 DEAD, 20 OTHERS INJURED

Maj. Gen. Fred Kekana, Gauteng’s acting provincial commissioner, told The Associated Press that the gunmen, some of whom covered their faces with balaclavas, were armed with an AK-47 rifle and several 9mm pistols.

TRUMP BLOCKS SOUTH AFRICA FROM 2026 G20 SUMMIT FOR ALLEGED ‘HORRIFIC HUMAN RIGHTS ABUSES’

Authorities have launched a manhunt for the suspects, led by Gauteng’s Serious and Violent Crime Investigations unit in coordination with the Crime Detection Tracing Unit.

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The attack follows a string of mass shootings at bars — often called shebeens or taverns in South Africa. Earlier this month, multiple gunmen opened fire at an unlicensed bar near the capital, killing at least 12 people and injuring 13 others.

The Associated Press contributed to this report.