Eurobonds could serve as an alternative source of funding for Ukraine; however, Budapest has blocked them, sources in diplomatic circles told Politico, DW reports.
Hungary has officially ruled out the possibility of issuing eurobonds to support Ukraine. This move deprives the European Union of a potential 'Plan B' if it fails to find a way to use frozen Russian state assets to finance a €165 billion loan to Kyiv. This was reported on Friday, December 5, by Politico, citing sources among European diplomats.
According to the publication, Budapest's refusal to issue joint bonds worth €90 billion, backed by the seven-year EU budget, came just hours before a dinner between German Chancellor Friedrich Merz and Belgian Prime Minister Bart De Wever in Brussels, where the loan was to be discussed. "I take the concerns and objections of the Belgian Prime Minister very seriously," Merz told reporters the night before. "I do not want to persuade him; I want to convince him of the correctness of the path we are proposing." The Chancellor canceled a planned trip to Norway for this purpose.
Eurobonds - An Alternative Source of Funding for Kyiv
Eurobonds could serve as an alternative source of funding for Ukraine, two sources in diplomatic circles told Politico. Berlin's proposal includes guarantees of 25 percent of the funds to convince Belgium to transfer frozen Russian money to Ukraine, but De Wever wants broader guarantees from the entire EU that Belgium will be insured for the full amount or even more, the publication notes.
On December 3, the European Commission proposed eurobonds as one of the asset-backed options to guarantee replenishment of Ukraine's budget, which is struggling against Russian aggression, until April 2026. However, a unanimous decision from all 27 member states is required to increase public debt through the EU budget to support Ukraine.
US Urges EU Countries Not to Provide Loans to Kyiv Against Russian Assets
US authorities are trying to persuade some EU countries to oppose the European Commission's plan to use part of the frozen Russian assets for a reparations loan to Ukraine. This was reported on December 5 by Bloomberg, citing European diplomats familiar with the situation.
According to the agency, US officials have told representatives of several European countries that these assets are necessary for reaching a peace agreement between Moscow and Kyiv and cannot be used to continue the war. At the end of November, the Belgian Prime Minister made a similar argument, stating that the EU's plan could jeopardize the chances of a potential peace agreement.
During peace negotiations on Ukraine promoted by US President Donald Trump, the transfer of Russian assets frozen in the EU to the United States was reportedly discussed. Chancellor Friedrich Merz opposed this, stating that it is "an intra-European issue" and there is "no economic possibility" to transfer the discussed funds to the US.
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