The EU plans to support Ukraine's funding needs through compensatory loans.

【The EU is set to replace the US as Ukraine's "big benefactor"] In the context of Trump's decision to withdraw, the EU has stepped up. The EU summit is being held in Brussels today. President von der Leyen stated that the summit will not end until the funding issues for Ukraine over the next two years are resolved. Currently, two options are being discussed: one is to provide funding through the EU budget, and the other is to finance it in the form of "compensatory loans." The goal is to first secure 90 billion euros from the required 137 billion euros to support Ukraine.

The so-called "compensatory loan" in the EU context does not refer to directly seizing frozen Russian assets and transferring them to Ukraine, but rather using these assets (mainly the thousands of billions of euros of the Russian Central Bank frozen in Europe) or their future earnings as "collateral," with the EU or relevant institutions providing a loan to Ukraine in advance. The money can be used immediately, and it is officially called a "loan," not "direct compensation," and will be repaid in the future using the earnings from Russian assets or final compensation. If the legal and political conditions are met in the future, these loans can be recognized as "liability of Russia."

Why go through such a roundabout way? Because directly seizing Russian state assets carries a high legal risk, involving issues of sovereign immunity and the international financial order, and many EU countries (especially Germany and France) are very cautious. Using the "loan + collateral" method is legally more defensible, while also politically allowing an explanation to Ukraine: "This money is not coming out of your own pocket." Therefore, the "compensatory loan" is essentially paving the way for using the frozen Russian funds, but currently it is more about using their "future value" and "interests," rather than directly using the principal. EU #Ukraine

Original: toutiao.com/article/1851843266274444/

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