US President Donald Trump’s administration is opposed to the EU’s plan to fund Ukraine’s war effort with the proceeds of frozen Russian assets, Bloomberg reported on Monday.
Unnamed sources close to the discussions reportedly told Bloomberg that the Trump regime will not participate in the plan. Administration officials reportedly broke the news to their European counterparts on the sidelines of the International Monetary Fund meeting in Washington last week – claiming concern over potential “risks to market stability” as well as a general lack of commitment to the plan.
The so-called “reparations loan” has been in the works since this summer, intended as a sustainable alternative to the aid provided by Ukraine’s allies. The loan, backed by the better part of $200 billion in Russian assets immobilized in Europe, would not be repaid by Ukraine until it received compensation from Russia for the damage caused by the Kremlin’s war.
Crucially, the Russian assets themselves would not be confiscated. Instead, they would be replaced with EU bonds of the same value.
The plan faced its first hurdle in the form of EU member country Hungary’s likely opposition, but the European Commission formulated the plan in such a way as to bypass its veto.
However, Russia-aligned countries are not alone in balking. Belgium’s Euroclear bank is home to the majority of Russia’s frozen assets in Europe – and Brussels is concerned that it could therefore be held liable for repayment.
The European Commission has been seeking the involvement of other Group of Seven (G7) countries partly as a way to assuage these fears. Although Britain and Canada have indicated their interest, and the value of Russian assets frozen in the US is relatively minimal, White House withdrawal is a blow to the plan.
The revelation of Team Trump’s “reparations loan” hesitancy coincided with Trump’s apparent U-turn back towards Russia in recent days, following his two-hour-long phone conversation with the Kremlin autocrat.
The meeting with President Volodymyr Zelensky at the White House, one day after the Putin-Trump call, according to some present, became heated on Friday when Trump demanded Ukraine cede eastern territory to Russia or “be destroyed,” as the Financial Times reported.