MICHEL MARTIN, HOST:
European leaders are gathering in Brussels for a meeting widely described as make or break for both Ukraine's finances and EU credibility. On the table is a plan to use Russia's frozen assets as financial backing for a huge loan to Ukraine. It's a complicated, controversial framework, and Teri Schultz is with us now from Brussels to walk us through it. Good morning, Teri.
TERI SCHULTZ: Good morning, Michel.
MARTIN: So EU leaders meet regularly to boost support for Ukraine. Having had to fight Russia for years, now money is obviously an issue. You've been telling us that this plan is controversial. How come?
SCHULTZ: That's right. The main plan on the table, which has been debated for months already, is whether to use more than a hundred billion dollars' worth of Russian funds frozen in EU financial institutions as collateral for an EU loan that would keep Kyiv afloat for about two years. There's no precedent for this and agreement is seen as a test of EU unity and support for Ukraine. Now, Michel, the summit was originally scheduled for one day, but EU leaders say they're not going to let it end until there's an agreement on how to finance Ukraine. The 27 heads of state and government have been warned they may need multiple changes of clothes, what's referred to in Brussels lingo as potentially a three-shirt summit.
MARTIN: OK. A three-shirt summit. That's interesting. So the EU would use Moscow's money as its own contribution to Kyiv?
SCHULTZ: Indirectly, yes. The Russian funds wouldn't actually be transferred out of Russian ownership, but the money would be used as a guarantee for a huge EU loan to Kyiv. It would only have to be repaid by Ukraine if and when Moscow pays compensation for damage from its war. The point for the Europeans is that Moscow would have to pay for rebuilding Ukraine. The chief roadblock is the Belgian government. As nine-tenths of the immobilized Russian assets in the EU are here, Belgium fears its financial sector would suffer irreparable loss of reputation and that it would have to repay the money.
MARTIN: How likely is that?
SCHULTZ: Depends on who you ask. Belgian Prime Minister Bart De Wever says he's not pro-Kremlin, as has been accused, but he does believe that Russia will win the war and get to dictate terms like this. De Wever has therefore demanded, for example, commitments from all other EU governments to cover proportional shares of that prospective bill. As of this morning, that hasn't happened, so De Wever is sticking to his blockade.
(SOUNDBITE OF ARCHIVED RECORDING)
PRIME MINISTER BART DE WEVER: (Through interpreter) Every country in our situation would make exactly the same demands.
SCHULTZ: On the other side, here's Aaron Burnett from the European Resilience Initiative Center, where legal experts conclude the risk is virtually nil. Here's one basic reason.
AARON BURNETT: When you have a state that is violating international law so flagrantly, that state cannot suddenly just turn around and say, OK, well, I violated international law while also claiming it's protection to secure my assets.
MARTIN: So, Teri, is Belgium the main obstacle to this agreement?
SCHULTZ: It's the main but not the only obstacle, Michel. Opposition to the plan is actually growing. And Leonid Litra from the European Council on Foreign Relations says it appears Washington has a hand in that.
LEONID LITRA: The U.S. administration has been trying to reach out some of the EU states where they have more leverage and convince them that this is a bad time to issue the reparation credits since they are amid a very, you know, serious diplomatic effort to end the war.
SCHULTZ: Litra puts the chances of an agreement at only 50/50. So we'll see how long the leaders have to stay in town.
MARTIN: That's Teri Schultz in Brussels. Teri, thank you.
SCHULTZ: You're welcome.
(SOUNDBITE OF BREAK OF REALITY'S "SPECTRUM OF THE SKY") Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
