ECB Blocks €140 Billion Ukraine Loan Backstop
The European Central Bank has refused to act as a financial backstop for a massive €140bn EU loan to Ukraine, dealing a serious blow to Brussels’ plan to fund Kyiv using frozen Russian assets.
Why? The ECB says the proposal would violate EU treaty rules banning “monetary financing”, essentially, central banks can’t directly fund government spending.
Now, the EU is scrambling for alternatives, while Belgium demands ironclad guarantees from all 27 member states before committing. With US-led peace talks looming and sanctions needing renewal every 6 months, the clock is ticking.
Ukraine needs billions to survive the next two years of war. But legal, financial, and political hurdles are mounting.
Source: FT