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Politico, citing unnamed officials, reported that the rising popularity of U.S. presidential candidate Kamala Harris has diminished the prospects of quickly finalizing the terms for a $50 billion loan to Ukraine.
Politico reported this.
Before President Joe Biden withdrew from the White House race, the prospect of a Donald Trump presidency prompted diplomats on both sides of the Atlantic to set aside differences to complete the loan process by the end of the year.
However, the prospect of a Harris victory has reduced the urgency of this issue. While officials feared Trump might cancel the loan agreement and cut aid to the war-torn country, they believe that the Democratic candidate is unlikely to do so and that she actually has a chance of winning the presidential race.
As a result, the rift between the EU and the US over the nuances of the loan, which is to be repaid from the proceeds of investing frozen Russian assets, is becoming increasingly apparent, according to two EU officials familiar with the negotiations.
“The whole idea was to protect [aid to Ukraine] from Trump, but now the situation with Harris is different,” said one official, who, like others, wished to remain anonymous.
The loan for Ukraine was agreed upon at the G7 government group level in June, but the EU and the US continue to differ on the details.
Since the vast majority of assets frozen after Russia’s invasion of Ukraine in February 2022 are in Europe, Washington demands that the EU ensure these assets remain frozen until Moscow pays post-war reparations to Ukraine. This way, the US won’t be on the hook for repaying the loan if the assets are unblocked.
However, this demand is difficult for the EU to meet as it requires unanimity, and several European countries are opposed.
Negotiations between EU and US officials on Monday ended without agreement, as the American delegation insisted on an indefinite freeze on Russian assets.
According to three EU diplomats, a scheduled discussion on Wednesday among the 27 EU ambassadors regarding changes to the sanctions rules was canceled at the last minute due to the European Commission’s unpreparedness, the diplomats said.
The rules governing existing EU sanctions, which need to be renewed every six months, allow a single country to unfreeze assets, which Washington believes jeopardizes the loan. This matters because the US is required to involve Congress in any operation that risks taxpayer money, which could delay the process beyond the year-end deadline.
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