A 3am deal following hours of negotiations to organise a €90 billion loan that will keep Ukraine from running out of money proved the European Union can still take big decisions when its back is against the wall.
This summit of EU leaders in Brussels was billed as a test of Europe’s ability to remain a relevant player on the world stage and command a seat at the table in future peace negotiations between Washington, Moscow and Kyiv.
Under the surface, though, the agreement to extend a large EU loan to Ukraine exposed something that should worry those wedded to the consensus-based way questions are settled in the European system.
A tear that Hungary’s far-right prime minister Viktor Orban has spent years pulling at in the fabric of the EU tent has just become bigger.
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Orban and two other populist leaders, Slovakia’s Robert Fico and new Czech Republic prime minister Andrej Babis, opted out of the loan plan.
[ Ukraine deal: EU leaders agree €90bn loan after frozen Russian assets plan failsOpens in new window ]
A previous 26-1 divide in the room on Ukraine may become 24-3. That matters for leaders’ European Council summits in the future.
The original proposal was to use €210 billion of Russian state assets, frozen in Europe by economic sanctions, to finance a €90 billion loan to Ukraine.
Belgium, which hosts the financial institution where most of the Russian cash is trapped, wanted unlimited guarantees that all costs of any fallout would be covered by the EU together. It became clear late on Thursday evening that would not fly with other leaders.
Throughout the day there had been murmurings, both inside the room where leaders were meeting and among their officials and diplomats outside, that a previously shelved “plan B” might be back in play.
That option, where the EU would borrow €90 billion on the markets, had been ruled out weeks ago.
German chancellor Friedrich Merz and other “frugal” leaders have traditionally opposed the EU taking on common debt. Orban indicated he would not sign off on any loan to Ukraine.
When the plan to tap Russia’s assets began to run up against a Belgian wall, some quietly began to have second look at the joint EU loan.
It is understood Paris and Rome may have acted as a back channel to test whether Orban could be shifted, two diplomatic sources said.
Late on Thursday a workaround was put before the 27 leaders. The proposal – relying on emergency powers – would allow Hungary, Slovakia and Czech Republic to take no part in the loan, but not oppose everybody else moving ahead.
The last time the EU had to rely so heavily on emergency powers was during the bailout era after the 2008 crash.
[ Putin accuses EU of attempting ‘daylight robbery’ of Russian assetsOpens in new window ]
Similar measures were used last week to remove Orban’s ability to veto the regular renewal of economic sanctions on Russia, by shifting the decision to majority rather than unanimity rules.
The summit broke up with an agreement for a €90 billion loan to fund Ukraine for the next two years. That puts Kyiv in a much stronger position in peace talks.
Belgium’s prime minister Bart De Wever emerged the big winner. Italy’s Giorgia Meloni, a former arch Eurosceptic, has quietly become one of the most influential leaders around the table.
Both Merz and European Commission president Ursula von der Leyen left with bloody noses after efforts to use Moscow’s frozen assets collapsed.
The more concerning trend is the length the EU system is being forced to stretch to get around the fact it has become impossible for all 27 governments to find political agreement on the war in Ukraine.
