European Central Bank Refuses to Back Loan to Ukraine

Brussels: The European Central Bank has refused to support a payment of 140 billion euros (162.53 billion dollars) for Ukraine, undermining the European Union's plan to provide a 'compensation loan' backed by frozen Russian assets. According to Yemen News Agency, the Financial Times reported on Tuesday, citing several officials, that the European Central Bank concluded that the European Commission's proposal violates its mandate. This decision adds to the challenges that Brussels faces in its efforts to raise the loan, which was to be secured by the frozen assets of the Russian central bank held at Euroclear, the Belgian securities depository. The refusal of the European Central Bank to back the loan proposal presents a significant setback for the European Union's financial strategy regarding Ukraine. The plan was initially designed to utilize the assets frozen as part of sanctions against Russia, aiming to support Ukraine amidst its ongoing financial challenges. The European Commission now faces the task of re-evaluating its strategy and exploring alternative solutions to fulfill its financial commitments to Ukraine, as the blocked assets remain inaccessible under the current legal and financial frameworks dictated by the European Central Bank's mandate.