Russian President Vladimir Putin on Friday struck an upbeat tone after the EU failed to agree on seizing Russian assets to fund a loan to Ukraine, instead deciding to issue a €90 billion loan ($105.35 billion) backed by the bloc's common budget.
Speaking at his end-of-year press conference, Mr Putin was in defiant mode over Ukraine. The EU plan had failed because there would have been “grave consequences for the robbers,” he said adding that Russia would respond to an attack on a Russian controlled tanker in the Mediterranean.
During the press conference, Mr Putin was asked about the incoming news that “another of our tankers in the Mediterranean Sea has been attacked”.
Ukraine said it had hit a Russian “shadow fleet” tanker with aerial drones in neutral waters of the Mediterranean. This was Kyiv's first strike there in the war that began in February 2022.
“This is done, among other things, with a pragmatic goal – to increase insurance premiums," he said. "But this will never lead to the expected result, will not disrupt supplies, and, in the end, will only create an additional threat. A response from our country will follow.
“There will always be a response from our side.”
The Russian leader was speaking hours after Europe abandoned efforst to take over €210 billion ($246 billion) worth of Russian assets held in the EU after Belgium, which holds most of the assets, warned of a costly legal backlash.
Echoing warnings by Belgian Prime Minister Bart De Wever that Moscow would have probably fought back in Russian-friendly jurisdictions, Mr Putin said: “Above all else, we will defend our interests, primarily in the courts. We will try to find a jurisdiction that will be independent of political decisions.”
Commenting on continuing US-mediated talks to end the nearly four-year war in Ukraine started by Russia's full-scale invasion, Mr Putin said: “We are ready and willing to end this conflict peacefully … by addressing the root causes that led to this crisis.”
These include, according to him, Ukraine's desire to join Nato and the view that Ukraine is culturally inseparable from Russia – views that are strongly rejected by Ukraine. However, the Ukrainian President Volodymyr Zelenskyy has recently offered to drop Nato accession demands in exchange for strong US security guarantees.
This has reportedly been offered by the US but talks on territorial concessions remain a sticking point. Ukrainian and US delegations are scheduled to hold new talks on Friday and Saturday in America.
'Significant support'
Mr Putin was speaking just hours after French President Emmanuel Macron said it was time for Europe to start engaging with Russia again. “I believe that it's in our interest as Europeans and Ukrainians to find the right framework to re-engage this discussion,” Mr Macron said. Europeans should find the means to do so “in the coming weeks”, he added.
After talks that ended in the early hours of the morning, the EU's 27 leaders gathered in Brussels struck a deal to provide Ukraine with a loan of €90 billion to plug its looming budget shortfalls.
They failed to agree on using frozen Russian assets, a plan that had strong support from Germany, Poland and Scandinavian and Baltic states but pushback from Belgium, Italy, Bulgaria and Malta.
Before the meeting, Mr Zelenskyy had described this first option as “fair”, “moral” and “legal”. The EU estimates Ukraine needs an extra €135 billion ($158 billion) to stay afloat over the next two years, with the cash crunch set to start in April.
After scrambling for a solution, EU leaders settled on a loan for the next two years backed by the bloc's common budget. The European Commission will continue working on technical aspects of this proposal, which may be reconsidered at a later date. Its President Ursula von der Leyen said Ukraine would only need to repay the loan after Moscow compensates it for the damage it has caused.
“Today's decision will provide Ukraine with the necessary means to defend itself and to support the Ukrainian people,” said the European Council head Antonio Costa, who chaired the summit.
Mr Zelenskyy wrote on X that the deal “is significant support that truly strengthens our resilience”. He added: “It is important that Russian assets remain immobilised and that Ukraine has received a financial security guarantee for the coming years.”
'Rational' choice
The Danish Prime Minister Mette Frederiksen said that while she “preferred one model when we started the meeting” – an apparent reference to using frozen assets – leaders “found a way to build a bridge between the two models”.
Mr De Wever said he succeeded in convincing his counterparts that “taking Putin's money” was an emotional choice, not a rational one, due to the risk of legal challenges.
“Certainly countries close to Russia who live in animosity [towards] Russia found this emotionally satisfying – the idea of taking Putin's money,” he said. “But politics is not about emotion. It's a rational job.”
Mr De Wever warned that Mr Putin would have immediately retaliated by confiscating €17 billion of assets in Russia belonging to Euroclear, the Belgium-based financial institution that holds most of Russia's frozen assets in Europe. The Russian President may also have sought support from “jurisdictions that are friendly to him: Belarus, China, Hong Kong, South Africa”, Mr De Wever said.
'Opt-out' clauses
“This whole business was so risky, so dangerous, and raised so many questions – it was like a sinking ship, like the Titanic,” he said. “The die is cast now – and everyone is relieved.”
Hungarian Prime Minister Viktor Orban, who is Mr Putin’s closest ally in Europe, said he would not support the plan as did Robert Fico of Slovakia and so too the new Czech leader Andrej Babis. “I would not like a European Union in war," said Mr Orban. "To give money means war.” He described the use of the frozen Russian assets as a “dead end”.
Using joint debt requires a unanimous decision by the EU's 27 countries, and Hungary, Slovakia and the Czech Republic were given exemptions from the commitment to avoid a blockage.
“The 27 have jointly agreed to let the commission issue debt,” Mr Macron said. “There are simply three that are protected from its financial impact, which does not really have any consequences on the nature of the loan.”
