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  • European Union Agrees to Extend Euro Loan to Ukraine
  • Legality of Trump’s Blockade of Venezuelan Oil

By Shashi P.B.B Malla

To the chagrin of Russia, European leaders agreed last Friday to provide a massive interest-free loan to Ukraine to meet its military and economic needs for the next two years (AP/Associated Press, Dec. 19).

However, they did not bridge differences with Belgium that would have allowed them to use frozen Russian assets to raise the funds.

In fact, after nearly four years of Russia’s aggressive war, the International Monetary Fund (IMF) estimates that Ukraine will need 137 billion euros (US Dollar $ 161 billion) in 2026 and 2027.

The government in Kyiv is on the verge of bankruptcy and desperately needs the funds by spring.

The original plan had been to use some of the 210 billion euros worth of Russian frozen assets  in Europe, mostly in Belgium.

The leaders worked deep into Thursday night to reassure Belgium that they would protect it from any Russian retaliation if it backed the “reparations loan” plan.

But in the end, the leaders did not use that option, but as the talks bogged down the leaders eventually opted to borrow the money on capital markets.

“We have a deal. Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved. We committed, we delivered,” EU Council President Antonio Costa said in a post on social media.

[The European Council is responsible for setting the EU’s political agenda and providing impetus for its development. It should not be confused with the European Commission which is its executive arm].

Not all countries agreed to the loan package.

Hungary, Slovakia and the Czech Republic refuse to support Ukraine and opposed it [forgetting that it is not only fighting for itself, but for the whole of Europe], but a deal was reached in which they did not block the package and were promised protection from any financial fallout.

Hungarian Prime Minister Viktor Orban, who is Russian President Vladimir Putin’s closest ally in Europe [and is also ‘beloved’ by Trump and his MAGA crowd] and describes himself as a peacemaker, said: “I would not like a European Union in war. To give means war.”

[Orban also forgets that for all practical purposes, the EU is already at war on the side of Ukraine, supplying it with funds, arms and ammunition].

Orban described the rejected plan to use the frozen Russian assets as a “dead end”.

French President Emmanuel Macron said the deal was a major advance, saying that borrowing on capital markets “was the most realistic and practical way” to fund Ukraine and its war efforts.

German Chancellor Friedrich Merz, who had been the most prominent champion of using the Russian assets, also hailed the decision.

“The financial package for Ukraine has been finalized,” Merz said in a statement, noting that “Ukraine is granted a zero-interest loan.”

Merz added: “These funds are sufficient to cover the military and budgetary needs of Ukraine for the two years to come.”

He said the frozen assets will remain blocked until Russia has paid war reparations to Ukraine.

Ukrainian President Volodymyr Zelensky has said that would amount to 600 billion euros.

“If Russia does not pay reparations we will – in full accordance with international law – make use of Russian immobilized assets for paying back the loan,” Merz said.

Zelensky, who travelled to Brussels for a summit that took place during fiery protests by farmers angry about a proposed trade deal with five South American countries, had appealed for a quick decision to keep Ukraine afloat in the new year.

Polish Prime Minister Donald Tusk warned early on Thursday that it would be a case of sending “either money today or blood tomorrow” to help Ukraine.

The plan to use frozen Russian assets got bogged down as Belgian Prime Minister rejected the scheme as legally risky and warned that it could harm the business of Euroclear, the Brussels-based financial clearing house where 193 billion euros in frozen Russian assets are held.

Belgium was rattled last Friday when Russia’s Central Bank launched a lawsuit against Euroclear to prevent any loan being provided to Ukraine using its money, which is frozen under EU sanctions slapped on Moscow after it launched its full-scale aggressive war in February 2022.  

Russia claims its military goals will be achieved

Russian President Vladimir Putin said last Friday that Moscow’s troops were advancing across the battlefield in Ukraine [although at snail’s pace], voicing confidence that the Kremlin’s military goals would be achieved (AP, Dec. 19).

However, with the recent shot in the arms from the EU, Ukraine will be able to outlast Putin’s war for at least another two years. Whether that is the case with Putin’s war-torn and devastated economy, is anybody’s guess.

Speaking at his highly orchestrated year-end news conference, Putin declared that Russian forces have “fully seized the strategic initiative” and would make more gains by the year’s end. [This is more bravado than reality].

But it is true that Russia’s better-equipped and larger army has made slow but steady and incremental progress in Ukraine in recent months.

The annual live news conference is combined with novel nationwide call-in show that offers Russians across the country the opportunity to ask questions of Putin, who has led the country for 25 years.

Putin, who is divorced, was even asked about his love life and is reported to have blushed!

This year, observers were watching for Putin’s remarks on Ukraine and the US-backed peace plan there.

US President Donald Trump has unleashed an extensive diplomatic push to end nearly four years of fighting after Russia sent troops into Ukraine in February 2022.

But Washington’s efforts have run into sharply conflicting demands by Moscow and Kyiv.

Above all, the US is not applying the same amount of pressure on Moscow as it has on Kyiv.

Putin reaffirmed that Moscow was ready for a peaceful settlement – but only on his own sweet terms!

Moreover, the settlement would have to address the “root causes of the conflict”.

This means nothing else than that Putin is insisting on his own terms for ending the conflict – that is, he is dictating the terms.

Unfortunately, Trump is ready to appease, and the European leaders are too chicken-hearted to resist his soft corner for Putin.

Earlier last week, Putin warned that Moscow would seek to extend its gains in Ukraine if Kyiv and its Western allies reject the Kremlin demands.

Thus, in the negotiations, Putin is not willing to make any concessions at all – and a consensus cannot be reached. His attitude is hardened because he is aware that the Trump and the US are on his side.

Is this not a very peculiar situation in the so-called diplomatic negotiations? The US is supposed to be the peace mediator, but it is openly and decisively leaning towards Moscow.

The Russian leader wants all the areas in four key regions captured – not wholly – by his forces, as well as the Crimean Peninsula, which was illegally annexed back in 2014 [when the Western Powers did nothing, in spite of security guarantees]. All these are to recognized as Russian territory.

Putin has also insisted that Ukraine withdraw from some areas in eastern Ukraine that Moscow’s forces haven’t captured as yet – demands that Kyiv has rightfully rejected.   

Venezuela

President Donald Trump’s ‘blockade’ of sanctioned oil tankers off Venezuela’s coast is raising new question about the legality of his military campaign in Latin America, while fueling concerns that the US could be edging closer to a hot war [which would rightly require authorization by the US Congress, as before the 2003 Iraq War].

The Trump administration says its blockade is narrowly tailored and not targeting civilians, which would be an illegal act of war.

But some experts say seizing sanctioned oil tied to leader Nicolas Maduro could provoke a military response from Venezuela, engaging American forces in a new level of conflict that goes beyond their attacks on alleged drug boats.

“My biggest fear is this is how wars start and how conflicts escalate out of control,” said Representative Jason Crow, a Colorado Democrat who fought in Iraq and Afghanistan.

“And there are no adults in the room with this administration, nor is there consultation with Congress. So I’m very worried.”

Claire Finkelstein, a professor of national security law at the University of Pennsylvania, said the use of such an aggressive tactic without congressional authority stretches the bounds of international law and increasingly looks like a veiled attempt to trigger a Venezuelan response.

“The concern is that we are bootstrapping our way into armed conflict,” Finkelstein said.

“We’re upping the ante in order to try to get them to engage in an act of aggression that would then justify an act of self-defense on our part” (AP).

Trump has used the word ‘blockade’ to describe his latest tactic in an escalating pressure campaign against Maduro, who has been charged with narco-terrorism in the US and now has been accused of using oil profits to fund drug trafficking.

While Trump says it only applies to vessels facing US economic penalties, the move has sparked outrage among Democrats and mostly shrugs, if not cheers, from Republicans.

The president has declared the US is in ‘armed conflict’ with drug cartels in an effort to reduce the flow of drugs to American communities.

US seizes oil tanker off coast of Venezuela, again

The United States again ‘apprehended’ an oil tanker off Venezuela last Saturday, in the latest salvo of a pressure campaign by Washington, the Us government said.

Caracas slammed the seizure as theft and kidnapping, saying ‘those responsible for these serious events will answer to justice and to history for their criminal conduct.’

Venezuelan Defence Minister Vladimir Padrino Lopez voiced defiance: “We are waging a battle against lies, manipulation, interference, military threats, and psychological warfare,” adding “that will not intimidate us” (AFP/Agence France Presse, Dec. 21).

The writer can be reached at:

shashimalla125@gmail.com