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EU leaders agree joint borrowing to fund Ukraine, setting aside plan to use Russian frozen assets

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European Union leaders decided on Friday to borrow cash to fund Ukraine’s defence against Russia for the next two years rather than use frozen Russian assets, sidestepping divisions over an unprecedented plan to finance Kyiv with Russian sovereign cash.

“Today we approved a decision to provide 90 billion euros to Ukraine,” EU summit chairman Antonio Costa told a news conference early on Friday morning after hours of talks among the leaders in Brussels, Reuters reported. “As a matter of urgency, we will provide a loan backed by the European Union budget.”

The leaders also gave the European Commission a mandate to keep working on a so-called reparations loan based on Russian immobilised assets but that option proved unworkable for now, above all due to resistance from Belgium, where the bulk of the assets is held.

The idea of EU borrowing initially seemed unworkable as it requires unanimity and Hungary’s Russia-friendly Prime Minister Viktor Orban had opposed it. But Hungary, Slovakia and the Czech Republic agreed to let the scheme go ahead as long as it did not impact them financially.

The EU leaders said Russian assets, totalling 210 billion euros in the EU, will remain frozen until Moscow pays war reparations to Ukraine. If Moscow ever takes such a step, Ukraine could then use they money to pay back the loan.

USE OF RUSSIAN ASSETS TO COMPLEX AT THIS STAGE

“This is good news for Ukraine and bad news for Russia and this was our intention,” German Chancellor Friedrich Merz said.

The stakes for finding money for Kyiv were high because without the EU’s financial help, Ukraine would run out of money in the second quarter of next year and most likely lose the war to Russia, which the EU fears would bring closer the threat of Russian aggression against the bloc.

The decision follows hours of discussions among leaders on the technical details of an unprecedented loan based on the frozen Russian assets, which turned out to be too complex or politically demanding to resolve at this stage.

The main difficulty was providing Belgium, where 185 billion euros of the total Russian assets in Europe are held, with sufficient guarantees against financial and legal risks from potential Russian retaliation for the release of the money to Ukraine.

“There were so many questions on the Reparations Loan, we had to go to Plan B. Rationality has prevailed,” Belgian Prime Minister Bart De Wever told a news conference. “The EU has avoided chaos and division and remained united,” he said.

HUNGARY SCORES A WIN

With public finances across the EU already strained by high debt levels, the European Commission had proposed using the Russian assets for a loan to Kyiv or joint borrowing against the EU budget.

Using the latter option allowed Orban to claim a diplomatic victory.

“Orban got what he wanted: no reparation loan. And EU action without participation of Hungary, Czech Republic and Slovakia,” one EU diplomat said.

‘CAN’T AFFORD TO FAIL’

Several EU leaders arriving at the summit said it was imperative they find a solution to keep Ukraine financed and fighting for the next two years. They were also keen to show European countries’ strength and resolve after U.S. President Donald Trump last week called them “weak”.

“We just can’t afford to fail,” EU foreign policy chief Kaja Kallas said.

Ukrainian President Volodymyr Zelenskiy, who took part in the summit, urged the bloc to agree to use the Russian assets to provide the funds he said would allow Ukraine to keep fighting.

“The decision now on the table – the decision to fully use Russian assets to defend against Russian aggression – is one of the clearest and most morally justified decisions that could ever be made,” he said.

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Iran claims it targeted a US-linked oil tanker in Strait of Hormuz

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Iran’s Islamic Revolutionary Guard Corps (IRGC) said Thursday that it carried out an attack on an oil tanker linked to a U.S. company in the Strait of Hormuz after the vessel allegedly ignored repeated warnings from Iranian authorities.

In a statement, the IRGC said the tanker Safesea Vishnu, which it described as owned by a U.S. company and sailing under the flag of the Marshall Islands, was struck north of the strategic waterway early in the morning.

Iranian officials claimed the ship failed to comply with maritime instructions issued by Iranian forces operating in the area.

The IRGC warned that shipping traffic in the Persian Gulf and the Strait of Hormuz faces increasing risks, placing responsibility for the heightened tensions on the United States. The IRGC urged commercial vessels transiting the region to follow Iranian maritime regulations in order to avoid potential attacks.

The incident comes amid a broader escalation of hostilities between Iran, the United States, and Israel.

On March 2, Tehran announced it was closing the Strait of Hormuz in response to ongoing U.S. and Israeli military operations against Iran. The strait is one of the world’s most critical energy corridors, carrying a significant share of global oil shipments.

Since the announcement, shipping and insurance costs in the region have surged, while global oil prices have risen amid fears of supply disruptions. Analysts warn that prolonged instability in the waterway could have major economic consequences worldwide.

The reported attack also follows continued U.S. and Israeli airstrikes on Iranian targets that began on February 28. Iranian authorities say the strikes have killed around 1,300 people and wounded more than 10,000 others.

In response, Tehran has launched drone and missile attacks targeting Israeli territory as well as locations in Iraq and several Gulf states that host U.S. military facilities, raising concerns about a widening regional conflict and threats to international shipping routes.

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US intelligence says Iran government is not at risk of collapse: report

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U.S. intelligence indicates that Iran’s leadership is still largely intact and is not at risk of collapse any time soon after nearly two weeks of relentless U.S. and Israeli bombardment, Reuters reported citing three ​sources familiar with the matter.

A “multitude” of intelligence reports provide “consistent analysis that the regime is not in danger” of collapse and “retains control of the Iranian public,” ‌said one of the sources, all of whom were granted anonymity to discuss U.S. intelligence findings.

The latest report was completed within the last few days, the source said.

With political pressure building over soaring oil costs, President Donald Trump has suggested he will end the biggest U.S. military operation since 2003 “soon.” But finding an acceptable end to the war could be difficult if Iran’s hardline leaders remain firmly entrenched.

The intelligence reporting underscores the cohesion ​of Iran’s clerical leadership despite the killing of Supreme Leader Ayatollah Ali Khamenei on February 28, the first day of the U.S. and Israeli strikes.

Israeli officials in closed discussions also ​have acknowledged there is no certainty the war will lead to the clerical government’s collapse, a senior Israeli official told Reuters.

The sources stressed that ⁠the situation on the ground is fluid and that the dynamics inside Iran could change.

The Office of the Director of National Intelligence and the Central Intelligence Agency declined to comment.

The ​White House did not immediately respond to a request for comment.

SHIFTING OBJECTIVES

Since launching their war, the U.S. and Israel have struck a range of Iranian targets, including air defenses, nuclear sites, and ​members of the senior leadership.

The Trump administration has given varying reasons for the war. In announcing the beginning of the U.S. operation, Trump urged Iranians to “take over your government,” but top aides have since denied that the objective was to oust Iran’s leadership.

In addition to Khamenei, the strikes have killed dozens of senior officials and some of the highest-ranking commanders in the Islamic Revolutionary Guard Corps (IRGC), an elite paramilitary force that ​controls large parts of the economy.

Still, the U.S. intelligence reports indicate that the IRGC and the interim leaders who assumed power after Khamenei’s death retain control of the country.

The Assembly ​of Experts, a group of senior Shiite clerics, earlier this week declared Khamenei’s son, Mojtaba, the new supreme leader.

Israel has no intention of allowing any remnants of the former government to stay intact, said a ‌fourth source ⁠familiar with the matter.

It is unclear how the current U.S.-Israeli military campaign would topple the government.

It would likely require a ground offensive that would allow people inside Iran to safely protest in the streets, said the source.

The Trump administration has not ruled out sending U.S. troops into Iran.

INTELLIGENCE SUGGESTS KURDS LACK FIREPOWER TO FIGHT IRAN

Reuters reported last week that Iranian Kurdish militias based in neighboring Iraq consulted with the U.S. about how and whether to attack Iran’s security forces in the western part of the country.

Such an incursion could put pressure on Iranian security services ​there, allowing Iranians to rise up against the ​government.

Abdullah Mohtadi, the head of the ⁠Komala Party of Iranian Kurdistan, part of a six-party coalition of Iranian Kurdish parties, said in an interview on Wednesday that the parties are highly organized inside Iran and that “tens of thousands of young people are ready to take up arms” against the government if they receive ​U.S. support.

Mohtadi said he has received reports from inside Iranian Kurdistan that IRGC units and other security forces have abandoned bases ​and barracks out of fear ⁠of U.S. and Israeli strikes.

“We have been witnessing tangible signs of weakness in Kurdish areas,” he said.

But recent U.S. intelligence reports have cast doubt on the ability of the Iranian Kurdish groups to sustain a fight against Iranian security services, according to two sources familiar with those assessments.

The intelligence indicates that the groups lack the firepower and numbers, they said.

The Kurdish Regional Government, which governs ⁠the autonomous region ​of Iraqi Kurdistan where the Iranian Kurdish groups are based, did not immediately respond to a request for ​comment.

The Iranian Kurdish groups have in recent days asked senior officials in Washington and U.S. lawmakers for the U.S. to provide them with weapons and armored vehicles, another person familiar with the matter said.

But Trump said on Saturday ​that he had ruled out having the Iranian Kurdish groups go into Iran.

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As many as 150 US troops wounded so far in Iran war: report

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As many as 150 U.S. troops have been wounded in the 10-day-old ​war with Iran, Reuters reported citing two people familiar with the matter.

The casualty figure has not been previously reported. Prior to Reuters’ publication of the figure, the Pentagon had only disclosed eight U.S. personnel seriously injured.

In a statement after ​Reuters published its report, the Pentagon estimated the figure to be approximately ​140 wounded and said the vast majority of them were ⁠minor.

“Since the start of Operation Epic Fury, approximately 140 U.S. service members ​have been wounded over 10 days of sustained attacks,” said chief Pentagon ​spokesperson Sean Parnell.

He said 108 of the wounded service members had already returned to duty.

Parnell said the eight seriously wounded service members were receiving the highest level of medical ​care.

Reuters could not determine the types of injuries and whether they include traumatic brain ​injuries, which are common after exposure to blasts.

Iran has launched retaliatory strikes against U.S. military bases ‌since ⁠the start of the conflict on Feb. 28. It has also struck diplomatic missions in Arab Gulf states as well as hotels and airports and damaged oil infrastructure.

The Pentagon says the number of Iranian strikes has fallen sharply ​since the start of ​the war, as ⁠the U.S. military bombs Iran’s weapons inventories and targets Iran’s more limited number of missile launchers.

Asked if ​Iran was a stronger adversary than he expected when the ​U.S. military ⁠drew up its war plans, General Dan Caine, chairman of the Joint Chiefs of Staff, told reporters earlier on Tuesday that the fight was not harder than ⁠expected.

“I think ​they’re fighting, and I respect that, but ​I don’t think they are more formidable than what we thought,” Caine told a Pentagon briefing.

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