Possibility of Harris victory over Trump stalls $50bn loan to Ukraine – Politico

Politico, citing a number of unnamed officials, has reported that the rising popularity of US presidential candidate Kamala Harris has diminished the likelihood of a swift agreement on the terms of a US$50 billion loan to Ukraine.

Source: European Pravda, citing Politico

Details: Prior to President Joe Biden exiting the White House race, the potential return of Donald Trump to the presidency had driven diplomats across the Atlantic to push past their disagreements and expedite the loan process with hopes of completing it by year’s end.

The possibility of a Harris victory has reduced the sense of urgency around the loan. While officials had been concerned that Trump might scrap the agreement and reduce aid to Ukraine, they now feel confident that the Democratic candidate is unlikely to take such actions and that she actually has a chance of winning the presidency.

Consequently, the split between the EU and the US over the subtleties of a loan that would be repaid from the profits from the investment of frozen Russian assets is becoming increasingly apparent, two EU officials familiar with the talks said.

"The whole idea was to Trump-proof [aid to Ukraine] but it's a different situation now with Harris," said one of the officials, who, like the others, wished to remain anonymous.

The loan to Ukraine was initially agreed upon by the G7 governments in June, yet the EU and the US remain at odds over the finer details of the arrangement.

With most of the assets frozen after Russia’s invasion of Ukraine in February 2022 held in Europe, Washington is pressing the EU to ensure they remain frozen until Moscow pays post-war reparations to Ukraine. This would prevent the US from being liable for repayment if the assets were to be unfrozen.

However, fulfilling this EU demand is challenging as it requires unanimity, and several European countries are opposed to the condition.

Negotiations between EU and US officials on Monday ended without reaching an agreement, as the US delegation insisted on an indefinite freeze of Russian assets.

Three EU diplomats said that a discussion scheduled for Wednesday between 27 EU ambassadors on amending sanctions rules was cancelled at the last minute due to the European Commission's unpreparedness.

The existing EU sanctions rules, which require renewal every six months, permit a single country to unfreeze assets. Washington fears this could undermine the loan arrangement, as the US is required to involve Congress in any transaction involving taxpayer money. This requirement could delay the process past the year-end deadline.

Background: In June, G7 leaders committed to finalising an agreement by the end of October to secure aid to Ukraine before the US presidential elections.

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