EUROPEAN COUNCIL: Joint Debt To Fund Ukraine For 2026 As Belgian PM Holds Firm
A marathon European Council summit that ran into the early hours of 19 December resulted in a deal to provide Ukraine with a EUR90bln loan that will not have to be repaid until Russia pays reparations to Kyiv once the war eventually ends. Rather than the preferred plan of Commission President Ursula von der Leyen and German Chancellor Friedrich Merz, which envisaged using frozen Russian assets held in the EU as collateral, the loan will be financed by joint debt issuance guaranteed by the EU budget.
- For months, Belgian PM Bart De Wever had held firm against calls to use the hundreds of billions of euros in frozen Russian assets held at Euroclear. With EU leaders unwilling to provide unlimited financial guarantees, De Wever maintained his stance and refused to back the frozen assets plan. Italy, Malta, and Bulgaria also voiced support for joint debt issuance. A factor that may have also been underestimated was the US' opposition to using the frozen Russian assets, with the Trump administration believed to have warned such a plan could prolong the war.
- Ukrainian President Volodymyr Zelenskyy will come away with the funding required to continue his country's defensive effort (in 2026 at least), meaning the summit can be viewed as a success for Kyiv.
- For De Wever strong public backing in Belgium for maintaining a hardline stance should win domestic plaudits, but it could result in a less accommodating Commission in the future on issues such as Belgium's position under the excessive deficit procedure.
- The leaders of the populist eurosceptic bloc in central Europe; Hungarian PM Viktor Orbán, Slovakian PM Robert Fico and Czech PM Andrej Babiš, were able to secure a carve out for their countries, in which they did not oppose the joint debt issuance plan but will not have to contribute, representing a domestic PR win for all three.
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EUROPEAN PARLIAMENT: Group Ldrs Look To Restrict Secret Votes & Hobble Far-Right
The Conference of Presidents (the heads of the political groups in the European Parliament) holds a meeting at 16:00CET (10:00ET, 15:00GMT) intended to discuss how to cut down on the use of secret ballots in plenary session votes. Making secret ballots more difficult to hold could limit the prospects of the broadly centrist coalition of groups that backed Commission President Ursula von der Leyen in 2024 being usurped in more votes by the 'Venezuela' coalition of centre-right, right and far-right groups.
- Politico notes, "The far right has increasingly asked for them, enabling centrist MEPs to discreetly break with deals negotiated by their own leadership — a tactic that helped blow up the agreement to cut green reporting rules for companies, which ultimately was passed thanks to a right-wing majority."
- At present, in order to call for a secret ballot, MEPs or groups reaching the 'high threshold' of one-fifth of MEPs (144) must do so before the vote takes place. The two groups on the far-right, the Patriots for Europe (PfE, 85 seats) and Europe of Sovereign Nations (ESN, 27), fall short of this threshold alone. However, if the conservative European Conservatives and Reformists (ECR, 79) side with the PfE and ESN, then the 'high threshold' is met.
- In order to change a rule of procedure, the constitutional affairs committee must evaluate a proposal before putting it before the plenary session, where a majority vote is required.
EGB OPTIONS: Bund Put Ladder seller
RXZ5 129.00/128.50/128.00p ladder, sold at 22 in 3k.
SOFR: SFRZ7-U8 Strip Blocked
Latest block trade lodged at 08:43:45 London/03:43:45 NY:
- SFRZ7-U8 strip 1K blocked, CME points to a buyer, although looks more seller initiated when looking at prevailing bids and offers at the time.
