BRUSSELS — The right to use Swiss franc banknotes and coins will be enshrined in Switzerland’s constitution after voters on Sunday backed a measure designed to safeguard the use of cash in society. Preliminary official estimates revealed 69 percent of voters backed the legal amendment, which the government proposed as a counter to a similar initiative by a group called the Swiss Freedom Movement. The Swiss Freedom Movement triggered the national referendum after its initiative to protect cash collected more than 100,000 signatures, triggering a national referendum. Its initiative secured only 46 percent of the final vote after the government said some of the group’s proposed amendments went too far. The vote means Switzerland will join the likes of Hungary, Slovakia and Slovenia, which have already written the right to cold, hard cash in their constitutions. Austrian politicians are also debating whether to follow suit, as people’s payment habits become increasingly digital — especially since the pandemic. The trend has fanned Big Brother conspiracy theories that governments aim to control populations by withdrawing cash altogether. The European Central Bank’s plans to issue a virtual extension of the euro have fanned those fears, prompting the EU’s executive arm to propose a bill that will cement physical cash in societies across the bloc. Switzerland, too, has seen a drop in cash payments over the past decade. More than seven out of 10 payments at the till were in cash in 2017. In 2024, cash only featured in 30 percent of in-shop transactions, according to data from the Swiss National Bank. The Swiss Freedom Movement has previously pursued campaigns to sack unpopular government ministers, ban electronic voting, and protect citizens from professional or social retribution if they refuse to be vaccinated against Covid-19 — none of which made it to the ballot box.

The Bank of Russia is suing the European Union for keeping its state assets frozen “for an indefinite period” to serve as collateral against a €90 billion loan to Ukraine. The lawsuit will test rare emergency powers that the European Commission used last year to keep Russian state assets across the bloc, worth some €210 billion, on ice through a qualified majority. The legal loophole nullified vetoes that Kremlin-friendly countries in the EU, such as Hungary, would otherwise have had. EU leaders agreed in mid-December to raise common debt without Hungary, Slovakia and Czechia to finance Kyiv’s defense against Russian forces. Ukraine will only have to pay back the loan once Moscow ends the conflict and pays war reparations. If the Kremlin refuses, EU leaders reserve the right to tap the cash value of the frozen assets to pay itself back. In a statement Tuesday, the Bank of Russia blasted the EU’s “unlawful actions against the Bank of Russia’s sovereign assets,” saying the regulation violates “the basic and inalienable rights to access justice” and the “principle of sovereign immunity of states and their central banks.” The central bank also argued the Council of the EU committed “serious violations” of its own procedures by adopting the measure by qualified majority rather than unanimity. The Commission plans to issue a statement in response to the lawsuit, which the central bank filed at the EU’s General Court in Luxembourg. Russia’s central bank filed a separate lawsuit in Moscow last year against Brussels-based financial depository Euroclear, where the bulk of its assets lie immobilized under EU sanctions after Moscow invaded Ukraine in 2022.

BRUSSELS — Ukraine’s cash-strapped government received a small reprieve in the early hours of Friday after the International Monetary Fund approved a new $8.1 billion loan to the war-torn country. The IMF will disburse some $1.5 billion from the loan straight away, as Kyiv’s coffers are set to empty in April after years of fighting against Russian invading forces. “It is very important for us that in the fifth year of a full-scale war, against the backdrop of systemic attacks on the energy sector, Ukraine has guaranteed international financial support from partners and a resource for the stable operation of the state,” Ukrainian Prime Minister Yulia Svyrydenko posted on Facebook after the IMF’s announcement. The international lender had initially demanded more assurances over Kyiv’s financial stability before approving the loan — this came when a majority of EU countries agreed late last year to raise €90 billion in joint debt to shore up Ukraine against Russia. But the IMF’s cash cushion is tiny. Kyiv’s budget shortfall is set to widen beyond $50 billion this year, putting pressure on the EU to overcome a dispute with Hungary that’s blocking crucial financial support. The EU’s planned €90 billion loan to Ukraine would help plug the gap. But Hungary is blocking the financing package amid accusations that Ukraine is deliberately slow-walking repairs to the damaged 4,000-kilometer Druzhba pipeline, which carries vital supplies of Russian oil to Hungary, on political grounds. Ukraine has dismissed the accusations. The European Commission has also downplayed the risk of an immediate energy crunch in Hungary, which has 90 days’ worth of oil supplies it can use. In the meantime, Brussels’ top brass is trying to solve the dispute without playing into an anti-EU political campaign that Hungary’s prime minister, Viktor Orbán, is pursuing ahead of a national election in April. The Hungarian leader has also weaponized anti-Ukraine sentiment ahead of the election, with his political party, Fidesz, trailing the opposition, Tisza, in the polls by a wide margin. A loss would see Orbán’s 16-year reign come to an end. GIVE AND TAKE Some diplomats in Brussels had feared Orbán’s veto could hold up the IMF loan. The world’s lender of last resort demanded greater assurances over Kyiv’s financial health before issuing a loan, after four years of war have more than doubled the country’s debt burden to 108.7 percent of economic output. That reassurance initially arrived in mid-December, when 24 EU leaders agreed to raise €90 billion in joint debt to help finance Ukraine’s defense against Russia. Kyiv will only have to repay the money once Moscow ends the war and pays war reparations — an unlikely scenario. If the Kremlin refuses, the EU could use the cash value of frozen Russian state assets across the bloc to pay itself back. None of that matters if Orbán refuses to withdraw his veto. Recent correspondence with European Council President António Costa, however, has suggested Orbán will drop his veto if the EU assesses the damage to the Druzhba pipeline. The Hungarian leader could also relent if Brussels approves Budapest’s application for a €16 billion defense loan, according to some diplomats. The Commission’s lawyers are studying the EU treaties to see whether a legal loophole could be used to nullify the Hungarian veto. That could take time — something Kyiv doesn’t have. “Ukraine and its people have weathered a long and devastating war for over four years with remarkable resilience,” the IMF’s managing director, Kristalina Georgieva, said in a statement. “Nevertheless, the war has taken a toll on economic and social conditions, with slowing growth and the outlook remaining subject to exceptionally high uncertainty.”

FRANKFURT — European Central Bank staffers believe they must toe the line or face the consequences. That is the message from a staff survey conducted by the ECB in November and December, revealing that the majority have “no confidence” that they can voice their views without inviting retaliation from above. The findings threaten to blemish President Christine Lagarde’s legacy, raising questions about the quality of debate culture within the central bank under her leadership amid ongoing rumors that the Frenchwoman will end her eight-year term early. The results also land at an awkward moment, as the ECB faces legal action from its staff union over alleged efforts to curb free speech. The survey boasted a 75 percent response rate and was shared with staff during a Town Hall meeting on Thursday. The results found that 34 percent of respondents disagreed that they “can freely express” their views “without fear of negative consequences.” Another 24 percent of staffers were unsure how to respond to the statement. Longer-serving staff were more concerned about a possible backlash than newer hires. Lagarde publicly professes diversity. Just this week, she hailed the variety of voices from eurozone central bankers, saying that “diversity is an asset in times of high uncertainty.”  She has also famously blasted economists for forming a “tribal clique” at the 2024 World Economic Forum in Davos, insisting broader perspectives would always lead to better outcomes. That spirit is far from present at the ECB’s headquarters in Frankfurt’s east end, as far as the survey goes. In an interview last year, the ECB union vice president, Carlos Bowles, expressed concern that a “culture of fear” within the Bank will promote self-censorship and groupthink. The ECB’s attempts to prevent the union from airing these concerns in public prompted the legal action against the Bank. The union expresses concern about the survey’s outcome.  “When staff feel unsafe to speak openly, it is not just an HR matter — it becomes a policy risk,” a union spokesperson said. The disconnect between the ECB’s public messaging and perceptions on the ground may be at least partially attributed to the fact that less than a third of its staff believes “the ECB is open in its communication with employees,” as reflected in the survey. An ECB spokesperson said that the bank is “working together with staff and staff representatives to respond to the survey outcomes” and is “fostering a more open and supportive workplace by encouraging honest dialogue, normalizing learning from mistakes and reinforcing behaviors that promote safety and inclusion.” BROKEN CAREER LADDER While the vast majority of staff say they are proud of the ECB’s mission and feel inspired by its work, fewer than one in three would recommend it as a workplace. Career progression is a key concern — a common challenge in public financial institutions. Four out of 10 staffers don’t think they have good opportunities for professional development. That’s a bad look for the ECB’s career ladder. Worse when you include the fact that an additional 20 percent of staffers are unsure of how their career will progress within the central bank. There are some bright spots in the survey, depending on who you ask. While phrasing differences limit comparisons to previous surveys, there seems to be some progress in fair treatment. Nearly two-thirds of survey respondents said they feel the ECB has treated them fairly, whereas in past surveys, nearly two-thirds expressed concerns over favoritism. The ECB promises more progress. It is already translating survey results “into concrete steps— supporting managers in having more meaningful development conversations, creating more direct communication touchpoints with staff, and engaging with long‑tenure colleagues to understand and address their concerns,” the spokesperson said.

Hungarian Prime Minister Viktor Orbán on Monday blamed “an unprovoked act of hostility” from Ukraine to justify his decision to block the EU’s €90 billion loan to Kyiv, according to a letter he sent to European Council President António Costa. Orbán backed the loan in December on the basis that EU leaders exempted Czechia, Hungary and Slovakia from paying down the EU debt. That changed on Friday after Budapest and Bratislava accused Kyiv of slow walking repairs to the damaged 4,000-kilometer Druzhba pipeline, which carries Russian oil to Hungary and Slovakia. “Hungary did not oppose the decision based on the understanding that the loan will not have an impact on the financial obligations” of Prague, Budapest and Bratislava, Orbán wrote in a short letter, dated Feb. 23 and seen by POLITICO. “Recent developments have forced me to reconsider my position.” Costa’s office was not immediately available for comment. Ukraine’s war chest will run out in April without fresh funds, putting Kyiv at a disadvantage against Russian forces and ongoing U.S.-led peace talks with the Kremlin. A Russian drone attack in late January damaged the Druzhba pipeline, which transports Russian oil that is vital to Hungary’s and Slovakia’s energy needs. The European Commission last week said that both countries have 90 days’ worth of oil supplies to avoid an immediate energy crunch. Orbán said Kyiv has refused to restore crude oil supplies via the pipeline since mid-February on political grounds, an accusation Ukraine has dismissed. Hungary and Slovakia are exempt from EU sanctions on Russian product. Russian oil accounted for for 92 percent of Hungary’s energy imports last year, according to the Center for the Study of Democracy, a European policy institute. The Hungarian leader has weaponized anti-Ukraine sentiment ahead of April’s national election, with his political party, Fidesz, trailing the opposition, Tisza, in the polls by a wide margin. He has also used the pipeline issue to justify blocking the EU’s 20th sanctions package against Russia, which requires unanimous support to pass. Brussels had planned to unveil the package on the fourth anniversary of Moscow’s invasion of Ukraine, which is on Tuesday. Hungary can block the €90 billion loan because one of the three bills underpinning the financial aid also requires EU unanimity to expand the cash buffer of the EU’s long-term budget to issue the loan. EU ambassadors will discuss the sanctions package on Monday during the Foreign Affairs Council. Both initiatives remain stuck until the Druzhba pipeline crisis is resolved. “As long as this remains the case, Hungary will not support the amendment of the [multiannual financial framework] regulation necessary for the use of the EU budget headroom for the loan facility,” Orbán wrote.

BRUSSELS ― Hungary has thrown the EU’s planned €90 billion loan to Ukraine into crisis after threatening to block the deal until the flow of Russian gas resumes through the Druzhba pipeline. The Hungarian government issued the warning on Friday evening, as Prime Minister Viktor Orbán tries to weaponize anti-Ukraine sentiment ahead of a key election where he risks losing power after more than 15 years. “Ukraine is blackmailing Hungary by halting oil transit in coordination with Brussels and the Hungarian opposition to create supply disruptions in Hungary and push fuel prices higher before the elections,” Hungarian Foreign Minister Péter Szijjártó wrote on X. “We will not give in to this blackmail.” Hungary’s threat to veto the loan is a major setback for Ukraine, whose coffers will begin running low on cash from April. Kyiv will struggle to sustain its war effort without fresh funds, leaving it at a disadvantage in ongoing peace talks with Russia. The first signs of trouble began earlier in the day on Friday. Hungary’s ambassador to the EU demanded that its national assembly get the standard eight weeks to scrutinize EU legislation during a meeting of envoys in Brussels, three EU diplomats told POLITICO. EU ambassadors were set to give their final approval for the loan ahead of Tuesday, which marks the four-year anniversary of Russia’s invasion of Ukraine. In a fresh confrontation with Kyiv, Orbán is accusing the war-torn country of halting Russian gas to Hungary for political reasons. Ukraine rejects these claims, arguing that Russian strikes have damaged the energy infrastructure. The European Commission convened an emergency meeting earlier this week to solve the dispute over the Druzhba pipeline after Hungary and Slovakia retaliated by halting diesel supplies to Ukraine. EU leaders, including Orbán, agreed to the €90 billion loan in December following months of fraught negotiations. In a major concession, the EU exempted Hungary, Slovakia and Czechia ― who oppose giving further aid to Kyiv ― from repaying the borrowing costs of the loan. Budapest on Friday refused to clear one bill that requires unanimity to expand the cash buffer, known as the headroom, of the EU’s long-term budget to issue the loan. EU ambassadors backed the other two bills underpinning the Ukraine loan that only needed a simple majority for approval. As Russia’s firmest ally in the EU, Orbán has frequently threatened to block the EU’s financial support to Ukraine. UPDATED: This story has been updated to reflect Hungarian Foreign Minister Péter Szijjártó’s comments online.

ATHENS — Yannis Stournaras was campaigning for eurobonds long before it was trendy. But now the Bank of Greece Governor is setting his sights on his toughest audience yet: The German government. In an interview with POLITICO, Stournaras said the arguments are on his side. Back-to-back crises have left heavy debt burdens on the shoulders of EU governments, limiting the power of the public purse to tackle challenges posed by U.S. trade tariffs, Russia’s war in Ukraine and Chinese threats to limit exports of critical raw materials Without common bonds to fund defense, the green transition and strategic investments, the EU’s economy will fail to compete on the global stage. What’s more, Stournaras has the German and Dutch central banks on his side after the European Central Bank ended a 15-year internal feud over the need for “a common European, highly liquid, euro-wide benchmark safe asset” — in short, eurobonds. The ECB’s Governing Council of central bankers issued their rallying call to EU leaders during an informal summit earlier this month. It’s time governments got on board too, according to Stournaras. “The present international environment has been a wake-up call to European policymakers,” the 69-year-old said. “The resulting political momentum is certainly promising.” His optimism contrasts with continued opposition from German Chancellor Friedrich Merz, who rejected the idea outright at an EU summit last week. “I do worry,” Stournaras said about continued pushback from Berlin. “But I’d like to convince them.” Stournaras, who served as Greek finance minister from 2012 to 2014 before moving to the central bank, certainly has a lot of practice in such advocacy. He had long found himself isolated, along with his Italian colleague, on the Governing Council. During the height of the sovereign debt crisis, their position was often ascribed to national interest, as their countries stood to benefit disproportionately from shared borrowing. “Some years ago, we were one, maximum two Governing Council members arguing in favor of eurobonds,” Stournaras recalled. “The rest of us thought, ‘You are coming from the European South, so it’s understandable.’ But now we have all realized how important it is.” Now, even Germany’s Bundesbank, the de facto leader of the skeptics, has turned. As Stournaras sees it, the fact that southern EU countries that were teetering on the brink of bankruptcy a decade ago are now performing well has helped to shift views. Certainly, the subsidy from Berlin to other capitals that is implicit in joint borrowing has shrunk sharply. The infamous “spreads,” which represent how much more Greece and Italy had to pay than Germany to borrow for 10 years, now stand at less than 1 percentage point. INVESTOR APPETITE The most powerful argument, however, is a clear message from investors that all of Europe will benefit from joint debt, Stournaras argued. “If you talk to any important wealth manager, either in Europe or in the United States, and ask her why most of the current account surplus we have in Europe is flowing abroad, she will tell you that the lack of sufficient safe assets is the critical issue,” he said. “It is even more important than the rate of return.” Joint issuance should serve “well-defined common European purposes,” Stournaras said. “You have three common needs in Europe that can be funded commonly. Defense, green transition, innovation.” Advocates of joint borrowing argue that a more liquid market for safe euro assets will enhance the region’s relative attractiveness for global capital, at a time when the reliability and desirability of dollar assets are coming under increasing scrutiny. Competing with the dollar for global reserve currency status could ultimately — if only gradually — lower the cost of borrowing and investing for governments, companies and households. The Greek declined to say how much new debt, exactly, would be needed to make a real change to financial conditions in Europe, but said there needs to be meaningful amounts of both short- and long-term issuance. Short-term debt serves largely as a place for investors to ‘park’ money temporarily, while long-term debt typically provides a benchmark price for private-sector projects with long pay-off periods, such as infrastructure. MORAL HAZARD Stournaras stressed that eurobonds “cannot become a substitute for sound national fiscal frameworks.” But he argued that new rules or oversight bodies are also unnecessary. The central banker pointed to past experience — specifically the €800 billion post-pandemic recovery fund — as a successful precedent. “Crucially, [recovery fund] financing was linked to clearly-defined European objectives, time-bound commitments and reform conditionality. This architecture helped alleviate moral hazard, while enhancing credibility in markets,” he said. Critics would argue that moral hazard wasn’t completely removed. Under Prime Minister Giuseppe Conte, Italy, in particular, helped to finance its budget-busting “Superbonus” tax credit with NGEU money, forcing Conte’s successor Giorgia Meloni into drastic corrective action in recent years. The debate over Europe’s financial architecture is proving more exciting this year than the near-term monetary policy outlook. Stournaras said that “the euro area economy remains in a good place” with inflation projected to converge to the ECB’s 2 percent target over the medium term and the economic activity proving resilient. He acknowledged that the risks to growth and inflation appeared broadly two-sided. But on balance, he said, there’s a “slightly higher” chance of the ECB’s next move being down rather than up.  In any case, he said, there is no reason to hold one’s breath: “Unless the sky falls on our head, don’t expect sexy news from Frankfurt this year.” 

It might be premature for succession talks over the European Central Bank presidency, considering incumbent Christine Lagarde still has 18 months left in her eight-year reign. But speculation is rife after recent reports suggested the Frenchwoman could step down ahead of her planned exit date of Oct. 31, 2027, fast-tracking the debate over who will secure the most powerful economic post in Europe. Lagarde’s job is among three high-ranking vacancies that will emerge on the ECB’s six-person executive board next year. Eurozone leaders will have the final say on who gets a seat at the table, as part of a horse-trading exercise that considers who occupies the most influential positions in the EU — and what passports they hold. As Brussels girds itself for the usual undignified and thoroughly untransparent horse-trading, here’s your essential and speculative guide to understanding the looming ECB race. WHO’S THE FAVORITE TO SUCCEED LAGARDE? Klaas Knot, the two-term governor of the Dutch central bank and former head of the Financial Stability Board, has all the experience and qualifications needed for the job. A noted belt-tightening fiscal hawk in his first term, Knot softened his stance as the sovereign debt crisis was mastered, seemingly with one eye on the succession in Frankfurt. Some of the ECB’s current top brass see him as a little too close to politicians, but that may not count against him given it’s heads of government who make the appointment. On the minus side, Knot is currently out of the policy circuit, leaving him with no official machinery to help him campaign. That will count against him the longer the situation lasts, so anything that sounds like a starting pistol will be music to his ears. WHO’S THE INSIDER FAVORITE? Pablo Hernández de Cos, the former Bank of Spain governor, now running the Bank for International Settlements, is another highly qualified candidate. De Cos restored the Bank of Spain’s reputation after years of muddled and politically compromised leadership. However, building that reputation involved criticizing Prime Minister Pedro Sánchez’s government for its timid pension reform, which may cost him political support in Madrid. Also, moving De Cos from the standard-setting body in Basel might cost Europe a prestigious and influential seat in global finance, given the antagonism of the current U.S. administration toward Europe’s elite. Madrid has also long stated its desire to advance someone for the ECB presidency. WHERE’S GERMANY IN ALL THIS? There’s a strong sense — at least in Berlin — that it’s Germany’s turn to have an ECB president after watching two French presidents and one Italian play fast and loose with the formidable legacy of the Bundesbank and the Deutsche Mark over the last 20 years. Three candidates could put themselves forward for the job. Klaas Knot, the two-term governor of the Dutch central bank and former head of the Financial Stability Board, has all the experience and qualifications needed for the job. | Mateo Lanzuela/Europa Press via Getty Images Isabel Schnabel: The ECB’s current head of markets is keen on the position and has recently developed a conspicuous penchant for upbeat, big-picture takes on Europe’s future, which may or may not be aimed at reassuring Southern Europe that she is more than just a typical German hawk. However, precedent is against giving anyone a second term on the board and ECB insiders suggest she can be a somewhat divisive personality. Joachim Nagel: The current Bundesbank president is a more emollient figure, but has clashed more than once with Chancellor Friedrich Merz, most recently on the thorny issue of allowing the EU to issue more joint debt. A member of the Social Democratic Party, Merz’s junior partner in Berlin, Nagel may also be more useful to Merz in keeping the SPD onside in the debate over domestic policy than he would be across town at ECB headquarters. Jörg Kukies: Having been finance minister under Chancellor Olaf Scholz, Kukies has all the political connections he might need to secure the job. Although an SPD member like Nagel, Kukies’ politics are highly pragmatic and are unlikely to prevent Merz from supporting him. Isabel Schnabel, the ECB’s current head of markets is keen on the position and has recently developed a conspicuous penchant for upbeat, big-picture takes on Europe’s future. And, like ex-ECB President Mario Draghi before him, financial markets will like the fact that he also spent years at Goldman Sachs WHO’S THE FALL-BACK OPTION? International Monetary Fund Managing Director Kristalina Georgieva has a decent resume but lacks the direct political patronage at the head-of-government level that would normally be needed to land the role. However, at least her native country, Bulgaria, is now actually part of the eurozone, and no one should rule out the possibility of someone thinking of her after 16 hours of rancorous haggling in Brussels.

FRANKFURT — The head of Germany’s central bank has called for the EU to issue more joint debt, putting him at odds with Chancellor Friedrich Merz who wants to keep it strictly as a response to emergencies. “To make Europe attractive also means to attract investors from outside,” the German central bank governor, Joachim Nagel, told POLITICO ahead of an informal summit of EU leaders on Thursday to address the bloc’s economic challenges. “A more liquid European market when it comes to safe European assets would support that.” Eurozone central bankers — who have for the first time coalesced around support for joint debt — have sent EU leaders a wish-list of reforms to ensure that Europe’s economy can reform and keep pace with the U.S. and China. The European Central Bank’s policymakers, Nagel said in an interview on Friday, see “the benefits of creating a common European, highly liquid, euro-wide benchmark safe asset. Action is necessary.” But Nagel’s break from Germany’s traditional opposition to joint debt comes at an awkward time for Berlin. Earlier this week, the German government rebuked a rallying call from French President Emmanuel Macron to issue more eurobonds to boost certain sectors, such as artificial intelligence, European defense, semiconductors and robotics. The EU could also exploit U.S. President Donald Trump’s erratic foreign policy goals and lure global investors across the Atlantic. “The global market … is more and more afraid of the American greenback. It’s looking for alternatives. Let’s offer it European debt,” Macron told a group of reporters on Monday. Joint debt, known by the market shorthand of “eurobonds,” has long been a divisive topic. Since the sovereign debt crisis, southern European governments have pushed for eurobonds to spread the burden of national debt more evenly across the region. Frugal northern states, by contrast, have warned they risk undermining fiscal discipline — and have refused to put their taxpayers on the hook for debts racked up elsewhere. The Bundesbank has long been the de facto leader of the skeptics in northern and central Europe who believe eurobonds are best suited to isolated crises that require drastic action. These include an €800 billion post-pandemic recovery plan and a €90 billion loan to Ukraine to finance its defense against Russia. The last thing the so-called frugal bloc wants is for the EU to get into the habit of raising common debt to solve all of its issues. But times are fast changing. “Tradition is something that is a reflection of the reality of the past,” Nagel said when asked about the Bundesbank’s shift, stressing that Europe’s security has not been as threatened as today since World War II. “Now we have a different reality.” EUROBONDS, WITH LIMITS Support for joint debt does not mean the Bundesbank is dropping its commitment to ensuring sound fiscal policies. A European asset would only support “specific purposes,” and “how it is controlled by the European authorities and the Member States should be equally clear,” the 59-year-old said. Eurobonds must also be accompanied by debt reduction at the national level. “European debt is not a free lunch. And doubts about fiscal sustainability should not jeopardize the chances for improved common policies,” he said. Nagel stopped short of saying how much EU debt is needed to achieve real change. “I won’t give you a number,” he said, but added that “if you want to create something liquid, you have to give the markets an indication about the volume that you will supply over a certain period of time and for a certain purpose.” The central banker would not be drawn into whether Berlin might also adjust its views to reflect the new reality. “I see my role as giving advice on what could be a way out of a complicated situation that we are confronted with in Germany and in Europe,” he said. AUTONOMY, NOT SUPREMACY But a more efficient euro capital market is only one front in the battle to secure Europe’s economic independence and autonomy, Nagel said, adding that it will be equally important to ensure that the continent’s payment system can function independently from outside pressure. “Payment solutions, in an extreme scenario, could be weaponized,” he said.  Accordingly, he argued, the bloc needs to break the duopoly that U.S. credit card giants Mastercard and Visa hold over Europe’s payment rails across its borders. The key to payment security, he went on, is to mint a virtual extension of euro banknotes and coins that can settle transactions across the EU in seconds. The twin projects of the digital euro and perfecting the euro capital market may help boost Europe’s strength and autonomy, but still don’t amount to a masterplan to steal the dollar’s crown. And Nagel added that last week’s hint by the ECB about expanding its liquidity lines to central banks around the world, securing companies’ access to euros in times of stress, should not be seen as motivated by a political desire to boost the euro. “It is about monetary policy,” he said. Since last summer, Lagarde has urged Europe to seize a “global euro moment” as cracks began to appear in U.S. dollar dominance. While Nagel believes that “the euro could play here a significant role” as investors rebalance their portfolios to adjust to the new reality, he is not a fan of quick shifts. “I’m not in favor of fast tracking, jumping from one level to the next,” he said. “Often, such a development is not a very healthy one. I’m comfortable with gradual progress on the international role of the euro, as long as it’s moving in the right direction.”

BRUSSELS — Ukraine’s war chest stands to get a vital cash injection after EU envoys agreed on a €90 billion loan to finance Kyiv’s defense against Russia, the Cypriot Council presidency said on Wednesday. “The new financing will help ensure the country’s fierce resilience in the face of Russian aggression,” Cypriot Finance Minister Makis Keravnos said in a statement. Without the loan Ukraine had risked running out of cash by April, which would have been catastrophic for its war effort and could have crippled its negotiating efforts during ongoing American-backed peace talks with Russia. EU lawmakers still have some hurdles to clear, such as agreeing on the conditions Ukraine must satisfy to get a payout, before Brussels can raise money on the global debt market to finance the loan — which is backed by the EU’s seven-year budget. A big point of dispute among EU countries was how Ukraine will be able to spend the money, and who will benefit. One-third of the money will go for normal budgetary needs and the rest for defense. France led efforts to get Ukraine to spend as much of that as possible with EU defense companies, mindful that the bloc’s taxpayers are footing the €3 billion annual bill to cover interest payments on the loan. However, Germany, the Netherlands and the Scandinavian nations pushed to give Ukraine as much flexibility as possible. The draft deal, seen by POLITICO, will allow Ukraine to buy key weapons from third countries — including the U.S. and the U.K. — either when no equivalent product is available in the EU or when there is an urgent need, while also strengthening the oversight of EU states over such derogations. The list of weapons Kyiv will be able to buy outside the bloc includes air and missile defense systems, fighter aircraft ammunition and deep-strike capabilities. If the U.K. or other third countries like South Korea, which have signed security deals with the EU and have helped Ukraine, want to take part in procurement deals beyond that, they will have to contribute financially to help cover interest payments on the loan. The European Parliament must now examine the changes the Council has made to the legal text. | Philipp von Ditfurth/picture alliance via Getty Images The text also mentions that the contribution of non-EU countries — to be agreed in upcoming negotiations with the European Commission — should be proportional to how much their defense firms could gain from taking part in the scheme. Canada, which already has a deal to take part in the EU’s separate €150 billion SAFE loans-for-weapons scheme, will not have to pay extra to take part in the Ukraine program, but would have detail the products that could be procured by Kyiv. NEXT STEPS Now that ambassadors have reached a deal, the European Parliament must examine the changes the Council has made to the legal text before approving the measure. If all goes well, Kyiv will get €45 billion from the EU this year in tranches. The remaining cash will arrive in 2027. Ukraine will only repay the money if Moscow ends its full-scale invasion and pays war reparations. If Russia refuses, the EU will consider raiding the Kremlin’s frozen assets lying in financial institutions across the bloc. While the loan will keep Ukrainian forces in the fight, the amount won’t cover Kyiv’s total financing needs — even with another round of loans, worth $8 billion, expected from the International Monetary Fund. By the IMF’s own estimates, Kyiv will need at least €135 billion to sustain its military and budgetary needs this year and next. Meanwhile, U.S. and EU officials are working on a plan to rebuild Ukraine that aims to attract $800 billion in public and private funds over 10 years. For that to happen, the eastern front must first fall silent — a remote likelihood at this point. Veronika Melkozerova contributed reporting from Kyiv.