WSJ What’s News - EU Backs $105 Billion Ukraine Loan

Episode Date: December 19, 2025

A.M. Edition for Dec. 19. Europe throws Kyiv a fiscal lifeline in a move officials say could give Kyiv more leverage in negotiations over ending the war, but fail to agree on a plan to tap frozen Russian assets. Plus, OpenAI aims to raise as much as $100 billion to pay for its ambitious growth plans in a market that has started to cool on the artificial-intelligence boom. And WSJ Tokyo bureau chief Jason Douglas explains how interest-rate rises in Japan could push up borrowing costs in the U.S. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Europe overcomes some, but not all, divisions in its bid to support Ukraine's war effort, plus a test for open AI as it plans to tap investors for up to $100 billion to fund its growth plans. And attention, American wine buyers, tariffs are about to jack up the price of your favorite old world bottles. So for the holidays, if you're picking up champagne or kava, just enjoy the prices while you can. It's Friday, December 19th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. EU leaders have agreed to lend Ukraine around $105 billion to help it continue fighting Russia. It is a vital lifeline. By April, the EU had expected Ukraine to exhaust funds for its budget and weapons purchases. Now, according to IMF estimates, the loan will cover two-thirds of financing needs for

2026 and 27. Reaching agreement wasn't easy, though, with leaders notably failing to agree on tapping a massive pot of frozen Russian assets in order to fund Ukraine. Much of that money is held in Belgium, where Prime Minister Bark de Vavor expressed concern about ending up on the hook financially should the loan face successful legal challenge. Failing to tap Russian assets will shift costs to EU taxpayers and deny Europe further resources for future funding. But DeVeyver said failing to agree on any loan would have been worse. Had we left Brussels divided today, Europe would have walked away from geopolitical relevance. It would have been a total disaster. And we would have sent a message to the world that Europe can no longer deliver anything.

And that would also be a strategic disaster. The loan could give Ukraine more leverage in its negotiations with the U.S. as Washington tries to end the war. Without additional funding, European officials said Kiev might have had little choice but to accept U.S. demands, including withdrawing from eastern regions that its troops still hold. The man suspected of killing two Brown University students on Saturday and an MIT professor near Boston on Monday night has been found dead in New Hampshire. Authorities say 48-year-old Portuguese National and former Brown student Claudio Neves Valenti fatally shot himself inside a storage unit. Posting on X, Secretary of Homeland Security

Christine Nome said he entered the U.S. through the DV-1 Diversity Lottery Immigrant Visa Program in 2017 and said she'd ordered a pause in the program at President Trump's direction. In a closely watched case that had highlighted tensions around the Trump administration's deportation push, a Wisconsin state judge has been found guilty for her role in helping a defendant in her courtroom avoid immigration agents. Hannah Dugan was arrested and charged in April by federal authorities who alleged she directed Eduardo Flores Ruiz to leave her courtroom when she knew ICE agents were in the courthouse. Flores Ruiz was facing three domestic assault charges and was in the country illegally. Dugan now faces a maximum sentence of five years in

prison. Attorneys for Dugan didn't immediately return request for comment. Turning to business news, we are exclusively reporting that OpenAI aims to raise as much as $100 billion to pay for its ambitious growth plans in a market that started to cool on the artificial intelligence boom. The fundraising round is said to be in the early stages and could value the company at as much as $830 billion. CEO Sam Aldman has already scoured the world to build its investor pool, and as the journal previously reported, the company is also weighing a potential IPO. Well, elsewhere, the AI gold rush is showing no signs of letting up, as chipmaker Micron's blowout earnings this week proved. The company posted record revenue

and operating income for its fiscal first quarter late on Wednesday, and its revenue forecast topped analysts' expectations by a massive 30%. But as journal heard on the street tech columnist Dan Gallagher told our Tech News Briefing podcast that good news for investors could mean higher consumer electronics prices next year. The AI has created this demand for this very specialized type of memory that works within the AI systems. And so a lot of the production capacity is going towards this very high value memory. And what that does is that leaves less production capacity for the memory chips that go in your phone or in your PC. The short of it is you're probably going to see prices go up for a lot of these types of products. And you also might see products where there's just less memory in them because you're going to see manufacturers make some design tweaks because they can only get so much memory.

And so they might just push out more products and have less on more memory for that. Manufacturers are already paying higher prices and they're already seeing a hit to their profit margins on that. And there's only so much they can absorb. If you take a manufacturer like Dell, like HP, that make PCs, they can take some margin pressure, not a lot. they need to pass those costs on. Coming up, why Japan's interest rate hikes could eventually be felt in the U.S., and why now might be the best time

to grab a few extra bottles of your favorite European wine after the break. You and Santa? Best rappers out there. But Reese's wants to know, what about the best unwrapping moment? Reese's peanut buttercups,

put your unwrapping. wrapping skills to the test, and with three cups of creamy peanut butter and smooth chocolate per pack, you get your practice in. Experiencing that sweet and salty satisfaction again and again and again. Santa gets cookies. You get Rhesus. Nothing else is Rhesus. Let us head to Tokyo now, where the Bank of Japan today raised its benchmark interest rate

to three-fourths of 1%. That decision was expected, but as journal Tokyo Bureau Chief Jason Douglas is here to discuss, it makes the move no less consequential for Japan or perhaps for global markets. Jason, first off, let's just get to the Japanese context here. This is now the fourth rate hike we've seen in less than two years, but if you zoom out, this is still very new territory for the BOJ. That's right. So as you mentioned, the Bank of Japan rate, its policy rate to 0.75% today.

That doesn't sound like much, but that is actually the highest it has been in 30 years. So Japan has had very low rates for really a very long time, right? So they had a big asset price bubble, everything burst. And since 1990, it's been very low. The Japanese economy was, as everyone will remember, battling deflation for most of that time. But then, like lots of other economies since the pandemic, we started to see inflation in Japan. This has started to stick around, even though the economy is kind of weak. And so the Bank of Japan is now starting very slowly to lift interest rates after all this time.

As you mentioned, inflation, sticky, a novelty for households in Japan. So maybe this move keeps that inflation in check. And from a Japanese standpoint here, there are other potential virtuous behaviors this could unlock among investors. That's right. One thing people are expecting or people are hoping for is that slightly higher rates in Japan might tempt Japanese investors to bring some money back home. So Japanese pension funds insurers, ordinary mom and pop investors are, you know,

big investors in stock markets and bond markets around the world. Higher rates in Japan might tempt them to bring some of that money back home. So we did see this, for instance, in 2020. Two, there was quite a big repatriation of funds from overseas. That would help support the yen, which would help in the inflation front. And it might help perk up demand for Japanese government bonds, which the government is eager to sell to finance its fiscal plans. So yes, we'll be watching to see if this gradually tempts Japanese investors home.

And if it does, you know, good for Japan, potentially less so for places like the US where that money had been parked? There are lots of reasons why bond yields and interest rates are going up. investors are still anxious about inflation, investors are still anxious about government spending right across the world. But it is true that Japanese investors have been big players in bond markets, especially the US Treasury market, for really quite a long time, and have had some effect in keeping interest rates down in the US and in other places. And so if we do see Japanese investors start to repatriate more of their money, that is just one other reason why we might start to see

slightly higher interest rates, slightly higher borrowing costs in the US and around the world. It's worth bearing in mind none of this is going to happen quickly. I mean, this will be a process that will probably play out over a couple of years. As we mentioned earlier, the Bank of Japan is raising rates very slowly. But, you know, we spoke to analysts at HSBC, for instance, they were talking about how if rates got up to one or even two percent in Japan over the next few years, then we would really see a perceptible effect on global borrowing costs that we could attribute to Japanese investors' behavior.

Having said all that, the Japanese economy, it's not doing great. I think there's still a bit of anxiety about growth. There's a bit of anxiety about things like wages and so on. And so some economists also think that maybe we won't see too many more rate rises by the Bank of Japan. So we'll see how things go on the growth front. Journal Tokyo Bureau Chief Jason Douglas, appreciate you dropping by with an update. As always, thank you. My pleasure. Thank you, Luke.

And finally, if you're heading out for some last-minute holiday shopping this weekend, you may want to consider grabbing a few extra bottles of European wine for your seller. That's because with a coming 15% tariff on EU goods set to apply to wine produced this year and shipping in the coming months, Americans can soon expect to pay more. Add to that, the euro's rise against the U.S. dollar. And journal reporter Laura Cooper says now may be the time to buy or to start drinking less. People I've spoken to have said they expect between 15 and 30 percent increases. on wines that are coming from the EU because of the tariffs that were put in place by President

Trump and producers, distributors, retailers are trying to keep the cost increase as low as possible. But the reality of the situation is they have to incur these costs of 15 to 30%. So while the change in price could vary, it could be $2, it could be $5, it could be $10,15. It really depends on a lot of different factors. But it is very clear that European wine for U.S. consumers is expected to be more expensive. So for the holidays, if you're picking up champagne or kava, just enjoy the prices while you can. And that's it for what's news for this Friday morning. Today's show was produced by Hattie Moyer. Our supervising producer was Daniel Bach. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show.

Otherwise, have a great weekend. And thanks for listening. Thank you.