The European Union has agreed to indefinitely freeze Russian central bank assets held in Europe, removing a major political and legal hurdle to using the funds to support Ukraine’s defense against Russia, according to Reuters. The decision reflects the bloc’s determination to keep Ukraine financially afloat as it views Moscow’s invasion as a direct threat to European security.
Reuters reported that EU governments agreed on Friday to immobilise 210 billion euros worth of Russian sovereign assets for as long as necessary, ending the previous requirement to renew the freeze every six months. The change eliminates the risk that countries such as Hungary or Slovakia, which maintain relatively warmer ties with Moscow, could block an extension in the future and force the assets to be returned to Russia.
The indefinite freeze is a key step toward enabling the EU to use the frozen assets to back a proposed loan of up to 165 billion euros to Ukraine, intended to cover both military and civilian budget needs in 2026 and 2027. Under the plan described by Reuters, Ukraine would repay the loan only once Russia pays war damages, effectively turning the loan into an advance on future reparations.
EU leaders are set to meet on December 18 to finalise the structure of the loan and resolve outstanding issues, including demands from Belgium for guarantees that it would not be left financially exposed if Russia succeeds in legal action over the frozen funds. Belgium hosts Euroclear, the Brussels-based clearing house that holds the bulk of the immobilised Russian assets.
Ahead of the summit, Ukrainian President Volodymyr Zelenskiy is due to travel to Berlin for talks with German Chancellor Friedrich Merz, with other European, EU and NATO leaders expected to join, according to the German government. Ukrainian Prime Minister Yulia Svyrydenko welcomed the EU decision in a post on X, calling it a landmark step toward justice and accountability and saying it strengthened the foundations of the reparations loan mechanism.
Reuters cited European diplomatic sources as saying Germany sees no viable alternative to the loan plan and would be willing to provide 50 billion euros in guarantees. Denmark, which currently holds the rotating EU presidency, said some concerns still needed to be addressed but expressed hope that leaders could reach agreement at next week’s European Council meeting. European Economy Commissioner Valdis Dombrovskis said robust guarantees were being assembled to reassure Belgium.
The move has drawn sharp criticism from Hungary. Prime Minister Viktor Orban said on Facebook that freezing Russian assets indefinitely through a qualified majority vote would cause irreparable damage to the EU, adding that Hungary would do everything it could to restore what it called a lawful situation.
Russia’s central bank said the EU’s plans were illegal and that it reserved the right to use all available means to protect its interests, comments dismissed by Dombrovskis. The bank also said it was suing Euroclear in a Moscow court, arguing that the freeze had damaged its ability to manage its funds and securities. Reuters noted that Euroclear has faced multiple lawsuits in Russian courts since the assets were frozen in 2022.
Separately, Reuters referenced a Financial Times report suggesting Ukraine could join the EU by January 1, 2027 under proposals discussed in U.S.-mediated talks on ending the war. European diplomats cautioned that such a timeline would be extraordinarily difficult to achieve, with several officials describing it as unrealistic and unclear whether it has the backing of EU leadership.
