European Union leaders are exploring ways to lend tens of billions of euros to Ukraine using frozen Russian assets, as support from Washington diminishes and Kyiv faces potential funding shortages early next year. The plan seeks to tap roughly 210 billion euros ($245 billion) of Russian assets held in Europe, mostly in cash, though the proposal faces legal and political hurdles, particularly from Belgium, where much of the money is stored.
The European Commission has proposed a “reparations” loan, where cash held in Euroclear, Europe’s securities depository, would be borrowed by the EU and lent to Ukraine. Kyiv would repay the loans only after receiving compensation from Russia for the damage caused by its invasion. The strategy would also draw in other financial institutions holding frozen Russian property, including in France and Germany, with around 90 billion euros planned for distribution over the next two years.
While the EU sees the measure as a critical step to meet Ukraine’s projected funding needs of 135 billion euros in 2026 and 2027, objections from member states threaten its implementation. Belgium, citing fears of being left liable if Russia challenges the move, continues to resist. EU officials are reportedly exploring legal and financial mechanisms to mitigate such risks, including guarantees to shield Belgium from potential lawsuits.
Russia has warned that seizing its frozen assets could be interpreted as an act of war. Deputy Chairman of Russia’s Security Council Dmitry Medvedev called the proposal tantamount to theft, while recent drone sightings over Belgian airports and military sites have heightened concerns of potential retaliation. Despite these risks, the European Commission maintains that approval by 15 of the 27 EU countries, representing at least 65% of the bloc’s population, would allow the plan to move forward.
The debate underscores Europe’s struggle to support Ukraine as Washington’s direct financial assistance wanes and highlights the broader challenge of balancing legal, political, and security considerations while attempting to hold Russia financially accountable.
