European Union leaders are facing growing pressure to approve a plan that would allow billions of euros in frozen Russian assets to be used to support Ukraine’s defence and recovery, a move that could significantly reshape Europe’s financial and political response to the war.
At a crucial summit in Brussels, EU heads of state and government are debating whether to endorse a proposal that would unlock around €210 billion in Russian sovereign assets currently immobilised within the bloc. Most of these funds are held in European financial institutions, with a large portion managed in Belgium. Supporters argue the plan is essential as Ukraine struggles to meet its mounting military and civilian funding needs.
The initiative has been strongly backed by senior EU officials, who say Europe must take greater responsibility for its own security in an increasingly unstable global environment. They argue that using frozen Russian assets would demonstrate unity and resolve, while reducing the financial burden on European taxpayers.
At the centre of the proposal is a so-called reparations loan. Under this model, the EU would borrow against the frozen assets to provide Ukraine with up to €90 billion over the next two years. This funding could cover a significant share of Ukraine’s projected budget shortfall, helping to sustain defence operations, rebuild infrastructure, and support essential public services.
Crucially, the plan is designed so that Ukraine would only repay the loan if Russia eventually agrees to pay reparations for the damage caused by its invasion. Advocates say this approach ensures Moscow ultimately bears responsibility for the costs of the war, rather than Ukraine or its allies.
Despite strong political momentum, the proposal has sparked intense debate within the EU. Several member states have raised concerns about the legal and financial risks involved, warning that the move could set a controversial precedent in international finance.
Belgium has been among the most cautious voices. As the host country for many of the frozen assets, Belgian officials have warned that proceeding without watertight legal protections could expose the country to substantial financial liabilities, including potential lawsuits from Russia’s central bank.
Italy has also expressed reservations, emphasising that any decision must be firmly grounded in international law. Italian leaders have cautioned that a poorly constructed plan could undermine the rule of law and hand Russia a propaganda victory, even as they acknowledge the need to continue supporting Ukraine.
Germany has taken a more supportive stance, arguing that making frozen Russian assets available would send a powerful signal of European determination. German officials have said the challenge lies in reconciling legal caution with the urgent need to provide Ukraine with predictable, long-term funding.
Political divisions within the EU further complicate the issue. Hungary, which has often taken a more conciliatory approach toward Moscow, has signalled opposition to using the EU budget to fund Ukraine. This stance has pushed supporters of the plan to explore mechanisms that would not require unanimous approval.
Ukraine’s leadership has repeatedly urged European governments to move forward. President Volodymyr Zelensky has described the frozen assets as a vital resource that could help ensure Ukraine’s survival at a critical stage of the war. Ukrainian officials argue that decisive action would reinforce Europe’s credibility and commitment to defending international law.
The debate comes amid ongoing military pressure from Russia and uncertainty over long-term international support for Ukraine. With Kyiv facing rising defence costs and reconstruction needs, European leaders are under increasing pressure to provide sustainable solutions rather than short-term aid packages.
If approved, the plan would represent one of the most significant uses of frozen sovereign assets in modern history. Critics, however, warn it could unsettle global financial markets and weaken trust in the international system by blurring the line between asset freezes and confiscation.
Russia has strongly condemned the proposal, calling it unlawful and threatening legal retaliation. Moscow argues that any attempt to use its frozen assets amounts to theft and could provoke countermeasures, potentially escalating financial and diplomatic tensions.
Supporters within the EU counter that Russia’s invasion created extraordinary circumstances that justify extraordinary measures. They argue that failing to act would leave Ukraine vulnerable and undermine Europe’s long-term security.
As discussions continue, EU leaders face a delicate balancing act: maintaining legal integrity while responding to the urgent realities of war on Europe’s doorstep. The outcome of these negotiations could have lasting consequences for Ukraine, for the European Union, and for the future of international financial norms.
