European Union leaders on Thursday committed to meeting Ukraine’s economic and military needs for 2026 and 2027 but stopped short of approving a controversial plan to use frozen Russian assets as collateral for a massive loan, deferring the decision until December amid Belgian resistance.
EU Council President Antonio Costa welcomed Ukrainian President Volodymyr Zelenskyy to the Brussels summit, announcing a political commitment to ensure Kyiv’s financial needs are covered for the next two years. However, Belgium, which holds the bulk of frozen Russian assets through the securities depository Euroclear, refused to approve the €140 billion (approximately $163 billion) reparations loan without additional assurances.
Belgian Prime Minister Bart De Wever laid out three specific demands before the summit: all EU members must share the legal and financial risks associated with the plan, including costs of any Russian legal action and potential repayment obligations; there must be transparency on the legal basis for the decision; and Russian frozen assets held by other countries should be included in the scheme.
“There must be transparency about the risk,” De Wever said, warning he would do everything in his power, politically and legally, to stop the decision if his demands were not met. He noted the unprecedented nature of the move, saying such action was not taken even during World War II.
Commission tasked with developing proposals
The leaders formally tasked the European Commission with developing detailed proposals for meeting Ukraine’s pressing needs, with options to be considered at their December summit. European Commission President Ursula von der Leyen clarified the distinction between confiscating assets and using cash balances, stating that Ukraine would repay the loan if Russia pays reparations, while Russian assets would remain frozen if Moscow refuses.
The plan would leverage approximately €210 billion in Russian central bank assets frozen in the EU, with about €185 billion held specifically in Euroclear in Brussels. Under the proposed structure, the frozen assets would serve as collateral for the loan, which officials believe would fund Kyiv’s defensive war effort for at least two years, easing the financial burden on member states to contribute more from their budgets.
Belgium is seeking a binding commitment that costs from any Russian legal challenge, even years down the line, would be covered by the EU as a whole rather than the Belgian state alone. There would also likely be a need to reform how the bloc’s sanctions on Russia are regularly renewed, preventing any single capital from using a veto to block their rollover.
Internal debate over loan conditions
Even before a formal proposal materialized, EU countries began wrangling over conditions to impose on the reparations loan. Some members want funds exclusively for Ukraine’s military, with the bulk spent on European weapons. Others argue Kyiv should have autonomy to use some of the loan for general budget support or to purchase arms from outside Europe.
Zelenskyy expressed hope the EU would make a positive decision to help Ukraine financially, emphasizing that Russia brought war to Ukrainian land and must pay for it. He also told EU leaders that Ukraine should be able to use Russian frozen assets for domestic weapons production.
A senior Ukrainian official emphasized that Kyiv needs the funds by year end and requires autonomy over how to spend them. Ukraine’s budget and military needs for 2026 and 2027 are estimated to total around $153 billion, according to EU calculations.
Sanctions package approved as pressure mounts
Zelenskyy received a boost as the EU formally approved its 19th sanctions package against Russia on Thursday. The package includes a ban on Russian liquefied natural gas (LNG) imports beginning January 2027, new measures targeting Russia’s shadow tanker fleet, and sanctions on Russian banks, cryptocurrency exchanges, and entities in India and China.
Danish Foreign Minister Lars Løkke Rasmussen, representing the rotating EU presidency, described the LNG ban as an important step toward completely phasing out Russian energy in the EU. Slovakia, which continues importing Russian energy, had been the final obstacle to the deal before lifting its reservation after new clauses addressed Slovak concerns about high energy prices.
The sanctions development followed Wednesday’s announcement by US President Donald Trump’s administration of new sanctions against Russia’s oil industry, including targeting major companies Rosneft and Lukoil, aimed at moving Russian President Vladimir Putin to the negotiating table.
International context and Russian response
About $300 billion in Russian assets are frozen globally, with approximately 70 percent held in the EU. Outside the bloc, Group of Seven nations also hold frozen Russian assets: Japan has around $50 billion, the United States holds $8 to 9 billion, and the United Kingdom and Canada have lesser amounts.
Interest earned on frozen assets is already being used to fund a G7 loan program for Ukraine, which would not be impacted if the EU plan proceeds. A World Bank study earlier this year estimated Ukraine’s reconstruction would cost $524 billion over the next decade, about 2.8 times its gross domestic product.
Russia has denounced the proposed reparations loan. Kremlin spokesman Dmitry Peskov described the EU’s intentions as plans to illegally confiscate Russian property, calling it theft. Russian Foreign Ministry spokeswoman Maria Zakharova warned the move was completely self destructive given Europe’s lack of gas reserves and growing energy consumption from artificial intelligence.
Peskov also claimed such actions would erode confidence in Europe’s financial institutions, warning the boomerang would seriously hit those who are main depositories and countries interested in investment attractiveness.
Swedish Prime Minister Ulf Kristersson said he saw broad support for the measure, while Finnish Prime Minister Petteri Orpo expressed hope the European Commission would produce a concrete proposal soon so assets would be available next year. An EU diplomat noted it was difficult to see all issues being ironed out before year end, or possibly at all, cautioning the plan should not be seen as a magical solution.
The summit’s outcome demonstrates the EU’s political commitment to sustaining Ukraine while acknowledging the complex legal, financial, and diplomatic challenges of implementing an unprecedented use of frozen sovereign assets.
