EU: European Union leaders are meeting in Brussels at a critical juncture of the Russia–Ukraine war, facing a decision that could redefine Europe’s role in the conflict and its long-term legal and financial framework. At the center of the debate is whether tens of billions of euros from frozen Russian assets should be loaned to Ukraine to support its military operations and stabilize its struggling economy. With Ukraine’s financial reserves expected to shrink dramatically in the coming months, the outcome of this summit carries enormous consequences for Kyiv, Moscow, and the European Union itself.

Background of the Frozen Russian Assets

Following Russia’s full-scale invasion of Ukraine in February 2022, Western nations imposed sweeping sanctions on Moscow. As part of these measures, around 210 billion euros in Russian central bank assets were frozen within the European Union. A large share of this money is held by Euroclear, a Belgium-based financial services company that plays a central role in clearing and settling international securities transactions.

Until now, the EU has limited itself to transferring the interest generated by these frozen assets to Ukraine, while leaving the principal untouched. The current proposal goes much further, suggesting that the assets themselves could be used as the foundation for large-scale loans to Kyiv.

Ukraine’s Urgent Financial Needs

Ukraine’s government is facing a severe funding gap as the war continues to drain public finances. Military expenditures remain extremely high, while economic activity has been severely disrupted by ongoing attacks on infrastructure and industry. European officials estimate that Ukraine will need roughly 137 billion euros to cover its needs through 2026 and 2027.

The European Commission has proposed loaning around 90 billion euros to Ukraine over the next two years, using the frozen Russian assets as collateral. Supporters argue that this approach would give Ukraine immediate access to funds without formally confiscating the assets, which they say helps reduce legal and political risks.

Diverging Views Within the European Union

Despite broad sympathy for Ukraine, the proposal has exposed deep divisions among EU member states. Belgium, whose financial system would be most directly affected due to Euroclear’s involvement, has expressed strong reservations. Belgian Prime Minister Bart De Wever has stated publicly that he has not yet seen a convincing legal framework that would justify changing his country’s position.

Hungary has emerged as one of the most vocal opponents of any additional EU financial support for Ukraine. Prime Minister Viktor Orban has repeatedly signaled that he will block unanimous decisions involving EU budget guarantees. Slovakia has also raised objections, particularly if the funds are used primarily for weapons procurement rather than reconstruction.

Other countries, including Italy, Malta, Bulgaria, and the Czech Republic, have indicated they need stronger legal assurances before endorsing the plan. Italian Prime Minister Giorgia Meloni has warned that a weak legal foundation could hand Russia a strategic victory.

Legal and Financial Risks at Stake

A major concern surrounding the proposal is the risk of legal challenges. Russia has already filed a lawsuit against Euroclear in a Moscow court, seeking the return of its frozen assets. European leaders worry that if courts eventually rule in Russia’s favor, Belgium or EU institutions could be forced to return the money, creating massive financial liabilities.

Credit rating agencies are also watching closely. Fitch has placed Euroclear on a negative watch, citing potential legal exposure related to the use of Russian assets. Euroclear’s own leadership has cautioned against any move that could destabilize the company’s balance sheet or undermine trust in Europe’s financial infrastructure.

Strategic Implications for the War

Supporters of the loan plan argue that providing Ukraine with a clear financial runway would strengthen its position both on the battlefield and at the negotiating table. Officials from countries like Finland have emphasized that secure funding would allow Ukraine to resist pressure for an unfavorable peace settlement and demonstrate that it is not on the brink of collapse.

European Commission President Ursula von der Leyen has framed the proposal as a way to increase the long-term cost of war for Russia. German Chancellor Friedrich Merz has echoed this view, saying that using the frozen assets would send a powerful signal to Moscow that continuing the conflict is futile.

International Context and Diplomatic Pressure

The Brussels summit is taking place against a backdrop of renewed diplomatic activity. The United States has suggested that talks aimed at ending the war are closer than ever, with American and Russian officials expected to meet for further discussions. However, the Kremlin has firmly rejected proposals involving a European-led multinational force in Ukraine backed by Washington.

Russian President Vladimir Putin has continued to use harsh rhetoric toward Europe, portraying the continent as weakened and opportunistic. Such statements have further hardened attitudes among some EU leaders who believe a firm response is necessary.

What Happens If the Deal Moves Forward

If approved, the loan plan would require the backing of roughly two-thirds of EU member states. Even then, European Council President António Costa has pledged not to override Belgium’s objections, emphasizing the need for unity and consensus.

In the worst-case scenario, Belgium could be ordered by a court to return the assets to Russia. To mitigate this risk, some countries have suggested providing financial guarantees to cover potential losses. EU officials remain confident that Russia would ultimately only recover the funds by paying reparations to Ukraine, at which point the loan could be repaid.

Conclusion

The decision facing EU leaders is not merely a financial one. It touches on international law, European unity, global financial stability, and the future of Ukraine itself. Whether the frozen Russian assets become a lifeline for Kyiv or remain locked away as a symbol of unresolved conflict will shape Europe’s credibility and influence for years to come.