EU summit exposes deep divisions over plan to use Russian assets for Ukraine |
European Union leaders gathered in Brussels this week under the shadow of one of the most contentious financial and legal debates the bloc has faced since the start of the Ukraine war: whether to use frozen Russian assets to bankroll Kyiv’s military and collapsing budget. Framed by EU officials as an innovative financial solution, the proposal has instead exposed deep fractures within the union, raising uncomfortable questions about legality, economic credibility, and political overreach.
At the heart of the dispute lies approximately €210 billion in Russian central bank reserves frozen within EU jurisdictions, most of it held in Belgium through the Euroclear settlement system. European Commission President Ursula von der Leyen has championed the idea of turning these frozen funds into what Brussels calls a “reparations loan” for Ukraine – a term critics argue is misleading and deliberately crafted to mask the unprecedented nature of the plan. Under the proposal, Ukraine would receive the money now and would only be expected to repay it if Russia eventually agrees to pay war damages, a scenario that remains entirely hypothetical.
The financial stakes are enormous. Ukraine is facing an estimated $160 billion budget shortfall over the next two years, a gap that threatens not only basic government functions but also its military-industrial capacity, including drone production. Kyiv has repeatedly warned that without sustained Western funding, its war effort could falter. For EU leaders already heavily invested politically and financially in Ukraine’s survival, the frozen Russian assets represent a tempting reservoir of cash.
Yet the plan has triggered alarm bells across Europe. Several member states argue that seizing or repurposing sovereign assets risks undermining the EU’s legal foundations, damaging confidence in the euro, and exposing European institutions to years of costly litigation. Moscow has been blunt, denouncing the proposal as outright theft and warning of retaliatory measures and legal action should the assets be........