EU leaders convened in Brussels to advance a bold proposal to fund a €140 billion ($163 billion) "reparations loan" for Ukraine, utilizing approximately €200 billion in Russian Central Bank assets frozen since Moscow’s 2022 invasion. Held primarily at Belgium’s Euroclear, these assets have already generated interest to back a $50 billion G7 loan. With U.S. support waning and Russia’s war entering its fourth year, the EU seeks to bolster Ukraine’s budget and defense capabilities through this innovative financial mechanism.

The European Commission’s plan avoids outright seizure of Russian assets—a move opposed by several member states—by borrowing matured cash from Euroclear, which would then be loaned to Ukraine. Repayment would hinge on Russia compensating for war damages, with the EU’s 27 nations guaranteeing the funds if Moscow reclaims the assets without reparations. This approach aims to hold Russia accountable while addressing Kyiv’s urgent financial needs for 2026 and 2027.

Belgium, wary of legal challenges from Russia, has emerged as a key skeptic. Prime Minister Bart De Wever demands unanimous EU liability-sharing and commitments to tap Russian assets frozen elsewhere in the bloc. “If not, I will do everything in my power to stop this decision,” he declared. Despite these concerns, European Council President António Costa signaled confidence in securing political approval, with a formal legal proposal expected by November 2025 and finalization targeted by year-end.

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Tensions persist over how Ukraine can spend the funds. France pushes for prioritizing European defense purchases to strengthen the EU’s arms industry, while others advocate for flexibility to source weapons globally, including from the U.S., to align with Kyiv’s immediate needs and maintain transatlantic support. As legal teams scrutinize the plan, its success will depend on balancing these priorities with the complex legalities of repurposing frozen assets.

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