EU Leaders Weigh Using Frozen Russian Assets to Fund Ukraine

EU leaders convene in Brussels amid a tightly watched debate: should tens of billions of euros held as frozen Russian assets be loaned to Ukraine to fund its military and economic needs? Sources indicate discussions are centered on a possible €90bn package, though the final figure and structure remain unsettled as talks proceed. Officials say there is a legal basis for tapping the assets, but the political and financial risks are being weighed with caution by member states. The outcome hinges on a delicate balance between keeping Ukraine supplied and preserving financial stability across the eurozone.

German Chancellor Friedrich Merz has pressed for a decisive move, arguing that unlocking the assets would send Moscow a clear signal that the war cannot be sustained. His push comes as EU officials stress the need for a robust legal framework and a plan that is palatable to all members. At the same time, Belgium has urged thorough assessment, with its government wary of rushing into a decision that could invite legal challenges or political backlash. Belgium’s concerns are echoed by its defence ministers and other officials who warn of potential hiccups and legal complexities.

Hungary’s leadership, led by Prime Minister Viktor Orban, appears to be the loudest opponent, with opposition arguments focusing on sovereignty and the risks of entangling EU finances with wartime needs. Slovakia’s Robert Fico has also signaled strong reservations about using the assets if the money goes toward weaponry rather than reconstruction. The row underscores a broader tension within the bloc: how far to go in aiding Kyiv without provoking market volatility or undermining internal consensus.

As the clock ticks toward a pivotal vote, European Council President António Costa has promised to work closely with Belgium and avoid bypassing its government. He stressed that any decision would be taken by the 27 member states, requiring a majority of at least 15 states representing 65% of Europe’s population. That threshold keeps the process well inside a broader, consensus-driven framework, even as impatience grows among supporters who want swift action.

Financial nerves also loom. Fitch has placed Euroclear on a negative watch, citing “low” legal risks to its balance sheet but warning that the move could introduce new balance-sheet pressures amid the asset transfer. Euroclear’s leadership has warned about the obstacles ahead, underscoring that any plan would need to withstand scrutiny from several governments and financial authorities. Despite the hurdles, proponents insist the funds would support Ukraine’s defense and broader stability, while critics warn of precedent-setting risk and potential legal challenges. The coming days will reveal whether the bloc can bridge its differences and approve a framework that satisfies both the urgency of Kyiv’s needs and the prudence demanded by eurozone economies.

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