EU to Indefinitely Freeze Russian Assets to Fund Ukraine Loan
EU to Indefinitely Freeze Russian Assets to Fund Ukraine Loan
EU moves to immobilize Russia's central-bank assets to back a multi-year Ukraine loan, bypassing veto risks and aiming for stability.
The European Union is edging toward an indefinite freeze of Russian central bank assets held in Europe, a move that would lock away about €210 billion and clear the path to using the funds to back a Ukraine loan of up to €165 billion for 2026 and 2027. The plan would replace the current six-month rollover system with a long-term immobilization, reducing the risk that a member state like Hungary or Slovakia could block the rollover and force the money back to Russia. This shift would require a qualified majority and is aimed at preventing major disruption to the EU economy while supporting Kyiv’s budget needs in the coming years.
The freeze would stay in place “until there is no longer an immediate threat to the economic interests of the Union.” Belgium’s support is sought to enable using the frozen assets for the Ukraine loan, which Kyiv would repay only when Russia pays war damages, effectively turning the loan into a grant that unlocks future reparations payments.
Hungary has voiced opposition, with Prime Minister Orban signaling resistance to what he calls an unlawful state of affairs. Russia’s central bank has rejected the plan as illegal and warned it will use all available means to protect its interests, including legal action. Indeed, Russia has pursued a lawsuit against Belgium’s Euroclear in relation to the EU bid to mobilize Moscow’s assets for Kyiv’s aid.
This development marks a strategic pivot in the EU’s sanctions and support framework for Ukraine, combining asset immobilization with a large-scale, long-term loan mechanism intended to bolster Ukraine’s military and civilian budgeting needs while seeking to minimize economic disruption inside the Union.
Cover image source: Russia Sues Holder of Frozen Assets Europe Wants for Ukraine Loan 🔗
