Economy

EU Leaders Pledge Aid to Ukraine, But Can They Unlock Frozen Russian Assets?

EU leaders will fund Ukraine through 2027. Frozen Russian assets for loans are still debated due to Belgian concerns.

byAndres Castro

October 23, 2025, 6:16 PM

Ukrainian President Zelenskiy speaks alongside EU and Canadian leaders in Kyiv.

President Zelenskiy with world leaders in Kyiv, Ukraine, 24-02-2024. By paparazzza / Shutterstock.com.

Executive Summary

EU leaders committed to addressing Ukraine’s financial requirements for 2026-2027, including military and defense expenditures.

The leaders, with the exception of Hungary, refrained from explicitly endorsing a proposal to use frozen Russian assets for a substantial loan to Kyiv.

Belgium raised concerns, influencing the decision to hold off on the frozen assets plan, demanding shared legal costs, financial contributions for repayment, and the inclusion of Russian assets held by other nations.

The Story So Far

The ongoing war in Ukraine necessitates substantial long-term financial support for Kyiv, including military and defense expenditures, prompting the EU to explore various funding mechanisms. A significant proposal involves using approximately 140 billion euros in frozen Russian assets for a “reparation loan,” but this plan faces considerable legal and financial complexities, primarily due to concerns raised by Belgium, which holds the majority of these assets and demands comprehensive risk-sharing among all EU member states.

Why This Matters

The EU has committed to Ukraine’s long-term financial and military needs for 2026-2027, but the immediate prospect of a substantial “reparation loan” funded by frozen Russian assets has been delayed. This setback is due to significant legal and financial risk concerns, particularly from Belgium, necessitating the European Commission to explore alternative financial support options and underscoring the complex, unresolved challenges surrounding the direct repurposing of these assets for Ukraine’s long-term recovery.

Who Thinks What?

The majority of EU leaders committed to addressing Ukraine’s financial requirements for 2026-2027 and agreed that Russia’s assets should remain immobilized until aggression ceases and compensation is provided, but they refrained from explicitly endorsing a proposal to use these frozen assets for a substantial loan.

Belgian Prime Minister Bart De Wever expressed concerns regarding the proposed reparation loan, demanding that all EU member states share potential legal costs and repayment burdens, and advocated for the inclusion of Russian frozen assets held by other nations with full transparency.

The European Commission proposed a “reparation loan” of approximately 140 billion euros to be funded by frozen Russian assets and is now tasked with promptly presenting options for Ukraine’s financial support.

EU leaders convened in Brussels on Thursday, October 23, and committed to addressing Ukraine’s financial requirements for 2026-2027, including military and defense expenditures. However, the leaders, with the exception of Hungary, refrained from explicitly endorsing a proposal to use frozen Russian assets to provide Kyiv with a substantial loan, following concerns raised by Belgium.

Ukraine’s Financial Needs and Russian Assets

The agreed text from the summit requests the European Commission to promptly present options for financial support, based on an assessment of Ukraine’s financing needs. It also states that, subject to EU law, Russia’s assets should remain immobilized until the country ceases its aggression against Ukraine and provides compensation for damages incurred.

Despite this, the leaders did not explicitly back the Commission’s proposal for a “reparation loan” of approximately 140 billion euros ($163 billion), which would be funded by these frozen assets. An earlier draft of the conclusions, which called for concrete proposals on the gradual use of cash balances from immobilised Russian assets, was removed from the final text.

Belgian Concerns Over Reparation Loan

The decision to hold off on the frozen assets plan was influenced by Belgian Prime Minister Bart De Wever. Belgium is the custodian of significant frozen Russian assets through the securities depository Euroclear. De Wever outlined three conditions for his country’s support, aiming to mitigate the risks Belgium would face.

De Wever demanded that all EU member states share the costs of any potential legal actions initiated by Russia. He also insisted on financial contributions from all members if the funds were ever required to be repaid. Furthermore, he advocated for the inclusion of Russian frozen assets held by other nations in any such scheme, emphasising the need for transparency regarding both risk and the legal basis for the decision.

Looking Ahead

The European Council’s commitment to Ukraine’s long-term financial stability remains firm, though the path to utilizing frozen Russian assets for a large-scale reparation loan is still under discussion. The Commission is now tasked with exploring various financial support options, while member states address the legal and financial complexities surrounding the use of Russian assets.