The European Commission has proposed an unprecedented use of frozen Russian assets or international debt to raise 90 billion euros ($105bn) to support Ukraine’s war effort against Russia, although key stakeholders Belgium’s serious reservations about the plan appear unresolved.
An announcement by the European Union’s executive board on Wednesday proposed “two measures to meet Ukraine’s financing needs” for 2026 and 2027.
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The first option is an EU loan to Kyiv from the private market, while the second preferred option is a “reparation loan” financed using Russian state assets frozen in the EU in response to Moscow’s 2022 invasion of Ukraine.
“(These options) reflect the EU’s commitment to support Ukraine not only in the defense of its sovereignty and state functions, but also as a strategic investment in Europe’s security and the search for a just and lasting peace,” the commission said in a press release.
Commission president Ursula von der Leyen told reporters the proposal would ensure Ukraine had “the means to defend itself” and “advance peace negotiations from a position of strength”.
“We are proposing to cover two-thirds of Ukraine’s financing needs for the next two years. That’s 90 billion euros. International partners will cover the rest,” she said.
“We are increasing the cost of Russia’s aggressive war. And this will act as a further incentive for Russia to engage at the negotiating table,” von der Leyen added.
The commission president suggested that the proposal to EU member states had taken into account almost all of the concerns raised by Belgium, whose Brussels-based financial institution Euroclear Is the main holder of frozen Russian assets.
Von der Leyen said the new proposal included other financial institutions with Russian assets in the EU, while EU officials said France, Germany, Sweden and Cyprus also had assets that would be used to fund the proposed loan.
The commission also said the scheme does not amount to confiscating the money in the form of a loan – although Ukraine would have to repay it only if it reparations for war damages.
The EU can move forward with the asset freeze proposal if 15 of the 27 members vote in favour. The Commission hopes to secure firm commitments from member states at the EU leaders’ summit on 18 December.
The other option – borrowing on international markets – usually requires consensus among EU countries, which could prove a difficult hurdle as Hungary’s Russia-friendly government has opposed previous funding for Ukraine.
Belgium has repeatedly opposed the frozen assets plan, suggesting that the proposed use of 140 billion euros ($163 billion) it holds would jeopardize the peace deal in the short term and risk crippling legal action from Russia in the future.
One demand from Brussels is that EU countries commit to cover all legal costs arising from future Russian lawsuits challenging the plan.
On Wednesday, hours before the presentation of the proposal, Belgian Foreign Minister Maxime Prevot reiterated these reservations, saying the legal text “does not satisfactorily address our concerns”.
“We’ve said repeatedly that we consider the repayment loan option to be the worst, because it’s risky; it’s never been done before,” Prevot said. “This explains why we are asking for the alternative, meaning the EU borrows the amount it needs in the market.”
Meanwhile, Russia has said the EU’s use of its assets would amount to theft. On Monday, Andrei Kostin, the head of VTB, Russia’s second largest bank, threatened to prosecute the bloc for 50 years if the idea went ahead.
Von der Leyen, meanwhile, said United States Treasury Secretary Scott Bessant “received the news of the proposed repayment loan positively”. This assurance comes despite the complexities associated with the Trump administration’s plan 28-point plan To end the war, which proposed using some assets in a joint US-Russian investment vehicle.
Earlier on Wednesday, the EU also agreed to phase out Russian gas imports by late 2027, a significant step towards ending the bloc’s decades-long dependence on Russian energy.
The EU announced a “historic agreement” between EU governments and representatives of the European Parliament on a June proposal by the European Commission to end Russian energy shipments.
According to the agreement, member countries will stop importing Russian liquefied natural gas (LNG) by the end of 2026. Import of pipeline gas will stop till November 2027.
The body said the move ended “dependency on unreliable suppliers”, which had “repeatedly destabilized the European energy market, threatened security of supply with energy blackmail and harmed the European economy”.
Von der Leyen welcomed the decision, saying “today we are entering an era of complete energy independence for Europe from Russia”.
“By deflating Putin’s war chest, we stand in solidarity with Ukraine and set our sights on new energy partnerships and opportunities for the region,” she said.
Hungary and Slovakia are likely to mount legal challenges to the measure, with both countries still dependent on gas and oil supplies from Moscow and fear more expensive alternatives would damage their economies.