EU Plans to Utilize Frozen Russian Assets for Ukrainian Support

Thu Oct 23 2025 19:19:11 GMT+0300 (Eastern European Summer Time)

European leaders are preparing to endorse a plan that would use frozen Russian assets, amounting to €140 billion, to support Ukraine's recovery from ongoing war damages. The initiative is marked by legal complexities, potential financial repercussions, and increasing international scrutiny.

In a pivotal meeting in Brussels, EU leaders are set to discuss a controversial proposal to reallocate €140 billion of frozen Russian state assets to aid Ukraine in its recovery efforts amidst the ongoing conflict. Despite legal challenges and concerns over financial stability, member states are weighing the urgency of supporting Kyiv as the war stretches into its fifth year. The proposal aims to transform frozen investments into a 'reparations loan,' but faces skepticism from some EU members who worry about the precedent it sets and Russia's potential backlash.

EU Plans to Utilize Frozen Russian Assets for Ukrainian Support

European leaders are preparing to endorse controversial plans to use Russian frozen assets to support Ukraine at a meeting in Brussels on Thursday.

The unprecedented proposal for what the EU has dubbed a reparations loan - would see Kyiv receive €140bn (£121bn) worth of frozen Russian state assets currently held by Euroclear, a Belgium-based financial institution.

The plan has been months in the making, partly due to the legal complexities surrounding it, as well as concerns from member states about upsetting global financial stability.

Belgium, in particular, has been reluctant to back using the frozen assets, worried about potential consequences should Russia legally challenge Euroclear.

Russia has reacted angrily to any suggestions that the EU could utilize its money.

Understanding the Reparations Loan

As U.S. support for Ukraine has dwindled, the urgency for the EU to find ways to continue backing Kyiv has intensified. With an estimated price tag for reconstruction exceeding $486 billion, the frozen Russian investments, amounting to €210 billion, present a potential lifeline for Ukraine.

The European Commission has been using interest accrued from these frozen assets for Ukraine's defense since spring 2024. The new plan proposes redirecting these assets themselves as a zero-interest loan, with repayments expected from Russia once the war concludes.

Legal and Political Challenges Ahead

Legal complexities arise from international law stipulating that sovereign assets cannot be outright confiscated. The EU may consider borrowing these assets and replacing them with IOUs backed by member states to navigate these challenges.

While countries like Poland and the Baltic states support the plan, skepticism remains, particularly from nations like Hungary and Slovakia, wary of Russia's potential economic retaliation.

With discussions still ongoing, the political landscape remains divided over how to utilize the financing efficiently and how extensive Ukraine's autonomy over the allocated resources should be.