European Union leaders are considering new steps to provide long-term financial and military support for Ukraine, with the use of frozen Russian assets at the center of the debate. The decision, discussed at the Brussels summit, is seen as an alternative to joint EU borrowing, but is fraught with legal and political dilemmas.
European Union leaders are failing to reach agreement on a financing deal for Ukraine, which is being seen as a choice between "money today or bloodshed tomorrow."
At a summit starting Thursday in Brussels, European leaders are discussing an unprecedented move to use some of Russia's frozen assets worth 210 billion euros to meet Ukraine's economic and military needs in the coming years.
Belgium is the country that is opposing such a loan without providing guarantees.
Polish Prime Minister Donald Tusk has said that European leaders face a simple choice:
"Either money today or bloodshed tomorrow."
Tusk stressed that they see hope in using Russian assets so that EU budget reserves are not used, but added that Belgian officials and those from several other countries are concerned that their countries could face legal counterclaims from Russia if they agree to release these funds.
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"The main EU states are not enthusiastic about using the EU budget reserves. Therefore, I see no hope of using European money directly. Instead, a loan in the form of reparations, based on Russian assets, will be considered. Also, strong guarantees will be required for the most vulnerable countries, such as Belgium, so that they feel really protected," Tusk stressed before the meeting.
Of the total 210 billion euros of Russian assets frozen in the EU after Russia's invasion of Ukraine in 2022, around 185 billion euros are held in Belgium, at the financial institution Euroclear.
And Ukrainian President Volodymyr Zelensky has told European leaders that legal threats from Russia don't have to be so scary when you don't have it on the border.
He has said that from a moral point of view, it is right to use Russian funds against their attacks on a sovereign country.
"Just as authorities confiscate the money of drug traffickers and seize the weapons of terrorists, Russian assets should be used to defend against Russian aggression and to rebuild what has been destroyed by Russian attacks. This is moral. It is right. It is legal," Zelensky declared.
European Commission President Ursula von der Leyen has said that “we will not leave the summit without a solution.” A European government official said he was “cautiously optimistic, but not overly optimistic” that a deal would be reached.
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But the focus was on Belgian Prime Minister Bart De Wever, who told the Belgian parliament on Thursday that, if everything is finalized and approved by the rest of the EU, “then we will jump into the abyss together with the other Europeans and hope that the parachute will hold us up.”
The European Union's foreign policy chief, Kaja Kallas, has said that she sees the chances of reaching an agreement on the assets as 50-50, while German Chancellor Friedrich Merz said he has the impression that an agreement can be reached.
The latest version of the summit's draft conclusions, which have not yet been approved and could change significantly, and which was seen by Reuters, foresees leaders making the political decision to move forward with the reparations loan and tasking officials with "urgently" clarifying the details.
The draft text specifies that the risk will be shared among EU states, along with several other conditions intended to appease Belgium and other countries.
Meanwhile, official Moscow has warned that it will respond with harsh retaliation if Europe uses frozen Russian state assets to support Ukraine.
Russian President Vladimir Putin has called the European plans "piracy" and "property theft," while Russian officials have openly discussed seizing Western assets remaining in Russia if the bloc decides on the Russian assets.
Official Moscow has explored legal and regulatory measures that would facilitate further nationalizations, building on a campaign that has already stripped foreign companies of billions of dollars since the invasion of Ukraine.
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The Guardian reported on Wednesday that Belgian politicians and senior finance officials have also been targeted by an intimidation campaign orchestrated by Russian intelligence, aimed at pressuring Brussels to block the use of 185 billion euros in frozen assets to support Ukraine.
Russia's threats have fallen unevenly across the bloc. Belgium, Italy and Austria - countries with banks, companies and financial infrastructure still deeply exposed to Russia - have expressed growing concern that retaliation would hit them first and hardest.
Western companies still have about $127 billion in assets in Russia, according to the Kiev School of Economics Institute, while more than 2,000 foreign firms continue to operate in the country.
Moscow also controls large sums held in so-called type C accounts, where dividends and investment income owed to Western investors are frozen.
Russian media outlet RBK has reported that the Kremlin could quickly redirect these funds to the state budget if Europe decides in favor of Ukraine by using Russian assets.
The summit will continue on Friday.
