EU pushes to release €140 bn from frozen Russian assets for Ukraine aid

Andrea Palasciano and Sanne Wass

  European Union leaders are building momentum for a plan to provide Ukraine with €140 billion ($164 billion) in loans from immobilized Russian central bank assets at a summit in Denmark.  

Backing for the long-standing proposal to leverage the assets has gained traction after the US under President Donald Trump halted its direct support for Ukraine, leaving Europe to shoulder the burden for the war-battered nation’s financial needs.  

“When Russia chooses to attack Europe, there is a large bill to pay,” Danish Prime Minister Mette Frederiksen told reporters ahead of the meeting in Copenhagen Wednesday, as she backed a European Commission proposal to deploy the funds for Ukraine’s military as well as reconstructions.  

“But the intention is that the Russians will be the ones to pay,” she said.  

German Chancellor Friedrich Merz last week threw his weight behind the idea, lending the support of the EU’s biggest economy to the plan, in what amounted to a shift in stance after Berlin had touted legal concerns. In an op-ed published in the Financial Times, Merz said the EU must “systematically and massively raise the costs of Russia’s aggression.” 

The commission, the EU’s executive arm, presented capitals with the frozen-asset blueprint late last week in the hopes of securing support before a formal EU summit at the end of the month. 

But member states including Belgium and France want to see details on the plan’s legal basis and other logistics ironed out before moving forward.  

“We must remain an attractive and reliable place, as the EU, which means that when assets are frozen, international law is respected,” French President Emmanuel Macron told reporters. “We must give Ukraine visibility in terms of financing.”  

Luxembourg’s prime minister, Luc Frieden, said seizing assets from another state presents a “difficult legal question.” 

Kremlin spokesman Dmitry Peskov called the EU asset plan an “illegal seizure of Russian property, theft.” Those participating will be prosecuted, he said, according to the state-run Tass news agency.  

Separately, Group of Seven finance ministers will discuss tapping Russian assets in a call Wednesday, seeking a joint approach to using the move to increase economic pressure on Russia.  

Legal Concerns 

The proposal foresees the use of the funds raised from the approximately €180 billion in Russian assets held at Brussels-based clearing house Euroclear. The financing would be gradually redirected to the EU to enable it to issue loans in tranches to Kyiv. 

The proposal has raised concerns over international law with respect to asset seizures. To assuage member states including Belgium, Euroclear’s host and a main holdout, the EU has proposed a “tailored debt contract” with the clearing house with a 0% interest rate to ensure it can honor any potential future Russian claims.  

Kaja Kallas, the EU’s top foreign policy official, said she wouldn’t set a deadline for reaching consensus on the plan, though she’s pushing ahead “as fast as possible.”  

“It’s not supported by everybody yet — so, there is still a lot of work to do,” Kallas said.  

The operation would be guaranteed by member states — and the EU is hoping to have the loan arrangement in place by the end of the year to begin issuing funds to Ukraine in 2026. The International Monetary Fund forecasts a $65 billion financing gap through 2027. Ukraine has also requested $60 billion for defense over the next year.  

The IMF persuaded Kyiv this month to significantly increase its projections for funding needs through 2027 to reflect the protracted war, well into its fourth year.  

Kyiv would only have to pay back the loan — which the EU would then repay to Euroclear — if Moscow agrees to pay reparations to Ukraine, according to the proposal.  

Merz, who gave brief remarks entering the summit, said last week that Germany remains cautious on the issue of confiscating assets — with international law as well as the euro’s role as a global reserve currency at stake.  

“But this must not hold us back,” the chancellor wrote in the FT.