EU Freezes Russian Assets Indefinitely to Back Major Ukraine Loan Plan

The European Union agreed to freeze Russian central bank assets indefinitely on Friday. The move happened in Brussels. It aims to support a major loan plan for Ukraine as the war enters another year. The decision affects about 210 billion euros held across Europe.

According to Reuters, EU officials said the freeze will no longer need renewal every six months. This removes the risk of a veto from states that have closer ties with Moscow. The plan is a key step for a larger financing package for Ukraine in 2026 and 2027.

EU Indefinite Asset Freeze Strengthens Ukraine Funding Plan

EU leaders want steady help for Ukraine. They say the war also threatens European security. The frozen Russian assets are meant to back a loan worth up to 165 billion euros. The money will help cover Ukraine’s military and civilian costs.

Belgium had been cautious about the plan. It wanted legal guarantees. EU governments now say such guarantees will be shared among all states. Germany is ready to support with 50 billion euros in guarantees, according to European diplomatic sources.

Ukraine welcomed the decision. Officials in Kyiv said the move brings the country closer to real reparations. They say Russia should pay for the damage caused by its invasion. The EU Council will meet on December 18 to decide final details.

The freeze also limits potential holdouts. Hungary and Slovakia have often raised concerns. The new model uses a qualified majority vote. It allows decisions even without full consensus. Hungary’s prime minister said the move could harm the EU, but officials in Brussels disagreed.

Impact on Russia, EU Markets, and Future Talks

The Russian central bank called the EU’s actions illegal. It said it will take every possible step to protect its interests. It has also started legal action against Euroclear in Moscow. Euroclear holds about 185 billion euros of the frozen funds. It has faced similar lawsuits since 2022.

The financial impact on European markets appears limited for now. But analysts say long legal battles are likely. They also say the move marks a major shift in how frozen sovereign assets are handled during conflicts.

EU officials are also discussing broader political steps. Reports from the Financial Times say Ukraine’s EU membership talks could speed up. Some diplomats say joining by 2027 would be very hard. Others say the timeline is almost impossible.

The EU decision marks a major step. It strengthens the Ukraine loan plan built on frozen Russian assets. It also sets up a tough legal and political path for the years ahead.

FYI (keeping you in the loop)-

Q1: Why did the EU freeze Russian assets indefinitely?

The EU wants a stable way to support Ukraine. A long freeze removes the need for repeated votes. It also blocks any single country from stopping the measure.

Q2: How much money is affected by the freeze?

About 210 billion euros in Russian central bank assets are frozen. Most of the money sits in European financial systems. Euroclear holds the largest share.

Q3: How will the loan for Ukraine work?

The EU plans a loan of up to 165 billion euros. Ukraine will repay it only when Russia pays war damages. This makes the loan similar to an advance on future reparations.

Q4: Is Russia taking legal action?

Yes. The Russian central bank says the EU move is illegal. It is also suing Euroclear in Moscow courts.

Q5: When will EU leaders decide final terms?

EU leaders will meet on December 18. They plan to confirm the loan plan and settle issues like guarantees and legal protection.