EU Moves Toward High‑Risk Plan to Use Frozen Russian Assets for Ukraine Funding

EU leaders will meet in Brussels this week to decide whether to use frozen Russian assets to fund Ukraine. The move is new, risky, and deeply divisive. The summit starts Thursday and could shape EU unity for years.The debate comes as Ukraine faces a severe cash crisis. It needs large aid packages by spring to avoid collapse. According to Reuters and AP reporting, the EU wants a long-term plan that keeps Ukraine stable through 2027.

EU Frozen Russian Assets Plan Faces Legal and Political Tension

The European Commission wants to use part of the 210 billion euros in frozen Russian assets to back a 90 billion-euro loan. The funds would help Ukraine cover military and economic needs. The U.K., Canada, and Norway would support the rest.The European Central Bank has warned this move could damage trust in the euro. It fears global investors may see it as asset seizure. Most assets are held at Euroclear in Brussels, which also worries about its reputation and legal exposure.AP reports that Russia has already sued Euroclear in a Moscow court. The case will likely fail but adds pressure before the summit. Belgium, which hosts Euroclear, fears retaliation if the EU pushes forward.Some countries want another path. A second option is a major EU-backed loan raised on global markets. This model was used during the pandemic recovery fund and is backed by Belgium. But it requires all 27 EU nations to agree.Hungary refuses to support Ukraine funding. Its leader, Viktor Orbán, remains the closest EU ally to Moscow. Because of this, the second option is likely blocked. The first plan needs only a two‑thirds majority, so Hungary cannot stop it alone.

EU Leaders Split on Risks as Ukraine Crisis Intensifies

EU officials say Ukraine needs a firm commitment now. It faces huge financial demands in 2026 and 2027. The IMF estimates these needs at 137 billion euros.Some EU countries fear long-term consequences. Belgium, Italy, Malta, Bulgaria, and Slovakia have concerns. They question guarantees if Russia reacts or if Euroclear faces global fallout.Still, many leaders argue that the war leaves no time for delay. They say the EU must act before Ukraine reaches bankruptcy. Reuters notes that the European Commission sees the plan as legally solid, though several capitals disagree.Talks are still ongoing about how to share risk. Leaders must also clarify what protections Belgium will receive. Officials say parliaments may need to approve parts of the plan.Diplomats warn that forcing the plan through could hurt EU unity. It may make future deals harder. But others say blocking it would leave Ukraine exposed at a critical moment.

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The debate over frozen Russian assets will shape EU policy for years. The final decision will test trust inside the bloc and show how far Europe is willing to go to support Ukraine.

FYI (keeping you in the loop)-

Q1: What are frozen Russian assets in Europe?

They are Russian Central Bank funds blocked by the EU after the war began. Most are held at Euroclear in Brussels. They total about 210 billion euros.

Q2: Why does the EU want to use these assets?

The EU wants to help Ukraine avoid collapse. The money would support military and economic needs. Leaders say the timing is urgent.

Q3: What risks does the plan carry?

The ECB warns it could harm trust in the euro. Euroclear fears legal and investor backlash. Belgium worries about retaliation from Russia.

Q4: Can Hungary block the plan?

Hungary can block the alternative market-loan plan. But it cannot block the main option that needs only a two‑thirds majority. This makes the first plan more likely.

Q5: What is the backup plan?

The backup plan is an EU loan raised on global markets. Belgium prefers this option. But it needs unanimous support, which Hungary refuses to give.