‘We will not leave without a solution’

European leaders meet to discuss using Russia’s frozen assets to support Ukraine

European leaders are gathering in Brussels for a two-day summit that Swedish Prime Minister Ulf Kristersson has called the most important since the start of Russia’s full-scale invasion of Ukraine. The talks will focus on whether Russia’s frozen assets in Europe can be used to support Kyiv, including a European Commission proposal for a reparations-backed loan. While the plan would grant Kyiv more long-term financial stability than other funding pathways, multiple member states are still skeptical of the approach — including the country where the assets are held. Meduza explains what’s at stake.

The main agenda item at the E.U. summit beginning Thursday is the fate of Russia’s frozen assets and whether they could be used to bankroll Ukraine’s defense. The European Commission has proposed offering Kyiv a loan backed by those assets, to be repaid from reparations that Russia would be required to pay after the war. Moscow, meanwhile, insists it has no intention of paying reparations and maintains that any E.U. plan to use its sovereign assets would be illegal.

Last week, E.U. countries agreed to freeze Russia’s assets indefinitely. Previously, the freeze had to be renewed every six months as part of the bloc’s sanctions regime. Under the new arrangement, even if the war ends and sanctions are lifted, the E.U. could continue to withhold the funds.

The European Commission has suggested treating the proposed reparations-backed loan as a case of “severe difficulty,” which, under Article 122 of the Treaty on the Functioning of the European Union, would allow a decision to be made by a qualified majority rather than unanimously. This could sidestep what is widely seen as an almost inevitable veto by Hungary or Slovakia.

Belgium, where most of the frozen Russian assets are held, opposes the plan. For the country to agree, it is demanding clear guarantees from other E.U. states that, in the event of future lawsuits by Russia, liability would be shared across the bloc rather than falling solely on Belgium. Defining the scope of these guarantees is expected to dominate the summit’s discussions.

In addition to Belgium, Hungary and Slovakia, Italy, Malta, and Bulgaria have voiced skepticism about the loan proposal. Last week, the three countries called for exploring alternative options, though they stopped short of vowing to block the plan. The Czech Republic has also suggested seeking other funding sources.

Another option under discussion is financing Ukraine through loans backed by E.U.-wide bonds, with repayments to be covered by future E.U. budgets. European leaders consider this undesirable, as it would place the cost on taxpayers. It would also require approval from all 27 member states, and Hungary has already pledged to block it.

Other alternatives include bilateral assistance from individual E.U. countries. However, this approach would also rely on taxpayer money, and such one-off payments would leave Kyiv without long-term financial stability.

If the summit fails to reach an agreement, Ukraine could face a severe budget shortfall within months, threatening its ability to sustain the war. President Volodymyr Zelensky has traveled to Brussels to attend the summit in person.

Supporters of the reparations-backed loan proposal fear that if the war ends quickly on Russia’s terms, Moscow could later launch military aggression against the E.U. “Now we have a simple choice — either money today or blood tomorrow. All European leaders have to finally rise to this occasion,” Polish Prime Minister Donald Tusk said on Thursday. European Commission President Ursula von der Leyen said E.U. leaders would “not leave the summit” until an agreement is reached on funding Ukraine for the next two years.

A qualified majority vote would require the backing of 14 of the E.U.’s 27 member states, representing two-thirds of the bloc’s population. This means that even if Belgium, Italy, Bulgaria, Malta, the Czech Republic, Hungary, and Slovakia vote against it, the loan could still be approved. However, analysts have warned that such a clear division within the E.U. could, over the long term, undermine the very concept of the European Union and erode collective trust in its solidarity mechanisms.