EU Moves Ahead With Plan to Fund Ukraine Using Frozen Russian Assets Amid Rising Tensions Over Peace Talks
The European Commission on Wednesday unveiled a long-anticipated plan to provide Ukraine with a multibillion-euro loan backed by profits from frozen Russian assets. This move is framed as both an economic lifeline for Kyiv and a geopolitical message to Moscow that prolonging war will carry escalating costs.
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“Pressure is the only language the Kremlin responds to,” von der Leyen told reporters. “We want peace, but peace must come from a position of strength.”
The proposal, released ahead of a decisive EU summit later this month, comes amid signs of deadlock in international peace efforts.
Kremlin spokesperson Dmitry Peskov confirmed Wednesday that President Vladimir Putin had reviewed US peace proposals but found parts of them "unacceptable," despite not rejecting them outright.
The EU, excluded from those talks, has meanwhile doubled down on its own support strategy for Ukraine.
Belgium, where financial services firm Euroclear holds the bulk of the €210 billion in frozen Russian reserves, remains vocally opposed to the reparations loan framework.
Foreign Minister Maxime Prévot said the plan posed “unacceptable” financial and legal risks and warned the current draft fails to provide sufficient guarantees.
Belgian authorities say they are being asked to assume disproportionate liability without adequate legal protections.
Still, von der Leyen made clear that the Commission could proceed without unanimous backing, noting that the scheme only requires a qualified majority among member states.
She insisted that the Commission had taken Belgium’s concerns into account and promised “robust safeguards” to shield EU institutions from legal exposure.
Commission officials confirmed that the loan would not require Ukraine to repay the principal unless Russia paid reparations, effectively making the funds a conditional advance.
The money will primarily be used to procure military equipment from EU and EEA countries, with occasional exceptions for external purchases.
NATO Secretary General Mark Rutte, speaking ahead of a defence ministers' meeting in Brussels, reiterated the alliance’s readiness to support Ukraine for “as long as it takes,” warning that Russia continues to show no genuine interest in peace.
“We must be prepared for a long road,” he said, declining to comment on Putin’s recent statements declaring Russia “ready” for war with Europe.
Meanwhile, Ukrainian President Volodymyr Zelenskyy called for urgent reforms in the defence sector after new corruption allegations destabilised his administration.
He also confirmed that his team would meet European national security advisors to brief them on the status of US-brokered talks and begin coordination ahead of expected meetings with US envoys.
On the ground, Ukraine’s budget situation has become increasingly precarious. With EU leaders failing in October to agree on a longer-term funding package, Kyiv faces a significant fiscal shortfall by spring 2026.
European officials say failure to act now could severely weaken Ukraine’s battlefield resilience and negotiating power.
Adding to the complexity, Hungary and Slovakia have vowed to legally challenge the EU’s parallel plan to end Russian gas imports by 2027, citing energy security concerns.
And, in a separate but significant development, former EU foreign policy chief Federica Mogherini was detained in Brussels as part of an ongoing fraud probe, which is again a reminder of the internal governance pressures also facing the bloc.