European Union leaders gather in Brussels for a critical summit to decide whether tens of billions of euros from frozen Russian assets should be loaned to Ukraine to sustain its war effort and economic stability.
The talks come amid growing concern that Kyiv could run out of funding in the coming months without fresh support from its European allies.
The EU holds roughly €210bn (£185bn; $245bn) of Russian money, with most controlled by Euroclear, a Belgium-based financial institution. Belgium, along with several other member states, has voiced opposition to releasing the funds directly. So far, only the interest earned from these assets has been passed on to Ukraine.
European officials warn that failing to approve the loan could leave Ukraine in a precarious position. One European diplomat described the mood as "cautiously optimistic, not overly optimistic" that consensus might be reached. Russia, meanwhile, has threatened legal action, filing a case against Euroclear in Moscow to reclaim the frozen money.
The summit coincides with renewed discussions over peace. US President Donald Trump said the possibility of ending the war is "closer now than we have been ever", although Russia has not responded to the latest peace initiatives. Kremlin officials have also rejected proposals for a European-led multinational force in Ukraine, saying such plans are unacceptable.
President Vladimir Putin criticized Europe this week, saying the continent is in "total degradation" and describing its leaders as "European piglets" seeking to benefit from Russia’s weakened position.
Supporters of the plan argue that lending the funds would bolster Ukraine’s resilience and deter further Russian aggression. The European Commission has proposed loaning Kyiv about €90bn (£79bn) over two years, covering roughly two-thirds of Ukraine’s estimated needs through 2027.
"This is a crunch time for Ukraine to keep fighting for the next year," a Finnish official told the BBC. "There are of course peace negotiations but this gives Ukraine leverage to say 'we're not desperate and we have the funds to continue fighting'."
Ursula von der Leyen, president of the European Commission, emphasized that the plan would increase the cost of war for Russia. Speaking to the European Parliament, she said, "We know the urgency. It is acute. We all feel it. We all see it."
Belgium has suggested an alternative: borrowing on international markets rather than using the frozen funds. However, this would require unanimous support from all member states, and Hungary’s Viktor Orban has signaled he will block any additional EU funding for Ukraine.
The outcome of the summit is critical for Kyiv. President Volodymyr Zelensky is expected to attend, as leaders debate the legal and political risks of the loan. German Chancellor Friedrich Merz has strongly advocated for using the frozen assets, telling the Bundestag it would send a "clear signal" to Moscow that continuing the war is futile.
Despite confidence from EU officials about the legal foundation for the loan, doubts remain. Belgian Prime Minister Bart De Wever has yet to approve, with Defence Minister Theo Francken warning that the move would be a serious mistake.
Hungary is considered the strongest opponent, with Orban’s team claiming the matter had been removed from the summit agenda—a claim denied by the European Commission. Slovakia’s Robert Fico has also opposed using the funds for weapons instead of reconstruction.
The final vote will require support from around two-thirds of EU member states. European Council President António Costa pledged not to bypass Belgium, saying, "We're not going to vote against Belgium. We'll continue to work very intensively with the Belgian government because we don't want to approve something that might not be acceptable for Belgium."
Ratings agency Fitch has placed Euroclear on negative watch partly due to risks linked to the EU plan. Euroclear’s CEO has also expressed caution. "There are many hiccups and obstacles of course still on the way. We have to find a way to respond to Belgium's worries," said the Finnish official.
Italy’s Giorgia Meloni told Italian lawmakers she would back the proposal only "if the legal basis is solid." "If the legal basis for this initiative were not solid, we would be handing Russia its first real victory since the beginning of this conflict," she said. Malta, Bulgaria, and the Czech Republic are also reportedly hesitant.
If approved, Belgium faces the risk of being ordered to return the funds to Russia by a court. Some countries have pledged billions in guarantees, but Belgium is seeking clear assurances. EU officials maintain that Russia could only regain the money by paying reparations to Ukraine, after which Kyiv would repay the loan to the EU. The decision now rests with EU leaders, balancing urgency, legality, and political unity.
