EU's Kallas: Can go back to Russia frozen asset loan plan

EU's Kallas: Can go back to Russia frozen asset loan plan

EU Considers Reviving Loan Plan Using Frozen Russian Assets to Support Ukraine

European Union leaders are reassessing a proposal to leverage frozen Russian central bank assets to finance Ukraine's war efforts in 2026 and 2027, despite lingering legal and political challenges. The plan, which has faced significant opposition, remains a focal point as the EU seeks to counter U.S. criticism of European unity and ensure Kyiv's financial stability amid dwindling U.S. aid under the Trump administration according to Reuters.

The EU holds approximately €210 billion in Russian assets frozen since the invasion began, with €185 billion held in Belgium alone. Using these assets as collateral for a loan to Ukraine is seen by many as the most viable option to avoid increasing member states' debt burdens according to Reuters. However, Belgium has resisted, demanding indefinite legal guarantees against potential Russian lawsuits arising from the seizure of assets. Prime Minister Bart de Wever has argued that such guarantees—effectively a "blank cheque"—are impractical for other EU governments to provide according to Reuters.

Top EU diplomat Kaja Kallas acknowledged the plan's growing complexity but emphasized it remains the "most credible option" to sustain Ukraine financially according to Politico. German Chancellor Friedrich Merz warned that failure to agree would "severely damage" the EU's credibility and cohesion, particularly as external pressures mount. Diplomatic sources indicated that both Russia and the U.S. are actively lobbying EU member states to block the loan, with Washington reportedly favoring alternative terms for a potential peace deal according to Politico.

Hungary, Slovakia, and newly elected Czech Prime Minister Andrej Babiš have joined Belgium in opposing the scheme, citing legal risks and fiscal concerns according to Politico. While the EU could proceed with a qualified majority vote under emergency powers, securing broad support remains uncertain. A senior EU diplomat noted that negotiations will focus on narrowing Belgium's liability guarantees to a timeframe acceptable to all parties according to Reuters.

The outcome of these discussions will determine whether the EU can maintain its role as a key financial backer of Ukraine, with implications for both regional security and transatlantic relations. A final decision is expected by Friday, December 18, 2025 according to Reuters.

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