EU leaders have been meeting in Brussels, amid sharp divisions over a proposal to use frozen Russian state assets to finance Ukraine’s military – a plan Moscow has denounced as outright theft and warned would trigger legal retaliation.
The bloc's leaders have been locked into talks that have gone into the night, after European Commission President Ursula von der Leyen demanded that nobody be allowed leave until financing for Ukraine has been secured. Ukraine faces an estimated $160 billion fiscal shortfall over the next two years.
The talks reportedly hang on the bloc's willingness to provide an uncapped financial backstop to Belgium, and potentially the other EU countries holding Russian funds, when Moscow seeks legal redress.
Bloc members have long debated tapping Russian central bank funds estimated at around €210 billion ($246 billion) as part of a so-called “reparations loan” to Kiev (to understand why that is a misnomer and part of EU spin, read here) which it will have to repay only if Russia agrees to pay war damages.
The idea, pushed by EU chief Ursula von der Leyen, has faced mounting resistance from several member states, which argue the move risks undermining the bloc’s legal foundations, damaging confidence in the Eurozone, and exposing European institutions to costly lawsuits.
Belgium, where most of the assets are held via the Euroclear settlement system, has been a particularly vehement critic of the plan, demanding that legal risks be shared among other EU members.
Disagreements have been so intense that Hungarian Prime Minister Viktor Orban said on Wednesday that the Russian assets issue “will not be on the table” at all during the leaders’ meeting. The official agenda also does not explicitly mention Russian assets, saying only that EU leaders “will discuss the latest developments in Ukraine and issues that require urgent EU action.”
EU sanctions normally require unanimous approval, giving any single member state a veto. To avoid that, the bloc last week invoked controversial emergency legislation – already the subject of a legal challenge by the European parliament – to lock the assets in place temporarily, arguing that any subsequent steps can be approved separately by a qualified majority of 55% member states representing at least 65% of the EU’s population.
Moscow has warned that any attempts to seize its assets will constitute “theft” and violate international law, adding that the move would trigger retaliatory measures and legal action.
18 December 2025
The talks are now reportedly hanging on the nature of the “uncapped” support for Belgium from other EU members. Belgium is effectively insisting that other EU countries provide an unlimited financial backstop in the event that Russia seeks damages for the “reparation loan.” This is a hard sell for the bloc's leaders, who would have to ask their taxpayers to stump up hundreds of billions, in the likely event that Russia successfully sues.
Leaks are coming from the talks, with a lot to be learned from who got them. This time its von der Leyen propaganda channel Euronews with an alleged text of a document under discussion.
According to Euronews the text covers “full respect for EU and international law to ensure there is no confiscation or expropriation of Russia's sovereign assets and contractual obligations between European financial institutions and the Russian Central Bank.” (We'll see what Moscow has to say about that.)
It also details the obligation to ensure that all EU institutions with Russian assets channel their funds into the reparations loans, “without exceptions”. This will include banks in Germany, France, Cyprus and Sweden, as well as Belgium's Euroclear.
The possibility to issue a “secured debt instrument” that financial institutions will be able to trade to rapidly obtain liquidity and honour their claims with the Russian Central Bank.
Ensuring all costs arising from the reparations loan are covered by member states collectively (“uncapped” is mentioned here between brackets.)
Also listed are shared guarantees according to member states' economic weight. Payments to Ukraine will begin only after 75% of the guarantees are in place.
The guarantees will not be counted against the debt level of member states.
The reparations loan will fund BOTH Ukraine's and Europe's defence industries as well as preserving the €45 billion loan by G7 to Kiev which is due now.
Also, Ukraine will be subject to anti-corruption milestones to obtain the assistance.
The Czech, Hungarian and Slovakian leaders, all of whom oppose stealing Russian assets and prolonging Ukraine’s war, have convened.
There is no plan B to replace the use of Russia’s assets to finance Ukraine, a German official has told Euractiv.
“It’s either the loan or no European solution at all,” they reportedly argued.
This is factually false, as von der Leyen herself has proposed a joint-debt program along the lines of the program the bloc employed during the Covid pandemic.
The debate on how to fund Ukraine's economy has finally begun in earnest, according to reporters at the scene. Euractiv claims to have seen a document from the talks containing the phrase “uncapped solidarity” in relation to passing the likely cost of stealing Russian assets on to other EU countries. That cost could be several times larger than the initial sum involved when legal cases have been settled.
Farmers and police have clashed in front of the EU headquarters earlier today, while the bloc's leaders attempted, and failed, to push through a trade deal with Mercosur. It is worth noting that the farmers plight could considerably worsen should Ukraine be admitted to the bloc.
Belgian “war room” ready for a long night, Pascal Heyman, Prime Minister Bart de Wever’s chief of staff for foreign affairs has said on social media.
European Commission President Ursula von der Leyen told EU leaders the Mercosur trade deal will not be signed as scheduled on Saturday and will instead be delayed until next month, Politico has reported, citing two EU diplomats.
EU leaders have wrapped up a shorter-than-expected discussion on geo-economics and are now taking a break. They are reportedly set to turn to the main issue of the night – the financing for Ukraine – over dinner.
Today's wrap-up:
- The European Commission and von der Leyen want to use the $246 billion to back a “reparations loan” to Kiev – a scheme opposed by several countries, including Hungary and Slovakia.
- Most of Russia’s €210bn (£185bn; $245bn) worth of assets in the EU are held by Euroclear, the Brussels-based securities depository.
- Belgium is anxious about being left exposed to legal and financial risks, other states, including Italy, have also voiced concerns. EU leaders arriving at the summit in Brussels said it was imperative they find a solution.
- Russia has filed a lawsuit against Euroclear in a Moscow court. The country's central bank said in a statement today that it will seek damages from European banks in a Russian arbitration court over the illegal blocking and use of its assets, in the amount of the withheld funds and lost profit.
- Zelensky urged EU leaders to reach a deal, also claiming that the US may eventually let Ukraine into NATO: “Politicians change: some leave, some die,” he said.
- A draft summit text presented on Thursday seen by media outlets pledged “full solidarity” and risk-sharing with countries and financial institutions in the context of the reparations loan. But the text seen by the Guardian was scant on details sought by Belgium.
- Polish PM Tusk said the EU leaders had a simple choice: “Either money today or blood tomorrow.”
Slovak Prime Minister Robert Fico said EU summit talks in Brussels are “in full swing,” joking that he has extra time to negotiate after his government plane was damaged and grounded. Writing on X, he said discussions have focused on the EU’s 2028–2034 budget and are now entering the final stage on a proposed “military loan for Ukraine,” adding that he is sticking to his “sovereign, different stance.”
Residents are collecting potatoes along the roads in Brussels after farmers dumped truckloads of them during today’s protests.
Technical talks are underway between Belgium, the European Commission and the European Council to address Belgium’s concerns over the Russian assets, according to Euronews reporter Jorge Liboreiro. Once the revised draft conclusions are ready, the text will be put to EU leaders for discussion, he wrote on X.
“The idea is to keep working on the text and then present it to the leaders after the dinner on geo-economics, which has not started. Then, the real debate will begin,” he wrote, noting that the technical work is focusing “exclusively on the reparations loan.”
“Plan B, joint debt, has not yet been addressed, as it depends on unanimity,” Liboreiro added.
Belgium, where most of the immobilized funds are held, has been raising objections due to the legal and financial risks.
Any move by the West to expropriate Russian assets will be met with a response, Kremlin spokesman Dmitry Peskov has said.
“We have repeatedly said that any actions linked to the expropriation of our assets will receive a retaliatory reaction,” he told Russia 1 TV when asked whether Moscow is considering a reciprocal seizure or freeze of Western assets in the country.
Tusk offered no clarity on whether EU leaders had agreed on a way forward, saying only that Europe faced a “simple choice” between financial support now or “blood” down the line - a decision he said European leaders must confront themselves.
European Central Bank President Christine Lagarde has warned against expecting the ECB to underwrite any potential loan for Ukraine as European leaders debate tapping Russian central bank funds frozen in the West as part of a so-called “reparations loan.” The ECB has earlier cautioned that borrowing against the immobilized assets risks eroding confidence in the euro.
“We are an area of the world which praises itself for respecting the rule of law,” Lagarde told a press conference in Frankfurt, as quoted by Politico. “It’s not for the central bank to actually encourage [or]support a mechanism under which we would be called upon – and scheduled – to breach Article 123 of the Treaty,” she said, arguing the rule bans “monetary financing” – effectively central-bank funding of government spending – which such a Ukraine loan could amount to.
The EU Council has decided to link Ukraine to the European Defense Fund, Ukrainian Defense Minister Denis Shmigal has claimed. The European Defense Fund is the Commission’s central defense initiative, though its results have largely been measured in strategy papers rather than deployable capabilities.
Thousands of farmers from across Europe marched through Brussels today to protest European agricultural policy as the summit was taking place.
In case you’re just joining us:
• The EU’s most powerful political operators are scrambling to try to secure a deal that will allow them to continue their posturing on Ukraine.
• While the hawks have insisted on issuing the “reparations loan” as soon as possible, the moderates have sounded the alarm over potential legal, financial, and reputational risks.
• Belgium remains one of the key opponents of the plan, and is being singled out for special attention. Belgian PM De Wever has had a face-to-face with Vladimir Zelensky.
• The Russian central bank has significantly escalated the stakes by warned that it would seek damages from “European banks” and not only from Euroclear.
• Reports are emerging of a German concession to share risk that could address Belgium’s concerns.
• The meeting attendees are now facing “many hours of increasingly technical discussions,” according to Polish Prime Minister Donald Tusk.
European leaders appear “obsessed” with the idea of finding money to keep the war going, Kremlin spokesman Dmitry Peskov has told the Russia 24 TV channel.
The discussion of financing Ukraine has reportedly started, according to Euractiv.
The confiscation or use of other states’ sovereign assets undermines trust in the international financial system, former Ukrainian PM Nikolay Azarov has told RT.
The European Commission, instead of focusing on the economy and citizens’ well-being, has focused on financing Kiev, he added. By doing that, they basically distract attention from internal crises in their countries, Azarov claimed.
Deutsche Welle has reported that Merz has made a concession to Belgium to spread the cost of Euroclear seizing Russian assets by making available Russian central bank assets held in Germany to fund Ukraine, reportedly a response to demands by Belgian PM Bart De Wever to mitigate the considerable risks to EU members.
The demonstration over the EU’s potential trade deal with the South American bloc Mercosur has drawn farmers into the Belgian capital as EU leaders meet for a summit. The Mercosur deal and securing finance for Kiev are seen as two tests of the EU’s fitness for purpose and its international standing. It looks like one of those summit pillars is on the brink of collapse, with no sign of any clarity on pushing through the theft of Russian assets.
“We’re here to say no to Mercosur,” a Belgian dairy farmer reportedly told AFP. “It’s like Europe has become a dictatorship,” he said, accusing European Commission chief Ursula von der Leyen of seeking to “force the deal through.”
Ukraine’s economy is heavily agricultural, and the prospect of Kiev joining the EU could sharply increase competition – potentially swelling the ranks of protesters.
The protest outside the European Parliament in Brussels is turning ugly, according to media reports. Photos from the scene show farmers burning car tires and clashing with riot police, who fire back with teargas, at Place du Luxembourg.
Footage posted on X shows police clearing the square after hours of tension, with officers attempting to arrest a farmer before retreating under pressure from the crowd.
Reuters claims to have seen a draft EU summit conclusions “that are subject to change.”
EU leaders will ask the bloc’s have to urgently adopt instruments establishing a “reparations loan” based on cash balances linked to Russia’s frozen assets, according to the report.
EU leaders also want a reparations-backed loan to provide financial support for Ukraine starting in the second quarter of 2026, including for military needs.
Russian spy chief Sergey Naryshkin has weighed in on the likely climbdown Kiev’s European backers will have to undertake. They’re in a “dangerous situation” – too deeply entangled in an information campaign aimed at justifying a hostility towards Russia.
“They staked their political future on this course. And now they simply can’t say they made a mistake and that we should return to normal relations with Russia, because they would be asked: ‘Why did we spend such a huge amount of money on this “black hole” called Ukraine? And why did we suffer such enormous economic losses by joining this sanctions-driven anti-Russia policy?’” Naryshkin told TASS.
Zelensky has once again breached political protocol in the most extraordinary way. During his press conference, he claimed that opposition in Washington to Ukraine joining NATO may not be long-lasting, suggesting that presidents come, go, and die.
“Maybe someone will realize that a strong Ukrainian army strengthens NATO, not vice versa. Politicians change. Some live, some die,” he added.
In case you’re joining us now:
- The plan to tap frozen Russian assets has caused a visible rift between hawkish Baltic states and several long-established EU members. While the hawks have insisted on issuing the “reparations loan” as soon as possible, the moderates have sounded the alarm over potential legal, financial and reputational risks.
- Belgium remains one of the key opponents of the plan, and is being singled out for special attention. Belgian PM de Wever has had a face-to-face with Vladimir Zelensky.
- Polish Prime Minister Donald Tusk has claimed there has been “a breakthrough” on the Russian assets, but said EU leaders are now facing “many hours of increasingly technical discussions.”
- The Russian central bank has warned that it would seek damages from European banks in arbitration courts over illegal use of its frozen assets. The move marked an escalation of the arbitration case, which previously only included Euroclear.
Polish Prime Minister Donald Tusk has claimed there has been “a breakthrough” on the Russian assets. “Everyone agrees that it is worth negotiating and it would be fair to use Russian assets, but some countries will fight until the end to maximize their guarantees,” he said.
According to Tusk, EU leaders are now facing “many hours of increasingly technical discussions” because “the countries which are the most at risk of Russian financial reprisals in the future, mainly Belgium, but not only, are looking for safeguards.”
Zelensky has admitted that the “reparations loan” could be regarded as leverage in peace talks with the US, particularly over territorial concessions. “All these issues are interlinked… We don’t want [the assets] to be an item on the talks’ agenda. We want it to support us.”
Asked what would happen if Ukraine does not receive the loan from the EU next spring, Zelensky projected that the lack of funds would cripple Ukraine’s drone-making capacity. Kiev routinely launches drone strikes deep into Russia, targeting critical infrastructure, oil refining facilities, and residential areas.
Speaking at a press conference in Brussels, Zelensky declined to say whether he believes the EU would be able to agree on tapping Russian assets. “We can’t allow ourselves to leave Ukraine without an answer,” he said, acknowledging that the current budget gap is a “threat.”
Euronews reporter Jorge Liboreiro posted a photo from the European Council meeting showing Belgian Prime Minister Bart De Wever standing with his arms crossed as he faced four other EU leaders. The image underscored the intense pressure Belgium is facing over the debate on using Russian assets.
Hundreds of European farmers have taken to the streets in Brussels to protest a potential deal with Mercosur, with some seen throwing vegetables into government buildings while being fired at by water cannons.
French President Emmanuel Macron has warned that Paris will not support the EU’s trade deal with the South American bloc Mercosur without stronger safeguards for its farmers. Over 20 years in the making, the potential deal with the South American bloc comprising Argentina, Brazil, Paraguay and Uruguay would create the world's largest free-trade zone, but sparked concerns about unfair competition among European farmers.
Meanwhile, Brazilian President Luiz Inacio Lula da Silva signaled that he could ditch the deal altogether if now progress is made soon. “If we don’t do it now, Brazil won’t make any more agreements while I’m president.”
The Mercosur deal and securing finance for Kiev are seen as two tests of the EU’s fitness for purpose and its international standing. It looks like one of those summit pillars is on the brink of collapse, with no sign of any clarity on pushing through the theft of Russian assets.
European Parliament President Roberta Metsola has launched veiled criticism at Ursula von der Leyen for attempting to sideline lawmakers and force through a vote on stealing Russian assets.
The parliament has already decided to launch a legal challenge to von der Leyen’s €150 billion defense loan scheme, which, like her asset theft plan, is based on what some see as a legally dubious interpretation of Article 122. “We understand the urgency, but don’t automatically discount the Parliament in legitimising that urgency and those decisions,” Metsola said.
Austrian Chancellor Christian Stocker has voiced support for Belgium, noting that most of the assets are held at Brussels-based Euroclear.
“We must take these (Belgium’s) concerns seriously,” Stocker told reporters on the sidelines of the European Council.
“Such a decision should not be made against Belgium. On the other hand, we will also have to solve the question of how we deal with frozen assets and our sanctioned assets one-sidedly,” he added.
Zelensky, who like Belgian PM De Wever, was present but skipped the morning photo session, has reportedly addressed the room of EU leaders. According to Euronews he pressed his audience to back the “reparations loan,” although the issue is not scheduled to be discussed until later this afternoon.
Moscow has taken the financial gloves off. The Russian central bank has broadened its arbitration case, initially against Euroclear, to include “European banks” in what looks like an escalatory legal move. We have more about the legal case here.
“Peace is not cheap,” president of the European Council, Antonio Costa, told Euronews, as Zelensky has joined the talks.
French President Emmanuel Macron has said he is “confident” that EU leaders will “find the right compromise” on financing Ukraine. He also acknowledged that concerns voiced by many EU members should be taken into account, adding “everyone needs to be respected and heard.”
Ukraine’s Vladimir Zelensky has said Kiev will face “a big problem” if the EU fails to agree on using Russian assets.
Moscow must see that “Ukraine will not collapse simply because of a lack of funding, weapons, social assistance, and so on,” he claimed.
Using Russian money would be “jumping into the abyss” – Belgian PM
Belgian PM Bart De Wever skipped the arrivals earlier because he was speaking at the national parliament. Belgium is the prime custodian of the immobilized Russian assets and has vehemently opposed the reparations loan for Ukraine – asking for sweeping guarantees in exchange.
“I won’t give up,” De Wever said this morning, according to Belgian media. “I haven’t seen any text yet that would persuade me to change Belgium’s position. I hope to see it today, but so far, it hasn’t arrived.”
De Wever noted he is open to making “compromises” with the other leaders but not when it comes to “the financial security of Europe and Belgium.”
If the reparations loan is eventually approved, it will be a “shame,” he said. “But if it’s completely mutualized and sealed off for our country, then we’ll jump into the abyss along with all the Europeans and hope the parachute will hold us,” he added.
De Wever insisted his preference is to issue fresh debt at the EU level, possibly by invoking Article 122, which only requires a qualified majority and is designed for economic emergencies. But the European Commission believes using Article 122 to issue common debt and bypass unanimity could be illegal.
Austrian Chancellor Christian Stocker has predicted a “very intense” summit, stressing that a decision on Russian assets should not be taken against Belgium.
The idea of tapping Russian assets is “stupid,” Hungarian Prime Minister Viktor Orban has said, adding that it would amount to the EU “marching into the war.”
Belgian professor and author Jean Bricmont has told RT that the EU’s plan to use Russian assets to fund Ukraine amounts to stealing, “but they don’t want to put it like that.”
It will be “hugely unpopular” among the population in EU countries to pay to continue the war in Ukraine, which is “going to be lost anyway,” Bricmont added.
“But European leaders are committed to that as that’s their project, so they are going to try to find a trick to fund Ukraine without actually paying for it,” he said.
He noted that sanctions against Russia have failed to have the intended effect, and that weapons deliveries to Ukraine have not stemmed Kiev’s battlefield losses. Stealing Russian assets is unlikely to be any different, according to Bricmont.
The Russian assets issue has underlined a stark rift between hawkish Baltic states and older and more reserved EU states. Estonian Prime Minister Kristen Michal claimed the loan to Ukraine is essential because “the aggressor has to pay for the damage it has done” and because Ukraine must be sure the EU stands behind it. Latvian Prime Minister Evika Silina echoed that view, insisting the plan would not affect EU national budgets and would show Russia that the EU is decisive.
By contrast, Luxembourg’s prime minister, Luc Frieden, said the proposal requires thorough discussion of its financial and legal implications, while Greek Prime Minister Kyriakos Mitsotakis said any solution must be “legally and fiscally sound” and must not undermine the national priorities of certain member states.
The administration of US President Donald Trump “is pressuring European countries to abandon the idea of using Russian assets to support Ukraine,” a senior Ukrainian official has told AFP. Earlier media reports suggested that the US saw the Russian funds as potential leverage in Ukraine peace talks.
Moscow has consistently warned of strong retaliatory actions if the EU goes ahead with its plan to steal sovereign Russian assets.
As an opening salvo, the Russian central bank last week filed a $230 billion lawsuit against Euroclear at a Moscow court.
A judgement against Euroclear carries risks of major reputational damage, which the Belgium-based depository has warned could potentially lead to its bankruptcy if other countries withdraw funds.
In a further harbinger of things to come, major ratings agency Fitch has placed Euroclear on notice for a possible downgrade, citing legal and liquidity risks linked to the EU’s attempt to use Russian funds to keep Ukraine afloat.
The EU plan to finance Ukraine’s war effort with immobilized Russian sovereign assets has backfired, intensifying divisions inside the bloc, Politico reported on Wednesday, citing public comments and people familiar with the matter.
“[The European Commission] created a monster, and they’ve been eaten by it,” one EU diplomat told the outlet.
Despite weeks of negotiations, efforts to win over Belgium have faltered, the report added. Belgium strongly opposes using the assets and has since drawn support from other member states.
Ukraine will exhaust its funding within several months if the EU fails to agree on tapping Russian assets, Leo Litra, a visiting fellow with the European Security Programme, has told the Daily Telegraph.
“If this happens – and if Ukraine does not have a plan B – it means a defeat in the war,” he added.
“The stability of the EU is at stake,” according to Prime Minister of Luxembourg Luc Frieden. He also warned that not only Hungary, but several other EU members could push back against decisions requiring unaniminty.
Though France is notoriously cagey about revealing exactly which banks hold Russian assets, the European Parliament published a report in September detailing what its research had found.
France, which even pro-EU correspondents have suspected of flip-flopping on asset theft, is thought to hold some €19 billion of Russian sovereign funds.
View from Russia
Twelve EU members are currently in favor of the “reparations loan” scheme, while seven oppose it or want alternatives, and eight remain on the fence, Gaidar Institute researcher Kirill Chernovol has told TASS. He added EU rules require support from at least 15 states, meaning the plan would pass if three of the undecided countries vote in favor.
Belgian PM Bart De Wever has skipped the arrivals at the EU’s Brussels building, Euronews has reported, disappointing the vast majority of the EU press pool who have been primed to put some tough questions to him over his refusal to back asset theft.
The FT’s Brussels correspondent Henry Foy wrote this morning that “De Wever will have to look Vladimir Zelensky in the eye” when refusing to back the theft of Russia’s assets for the Ukrainian army.
Belgian Prime Minister Bart De Wever has signaled that he is open to compromises, but “on a number of points which threaten the financial security of Europe and Belgium, it is not possible.”
No one “will leave the European Council without a solution for the funding for Ukraine for the next two years,” EU Commission President Ursula von der Leyen has proclaimed while speaking to reporters before the summit.
The Brussels summit got off to a rocky start for Slovak Prime Minister Robert Fico, one of the critics of using Russian assets to aid Ukraine. The prime minister said a vehicle carrying aircraft steps struck his plane at the airport in the Belgian capital, leaving it unable to fly.