European Union leaders are set to decide on Thursday how to finance Ukraine’s war effort in 2026 and 2027, with the use of frozen Russian central bank assets emerging as the preferred option. About 210 billion euros of Russian assets are immobilised in the EU, most of them held in Belgium through the clearing house Euroclear.
The push comes as U.S. financial support for Kyiv has sharply declined under President Donald Trump’s administration, while EU national budgets are already under strain. EU officials say Ukraine would run out of money by the second quarter of next year without fresh European funding.
Why It Matters
EU leaders see Russia’s invasion of Ukraine as a direct threat to Europe’s own security. Diplomats warn that without sustained financing, Ukraine could lose the war, potentially bringing Russian military pressure closer to EU borders.
The decision also carries political weight. European leaders are keen to demonstrate unity and resolve after Trump last week described European countries as “weak”, and to show that Europe can act independently to support Ukraine.
Financing Options on the Table
One option would be for the EU to jointly borrow against the EU budget and lend the funds to Ukraine, but this would require unanimous approval from all 27 member states. Hungary has already said it would veto such a move.
Another option would involve individual EU countries raising funds themselves and passing them on to Kyiv. Diplomats say this would increase national debt levels and fail to provide Ukraine with long-term financing certainty.
As a result, diplomats describe the use of frozen Russian assets as “the only game in town”, as it would provide substantial funding without raising national debt or requiring immediate fiscal sacrifices.
Belgium’s Central Role
Belgium holds around 185 billion euros of the frozen Russian assets, making its approval essential. Brussels wants guarantees that it would not be left liable if Russia successfully sues in international courts over the use of the funds.
Belgian Prime Minister Bart de Wever has argued that potential damages could far exceed the amount held in Belgium and could arise years in the future, effectively requiring open-ended guarantees from other EU states.
Other EU governments say such unlimited guarantees are politically impossible, as no government could secure parliamentary approval for indefinite financial commitments.
Stakeholders
Key stakeholders include Ukraine, which relies on the funds to sustain its war effort; Belgium, which faces legal and financial exposure; EU member states balancing security concerns with domestic fiscal pressures; and Russia, which could challenge the plan in court.
The United States also looms large in the background, as reduced U.S. support has increased pressure on Europe to act.
What’s Next
Talks among EU leaders are expected to focus on narrowing the scope of guarantees to a form acceptable to Belgium while remaining politically viable for other member states. Diplomats say leaders are determined to reach a deal.
“This is not a European Council where we can walk away without a solution,” one senior EU diplomat said, adding that an agreement is expected to be in place by Friday morning.
With information from Reuters.
