European leaders are facing mounting pressure to decide whether Russia’s frozen assets should be used to finance Ukraine’s defence. This as Kyiv confronts battlefield setbacks and growing demands from the United States to accept territorial concessions. At a critical EU summit in Brussels, leaders debated how to unlock urgently needed funding. A decision as a stark choice between immediate financial support or long-term security risks for Europe itself.
The core dispute centers on two funding options proposed by the European Commission. Joint EU borrowing or a so-called “reparations loan” backed by Russia’s frozen sovereign assets, most of which are held in Belgium. Supporters include Germany’s chancellor Friedrich Merz. They argue that using up to €90bn of these assets could sustain Ukraine’s military for at least two more years and send a strong political signal to Moscow. Critics, led by Belgium and backed by Italy, warn that such a move carries serious legal and financial risks, including retaliation from Russia and exposure to costly lawsuits.
European Commission president Ursula von der Leyen underscored the urgency of the moment. She is insisting that supporting Ukraine’s defence is the most important act of European security in an increasingly “dangerous and transactional” world. However, divisions persist, particularly as Hungary has pledged to veto any plan involving the EU budget, complicating efforts to reach unanimity. While most member states favor the reparations loan as the only viable option, diplomats acknowledge that isolating Belgium would be politically unthinkable.
Reference
Rankin, J. (2025, December 18). EU leaders urged to use frozen Russian assets to fund Ukraine’s defence. The Guardian. https://www.theguardian.com/world/2025/dec/18/eu-frozen-russian-assets-fund-ukraine-defence?CMP=Share_AndroidApp_Other