Published by Global Banking and Finance Review
Posted on December 16, 2025
By Jan Strupczewski and Andrew Gray
BRUSSELS, Dec 16 (Reuters) - The European Union is making progress on how to finance Ukraine with frozen Russian assets, EU diplomats said, but some key decisions including on guarantees for Belgium, where most of the assets are held, will only be made at an EU summit on Thursday.
The EU wants to keep Ukraine financed and fighting because it sees Russia's war as a threat to its own security. To do so, EU states aim to put to work some of the Russian sovereign assets they immobilised after Moscow's 2022 invasion of Ukraine.
There are some 210 billion euros of such assets in the EU, of which 185 billion are in Belgium, 18 billion in France, and smaller amounts in Luxembourg, Germany and Sweden.
The original plan to use the Russian cash for Ukraine in 2026 and 2027 involved only the Belgian central securities depository Euroclear, where they are held.
Belgium said it would only agree to the plan if other EU countries which hold Russian assets also take part. The ambassadors of EU governments resolved this issue at talks on Monday, diplomats said.
A senior German diplomat told Reuters it was "encouraging" that there was now no chance of countries opposed to the plan forming a blocking minority.
"I'm a bit more optimistic after that debate than I was yesterday," the diplomat said.
Moscow has repeatedly warned the EU that using its sovereign reserves amounts to theft and has vowed harsh retaliation, including seizing European private investors’ holdings in Russia. Russia's Central Bank has already filed a lawsuit in Moscow seeking $230 billion in damages from Euroclear.
BLANK CHECK GUARANTEES FOR BELGIUM
The main problem still to be resolved by EU leaders on Thursday is Belgium's demand that others in the 27-nation bloc share the financial risks if Russia were to successfully sue either Belgium or Euroclear in international courts.
"(Belgian Prime Minister Bart) de Waver effectively wants a blank check for forever from other EU governments for all financial consequences that can befall Belgium for releasing the Russian assets," a third EU diplomat said.
"Other EU governments are willing to go quite a long way to accommodate Belgium, but obviously there is some resistance to the idea of a blank check forever," that diplomat added.
Other sticking points, which the EU ambassadors will try to resolve at meetings this week include bilateral investment treaties with Russia that 18 EU countries still have and which the European Commission wants them to rescind.
Withdrawing from the bilateral treaties is important because Russia uses them through the Investor-State Dispute Settlement (ISDS) to challenge EU sanctions. This allows Russian oligarchs and entities to sue EU countries and they could also be used by to challenge the use of Russian sovereign assets for Ukraine.
A further obstacle is France's demand that Ukraine use the money it gets from the EU under the reparations loan to buy defence equipment only from Europe and not from other suppliers such as the United States.
The Reparations Loan is the preferred option for most EU countries to keep Ukraine fighting because it does not involve immediately spending large amounts of their own money or new joint borrowing.
Ukraine's President Volodymyr Zelenskyy called on Tuesday for European unity on the frozen assets.
"I do not see an opportunity to stand strong without this support," Zelenskiy told reporters in The Hague, where European leaders earlier launched an International Claims Commission to help ensure Kyiv is compensated for hundreds of billions of dollars in damage from Russian attacks and alleged war crimes.
(Additional reporting by Anthony Deutsch and Yuliia Dysa in The HagueEditing by Gareth Jones)
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