The European Commission has renewed efforts to explore potential methods for using Russia’s frozen assets to support Ukraine amid ongoing budget negotiations within the European Union. These assets, valued at approximately €210 billion, primarily belong to the Russian central bank and are held in Western financial institutions. An earlier proposal to tap these funds was blocked by Belgium, which houses most of the frozen assets, due to concerns about insufficient risk protections against possible legal actions from Moscow.
Ukraine is facing a financial shortfall estimated at $27 billion for 2026, with expectations that this gap will grow in 2027. Though this figure has not yet been officially validated by the International Monetary Fund or other international donors, it underscores Kyiv’s increasing need for financial assistance more than four years after Russia’s full-scale invasion. The EU has committed a €90 billion loan package aimed at covering roughly two-thirds of Ukraine’s estimated needs over 2026 and 2027, with €12 billion disbursed so far. However, European officials acknowledge that additional funding will be necessary to sustain Ukraine’s defense efforts.
Sweden has been prominent in advocating for reopening the debate on utilizing the frozen Russian assets, highlighting that doing so could help bridge Ukraine’s funding gap without adding pressure on domestic budgets amid the EU’s 2028-2034 multi-year budget discussions. Despite this push, officials stress that consensus across all EU member states remains elusive.
Belgian authorities continue to maintain their position that any plan to use the immobilized funds must include a fully comprehensive and legally sound mechanism that addresses potential liabilities for both Euroclear—the Brussels-based central securities depository holding many of the assets—and the Belgian state itself. The legal dimension is significant, as Russia has initiated proceedings against Euroclear in a Russian court, which ordered it to pay roughly Rbs18.2 trillion (€200 billion) in damages related to the frozen assets. Although this Russian judgment is not recognized under EU law, there are concerns Russia may attempt to enforce it through jurisdictions sympathetic to Moscow, heightening legal risks for European institutions.
One proposed solution, supported by former German defense minister Annegret Kramp-Karrenbauer and Nathalie Loiseau, a lawmaker aligned with French President Emmanuel Macron, involves transferring Russian accounts held at Euroclear and other EU institutions into a separate EU-managed vehicle. This arrangement aims to move both the frozen assets and any accompanying liabilities, offering legal indemnity to Belgium and Euroclear. However, EU officials remain cautious and non-committal about specifics, emphasizing that any final arrangement will require unanimous political agreement among member states, including Belgium.
As the EU continues to weigh these options, the challenge remains balancing legal and political risks against the urgent financial needs of Ukraine as the conflict persists.