Initially, there was no alternative plan in sight. But circumstances forced a change of course.

Shortly after 9pm on a Thursday night, the leaders of the European Union’s 27 nations were handed a revised proposal. Spearheaded by Germany, this plan aimed to utilize Russia’s frozen assets to extend a €90 billion loan to Ukraine. However, the proposal’s intricacy proved daunting, even to those inclined to support it.

“It was doomed from the start,” remarked a high-ranking EU diplomat familiar with the talks. “The technicalities were too overwhelming for the leaders… it caught them off guard.”

That moment marked the collapse of prolonged diplomatic negotiations over harnessing Russian state assets to aid Ukraine. The elaborate maneuvers required to address Belgium’s legal apprehensions—given that it holds most of these assets—prompted once-supportive nations to reconsider their stance.

“Relying on those assets was always somewhat fantastical,” admitted an EU official engaged in the discussions. “Ultimately, it became too burdensome.”

Within the meeting, French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni expressed reservations. They were uneasy about securing approval from their national parliaments for the financial assurances Belgium sought to mitigate the risk of any potential loan repayment.

Two of the EU’s biggest beasts opposing the plan shifted the mood, officials said. “Meloni was the killer,” said an EU diplomat, adding that Macron was mostly silent.

After 17 hours of talks, leaders eventually agreed to instead borrow the €90bn for Kyiv on the capital markets against the EU budget.

“Common sense prevailed — we were able to secure the resources that are needed but to do so with a solution that has a solid basis from a legal and financial perspective,” Meloni told reporters after the summit. On the eve of the meeting, she had expressed concerns about the legal and financial implications for Italy of the Russian assets plan.

Macron said that the alternative “emerged as the most realistic and the most practical solution”.

The pivot marked a victory for Belgium and its maximalist stance. Belgian Prime Minister Bart De Wever had spent the weeks leading up to the summit refusing to countenance any use of the assets without “unlimited” guarantees for his country — a red line for most other member states.

As if to prove his point, Russian President Vladimir Putin on Wednesday said that European “swine” supporting Kyiv would be removed from power. He previously described any moves against the Russian assets as “theft”. The Russian central bank has already filed a lawsuit against Euroclear, the central securities depository in Brussels, where they are being held.

As the formal summit tackled the EU’s shared budget, enlargement and the Middle East, a visibly distracted De Wever and other leaders traipsed in and out of the room for bilateral talks and informal huddles. De Wever sat down with Ukraine’s President Volodymyr Zelenskyy, who pleaded with him to agree to use the assets.

“The summit was the sideshow,” said a person present for the talks. “The real action was going on outside the big room.”

But De Wever ultimately did not need to move. When the scale of his legal and financial reassurances was presented to the other 26 leaders, they killed the plan for him.

“It was clearly just too complicated,” said German Chancellor Friedrich Merz, who had initially floated the reparations loan idea in an opinion article in the Financial Times in September.

An alternative proposal, championed by Belgium and its backers, was quickly put forward. Two days previously, Hungary had signalled to the European Commission that while it was opposed to joint debt for Ukraine, it could agree to borrowing against the budget if Budapest was exempt from repaying it, two officials told the FT.

That offered the other leaders a far simpler solution to the reparations loan. At about 1.30am on Friday, a single page of text was presented to them: the EU would borrow the money on the capital markets against its shared budget.

The feared prospect of a veto by Russia-friendly countries Hungary, Slovakia and the Czech Republic was avoided by granting them an exemption from any repayment obligations.

Just an hour of discussion was needed before the leaders unanimously agreed on plan B. In a small concession to Merz, they agreed to “continue working” on the possibility of linking the Russian assets to the loan should Moscow refuse to pay reparations.

“We have found a way to build a bridge between the two models,” said Denmark’s Prime Minister Mette Frederiksen. “I preferred the one before we started the meeting, but I think the other is quite good.”

De Wever, a Flemish nationalist who united his country behind his uncompromising stance, has emerged as an unlikely winner, having turned the tables on Merz over his reluctance to back more EU debt for Ukraine.

“Politics is not a softball game, it’s hardball,” De Wever told journalists after the summit. “And if there are big interests at stake, it can clash.”

He also won sympathy from several smaller member states, EU diplomats said. Commission president Ursula von der Leyen had for weeks teamed up with her fellow German officials to push the reparations loan proposal, irking many capitals.

“Small member states don’t like this ganging up — they know it could be them next,” said one diplomat.

Additional reporting by Andy Bounds in Brussels and Amy Kazmin in Rome