EU Leaders Pressured to Address Stalled Russian Asset Situation

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European Union leaders are trying to overcome differences on plans to use frozen Russian ‍assets to finance Ukraine’s war effort at a summit seen as a critical test of the bloc’s strength.

Talks in Brussels on Thursday focused on reassuring Belgium — which holds most of these frozen assets — and several other concerned countries that Europe would share the legal and financial risks, in a bid to secure their backing for the plan.

“Now we have a simple choice — either money today or blood tomorrow,” Polish ⁠Prime Minister Donald Tusk said, urging fellow EU leaders to agree to the proposal.

“All European leaders have to finally rise to this occasion.”

The European Union perceives Russia’s aggressive actions as a direct threat to its own security, prompting a strong desire to ensure Ukraine remains well-supported and actively engaged in its defense efforts.

With public finances across the EU already strained by high debt levels, the European Commission has proposed using frozen Russian central bank assets, mostly held in the Belgian clearing house Euroclear, to secure a substantial loan to Ukraine.

However, Belgium is deeply concerned about being left exposed to legal and financial risks, and other states, including Italy, have also expressed concerns.

“The proposal currently under consideration—to fully utilize Russian assets in response to Russian aggression—stands out as one of the most straightforward and morally justified decisions we could make,” Tusk stated.

“We just ‍can’t afford to fail,” EU foreign policy chief Kaja Kallas said, adding that leaders would stay at the summit as long as needed to find a solution.

Meanwhile, Russia’s central bank has contested the EU’s plans, labeling them as illegal. In response, it has initiated a lawsuit in Moscow, seeking damages of $230 billion (approximately $348 billion) from the clearing house Euroclear.

‘Morally justified’

Ukrainian President Volodymyr Zelenskyy, who took part in the summit, urged the bloc to agree on a deal he said would allow Ukraine to keep fighting.

“The decision now on the table — the decision to fully use Russian assets to defend against Russian aggression — is one of the clearest and most morally justified decisions that could ever be made,” he said.

“If this decision isn’t made now, the Russians — and not only them — will feel ‌that Europe can be defeated.”

Belgian Prime Minister Bart De Wever told his country’s parliament early on Thursday he had not yet seen guarantees that addressed his concerns about legal and liquidity risks, and that financing plans were still changing “as we speak”.

Russia’s central bank has said the EU’s plans to use its assets are illegal. It filed a lawsuit in Moscow this week seeking US$230 billion ($348 billion) in damages from ‍clearing house Euroclear.

The stakes are high because, without the EU’s financial help, Ukraine will run out of money in the second quarter of next year and most likely lose the war to Russia, which the EU fears would bring closer the threat of Russian aggression against the bloc.

Kallas put the chances of a deal on the assets at 50/50. German Chancellor Friedrich Merz said: “My impression is that we can come to an agreement.”

The latest draft version of the summit conclusions, which is not yet agreed and could still change substantially, proposes that the leaders take the political decision of going ahead with the reparation loan, and task officials with “urgently” sorting out the details.