Amid deep divisions between member states, European Union (EU) leaders are meeting in Brussels to decide on a controversial proposal to use some $250 billion in frozen Russian assets to support Ukraine’s war effort against Russia.
The vote will focus on whether the EU can use some 210 billion euros ($246 billion) of frozen Russian central bank assets as the basis for loans to Kiev over the next two years, which the Kremlin has rejected and which will ultimately be repaid by the Kremlin as part of planned war reparations.
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The proposal comes as U.S. financial aid to Ukraine has dried up under President Donald Trump’s administration and the EU’s national budget is already under strain.
Without additional EU funding, Ukraine could run out of funds by next April, a scenario EU officials fear could lead to military defeat, increase the risk of Russian influence in Europe and spill over the conflict beyond Europe’s borders.
Ukrainian President Volodymyr Zelensky warned that the failure to fund Kiev would embolden Russia and increase the risk of a new war involving European territory.
This comes after the European Commission submitted a back-up plan for the EU to raise its own funds for the loan to Ukraine, but that option has been shelved for now due to opposition from Hungarian Prime Minister Viktor Orbán, who is expected to vote against the idea, which would require unanimous approval from the 27 member states.
Belgium hesitates
Analysts say the use of frozen Russian assets is now virtually the only viable option to fund Ukraine’s war effort, but German Chancellor Friedrich Merz said the chances of a deal remain “50-50.”
This proposal would be unprecedented. Analysts point out that even during World War II, no German state assets were seized.
Belgian Prime Minister Bart de Wever told parliament on Thursday that he remained deeply concerned about the legal and financial risks, having previously opposed the measure over concerns that Belgium could be forced to pay compensation to Russia if a court later ruled that the use of frozen assets was illegal.
Belgium is demanding binding commitments from other EU member states to cover any potential liabilities and wants guarantees that Russian assets held outside Belgium will also be used.
The bulk of Russia’s frozen assets in Europe, about $185 billion, are held by the Brussels-based financial services company Euroclear.
Some countries, including Germany and the Netherlands, have said they are willing to provide loan support, but others, including Italy and Bulgaria, remain hesitant.
The plan requires only a qualified majority, not unanimity, but EU officials hope to secure Belgian support. Given Brussels’ role as the EU’s institutional center, it would be politically damaging for Belgium to vote against the proposal.
Risk of hostility with Russia
Russia’s central bank said Thursday it will sue European banks in Russian courts over their attempts to use frozen Russian assets to finance Ukraine.
Chris Wiefer, CEO of consultancy Macro Advisory, told Al Jazeera that the Russian government would likely see the move as the start of a financial war with the EU.
“Moscow is now drawing the line on this issue,” Wiefer said, adding that Russia was likely to “retaliate based on European actions.”
Wiefer said Russia’s central bank has already started legal action against Euroclear, which holds most of the frozen assets, as well as institutions in France, Austria and the United Kingdom.
He added that the EU is unlikely to move forward without Belgium’s support, with many EU countries unwilling or financially unable to continue providing direct funding to Ukraine.
“The EU is therefore desperately looking for alternative sources of funding,” Wiefer said.
Attacks continue on the front lines
Inside Ukraine, Russian forces carried out attacks in several regions, injuring dozens of people in Krivy Rief, Zaporizhzhya, Cherkasy and Odessa regions, among others.
In Russia, three people were killed, including two crew members of a cargo ship, in a Ukrainian drone attack on the port of Rostov-on-Don and the nearby city of Bataysk, the regional governor announced.
Governor Vadim Filashkin said Russia shelled Ukraine’s Donetsk region 18 times, killing three residents.
Ukraine’s acting energy minister, Artem Nekrasov, said overnight Russian attacks cut off power supplies in five regions, affecting about 180,000 people.
A 72-year-old woman was killed and six others injured in Ukrainian shelling in Russian-occupied Kherson, regional governor Volodymyr Sardo said.
Intense ground and air combat continues across eastern Ukraine, including around Kupiansk, Ryman and Sloviansk.
Ukraine said it had shot down 330 drones in what was described as a major Russian air raid, while Russia said its air defenses intercepted 47 Ukrainian drones overnight.
