What's happened
As of December 17, 2025, the EU remains deadlocked over a €90 billion 'reparations loan' to fund Ukraine's 2026-27 budget using frozen Russian assets, mostly held in Belgium's Euroclear. Belgium opposes the plan, fearing legal and financial risks, demanding guarantees from other EU states. The European Commission insists the plan is vital for Ukraine's defense and peace leverage, while Russia condemns it as theft and threatens retaliation.
What's behind the headline?
EU Unity Tested by Reparations Loan
The EU's plan to fund Ukraine's war effort by leveraging frozen Russian assets exposes deep fractures within the bloc. Belgium's refusal to back the scheme, citing potential legal liabilities and fears of Russian retaliation, threatens to derail a critical financial lifeline for Kyiv. This opposition is not isolated; Italy, Malta, Bulgaria, and Czechia have aligned with Belgium, complicating consensus.
The Stakes Behind the Standoff
Belgium's concerns are rooted in the concentration of assets within Euroclear, a Brussels-based financial depository. The risk of Russia successfully suing Belgium or Euroclear could lead to massive financial repercussions, potentially bankrupting Belgium. The Commission's proposal to spread risk across EU member states has not assuaged these fears.
Political and Strategic Implications
Germany and northern European countries, which have shouldered much of Ukraine's support, view the reparations loan as the only viable collective European response. The alternative—individual countries funding Ukraine independently—risks fracturing EU solidarity and undermining future cooperation.
Legal and Diplomatic Complexities
The EU plans to invoke emergency powers to bypass vetoes from pro-Russian member states like Hungary and Slovakia, but unanimity remains a political hurdle. Russia's vehement condemnation, labeling the plan as theft and threatening legal and retaliatory measures, adds pressure.
Forecast
Without a compromise, the EU risks failing to secure essential funding for Ukraine, weakening Kyiv's position in ongoing peace negotiations. The December 18 summit is pivotal; failure to act may force reliance on costly market borrowing or fragmented national efforts, undermining EU cohesion and Ukraine's defense.
Impact on Readers
While the direct financial mechanisms may seem remote, the outcome affects European security and geopolitical stability, with potential repercussions on energy markets, migration, and regional peace. The story underscores the challenges of collective action in a diverse union facing external threats.
What the papers say
Politico's Bjarke Smith-Meyer highlights Belgium's firm stance, quoting Prime Minister Bart De Wever: "We are not going to put risks involving hundreds of billions... on Belgian shoulders. Not today, not tomorrow, never." The Commission President Ursula von der Leyen counters, asserting that "mechanisms protect all our member states," emphasizing risk-sharing and inclusion of assets beyond Belgium (Politico, Dec 3). The Moscow Times reports Russia's official warning that "any operation with sovereign Russian assets without Russia's consent constitutes theft," with Sergei Nechaev cautioning about "far-reaching consequences" for the EU's financial reputation (The Moscow Times, Dec 6). Al Jazeera explains the EU's dual approach: a reparations loan backed by frozen assets or fallback borrowing, noting Belgium's legal concerns and the Commission's insistence on solidarity (Al Jazeera, Dec 4). Reuters details the complex negotiations, including fears of Russian retaliation and the political obstacles posed by Hungary's opposition (Reuters, Dec 4). The Independent provides context on Russia's aggressive rhetoric, with Dmitry Medvedev calling the plan a "casus belli," and Belgium's demand for legally binding guarantees to avoid bankruptcy (The Independent, Dec 5). These sources collectively illustrate the high-stakes diplomatic chess game unfolding ahead of the EU summit, with divergent national interests and geopolitical pressures shaping the debate.
How we got here
Following Russia's 2022 invasion of Ukraine, the EU froze over €210 billion in Russian assets, mainly held in Belgium's Euroclear. The European Commission proposed using these assets as collateral for a €90 billion loan to Ukraine, repayable only if Russia pays reparations. Belgium fears legal and financial exposure if Russia challenges the plan, demanding shared guarantees from EU states.
Go deeper
- Why is Belgium opposing the use of frozen Russian assets?
- What legal risks does Belgium fear from the reparations loan plan?
- How might this deadlock affect Ukraine's funding and the EU's unity?
Common question
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Why is Belgium warning against using Russian assets for Ukraine?
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Why is Belgium Opposing the Use of Russian Assets for Ukraine?
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Why Is the EU's Plan to Use Frozen Russian Assets to Fund Ukraine Stalled?
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What is the EU's plan to use Russian assets to fund Ukraine?
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Why is the EU deadlocked over the Russian asset reparations loan?
The European Union is currently facing a major deadlock over a proposed €90 billion loan to fund Ukraine's 2026-27 budget using frozen Russian assets. Belgium and some other EU countries oppose the plan due to legal and financial risks, while the European Commission pushes for its strategic importance. This dispute raises questions about legal risks, political unity, and Russia's reactions. Below, we explore the key issues behind this complex situation.
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Why is the EU deadlocked over Russian assets for Ukraine?
The European Union is currently facing a complex standoff over how to use frozen Russian assets to fund Ukraine's future. While some member states push for a reparations loan backed by these assets, others like Belgium fear legal and financial risks. This deadlock raises questions about international law, potential retaliation from Russia, and what this means for Ukraine's budget plans. Below, we explore the key issues and what they could mean for the future of EU-Ukraine relations.
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Belgium, officially the Kingdom of Belgium, is a country in Western Europe. It is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to the southwest, and the North Sea to the northwest.
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The European Union is a political and economic union of 27 member states that are located primarily in Europe. Its members have a combined area of 4,233,255.3 km² and an estimated total population of about 447 million.
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Ursula Gertrud von der Leyen is a German politician and the president of the European Commission since 1 December 2019. She served in the federal government of Germany from 2005 to 2019 as the longest-serving member of Angela Merkel's cabinet.
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Ukraine is a country in Eastern Europe. It is the second-largest European country after Russia, which borders it to the east and northeast.
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Bart Albert Liliane De Wever is a Belgian politician. Since 2004 De Wever has been the leader of the New Flemish Alliance, a Belgian political party advocating independence for the Flemish region of Belgium within the European Union; he is also a member o
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Russia, or the Russian Federation, is a transcontinental country located in Eastern Europe and Northern Asia. Covering an area of 17,125,200 square kilometres, it is the largest country in the world by area, spanning more than one-eighth of the Earth's in
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Euroclear, or the Euroclear Group, is a Belgium-based financial market infrastructure group that specialises in the central securities depository segment.
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The European Commission is the executive branch of the European Union, responsible for proposing legislation, implementing decisions, upholding the EU treaties and managing the day-to-day business of the EU.
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Vladimir Vladimirovich Putin is a Russian politician and former intelligence officer who has served as President of Russia since 2012, previously holding the position from 1999 until 2008.
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Dmitry Anatolyevich Medvedev is a Russian politician who has served as prime minister of Russia between 2012 and 2020. From 2008 to 2012, Medvedev served as president of Russia.
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Friedrich Merz is a German lawyer and politician. A member of the Christian Democratic Union, he served as a Member of the European Parliament from 1989 to 1994 and was elected to the Bundestag from 1994 until 2009, where he chaired the CDU/CSU parliament
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