European Leaders Confront the Decision to Utilize Russian Frozen Assets for Ukraine
European Union leaders are set to meet on Thursday for a discussion that will reveal whether they can tackle several significant challenges directly: an assertive Russia, a progressively adversarial United States, and a costly military conflict in Ukraine. Officials are optimistic that by the conclusion of the European Council meeting beginning Thursday morning in Brussels, the 27 EU member countries will reach a consensus to leverage frozen Russian governmental assets in Europe to provide a substantial loan to support Ukraine and its military operations in 2026 and 2027. However, this agreement is anticipated to be contentious and may not materialize. Belgium, where most of the 210 billion euros (approximately $247 billion) in frozen assets are held, has expressed strong opposition to the proposal for months, outlining several conditions. The country seeks assurances from other European states to accept potential legal liabilities if Russia decides to retaliate. Additionally, it calls for other nations with smaller amounts of frozen assets to contribute those funds for loans. Following Russia’s invasion of Ukraine in 2022, Russian state funds were also immobilized in Britain and France, along with other locations. Over the past few days, EU officials, ambassadors, and leaders from the bloc have been meeting intensely to identify viable compromises. However, leading up to the gathering, it was uncertain whether those efforts would prove sufficient. While many commentators suggested Belgium might ultimately relent at the last moment — partly to prolong the situation for political gains domestically — leaders lacked a clear strategy should this not occur. ‘Europe’s Independence Moment’ Officials have indicated that the European Council meeting, which convenes heads of state and government from across Europe, will continue until a decision concerning funding for Ukraine is made. Speculation already suggests it might extend for several days; some officials even mentioned it could last until Christmas. There is another option available if the frozen asset loan proposal does not succeed — a loan backed by the EU’s own budget. Nonetheless, achieving that would necessitate unanimous agreement. Hungary, which has maintained amicable relations with the Kremlin, has expressed its opposition, rendering that approach less plausible, and it has not been the focal point of discussions for weeks. The implications of securing some agreement to direct financial resources to Ukraine are immense. Peace talks involving Ukraine, the United States, and Russia have gained significant momentum, and a well-structured funding strategy could enhance Kyiv’s position in negotiations. Allocating funds could also reaffirm Europe’s significance at a time when it has struggled to demonstrate its ability to act decisively and assertively in discussions regarding the continent’s future. The United States has been clear that Europe must take financial responsibility when it comes to supporting the beleaguered nation. Ursula von der Leyen, the president of the European Union’s executive body, informed lawmakers on Wednesday that this week’s summit is an opportunity to demonstrate that Europe is prioritizing its strategic interests. “This is Europe’s independence moment,” she remarked. Analysts caution that a setback at this critical juncture would signify that the European Union — inherently cumbersome and consensus-driven — is failing to respond adequately in a situation demanding prompt and decisive action. Down to the Wire? The risk lies in the possibility that this week’s hectic behind-the-scenes negotiations might not be sufficient to persuade Belgium to endorse the frozen asset initiative. Member states consented on Friday to indefinitely immobilize Russian assets held within the bloc, marking a preliminary step toward facilitating a loan to Ukraine supported by those funds. However, Belgium, Bulgaria, Italy, and Malta did so reluctantly. They urged the bloc to keep exploring alternative options that entail fewer risks. Belgium has several concerns regarding the proposed plan. About €185 billion of the €210 billion total frozen in the European Union resides with the Brussels-based financial firm Euroclear. If adopted, this scheme would utilize that amount to secure a €90 billion loan, distributed over 2026 and 2027, with the potential for additional loans afterwards. Should Russia initiate legal proceedings due to the usage of its funds in this manner, Belgium fears it may be held accountable. Last Friday, the Russian Central Bank announced it had filed a lawsuit in Moscow against Euroclear, serving as a warning to European officials should they pursue the plan. Belgian officials are concerned that utilizing frozen assets could alarm international investors, potentially leading to perceptions that their funds are at risk if they are stored in Europe. Some analysts believe Belgium might reconsider its stance just before the deadline. “A deal will be struck, likely not until the very last minute,” stated Jacob Funk Kirkegaard, a senior fellow at the economic think tank Bruegel in Brussels. If Belgium remains firmly against the proposal, the frozen asset loan scheme could still technically be approved. It only requires a significant majority of EU votes to reach completion. However, European leaders have been hesitant to forcibly push it through despite objections from Belgium. Ukraine’s Money Woes Nevertheless, experts and officials assert that failing to devise a funding solution for Ukraine this week is not a viable option. EU officials predict that Ukraine will begin running low on funds by the end of March. Considering the time needed to finalize arrangements, a resolution is urgently required. The transatlantic context also heightens the necessity for action. The Biden administration and Russia have often excluded Europe from the discussions regarding Ukraine’s future, in part because the Trump administration views the bloc as weak and sluggish. The Trump administration recently made its negative perceptions of the European Union unmistakable. The administration highlighted in a national security strategy that Europe is facing “civilizational erasure,” accusing the bloc and other transnational organizations of “compromising political liberty” and national sovereignty, enabling unchecked immigration, and placing the continent on a trajectory that could render it “unrecognizable in 20 years or less.” EU leaders aim to counter these assertions by demonstrating their capability to respond decisively. “It’s a break or take week,” Kaja Kallas, the European Union’s chief diplomat, told reporters outside a meeting in Brussels on Monday.
Published: 2025-12-18 13:43:00
source: www.nytimes.com
