The European Union agreed on Friday to indefinitely freeze Russian central bank assets held in Europe, removing a major procedural hurdle to using the funds to support Ukraine’s defence against Russia.
EU governments immobilised the assets after Moscow’s 2022 invasion of Ukraine, viewing the conflict as a direct threat to European security. Until now, the freeze had to be renewed every six months. Under the new arrangement, €210 billion ($246 billion) in Russian sovereign assets will remain frozen for as long as necessary, eliminating the risk that Hungary or Slovakia—both of which maintain closer ties with Moscow—could block future extensions.
Plan to Back Major Loan for Ukraine
The move is designed in part to secure Belgium’s backing for an EU proposal to leverage the frozen assets to provide Ukraine with a loan of up to €165 billion for its military and civilian budget needs in 2026 and 2027.
Under the plan, Ukraine would only repay the loan once Russia pays war damages to Kyiv, effectively making the package an advance on future reparations.
EU leaders are expected to finalise the details at a European Council meeting on December 18. Outstanding issues include Belgium’s demand for guarantees from all member states to ensure it is not left financially exposed if Russia successfully challenges the asset freeze in court.
Ahead of the summit, Ukrainian President Volodymyr Zelenskiy will travel to Berlin on Monday for talks with German Chancellor Friedrich Merz, joined later by other European, EU and NATO leaders.
Ukrainian Prime Minister Yulia Svyrydenko welcomed the EU decision, calling it on X a “landmark step toward justice and accountability” that strengthens the foundation for the reparations loan mechanism.
Germany considers the loan essential and is prepared to provide €50 billion in guarantees, according to European diplomatic sources.
Danish Finance Minister Stephanie Lose, whose country holds the rotating EU presidency, said some concerns still needed to be resolved but expressed hope that leaders could reach agreement next week. European Commissioner for Economy Valdis Dombrovskis said work was underway to provide Belgium with “solid guarantees.”
Russia Condemns Move, Launches Legal Action
Hungarian Prime Minister Viktor Orbán criticised the decision, saying on Facebook that approving the indefinite freeze through a qualified majority vote—requiring 15 of 27 member states representing 65% of the EU population—would cause “irreparable damage” to the bloc. He vowed to work to “restore a lawful state of affairs.”
Russia’s central bank denounced the EU’s plans as illegal and said it reserved the right to use all available means to defend its interests. It also announced it is suing Euroclear, the Brussels-based securities depository that holds €185 billion of the frozen assets, in a Moscow court. Euroclear has faced multiple Russian lawsuits since the EU imposed the freeze in 2022.
EU Accession Timeline Questioned
Separately, the Financial Times reported that Ukraine could join the EU as early as January 1, 2027 under proposals being discussed in U.S.-mediated talks on ending the war. However, EU diplomats expressed strong scepticism, noting that accession negotiations typically take many years.
One European diplomat said achieving membership by 2027 would be “extremely difficult,” while several others described the suggested timeline as “absolutely impossible.”
