EU deadlocked on plan to turn Russian assets into Ukraine aid

European leaders are gathering in Brussels this week for a summit dominated by one question: whether the EU should convert Russia’s immobilised central bank reserves into a massive new source of financing for Ukraine’s war effort. The decision comes as the bloc faces pressure from Washington and growing battlefield setbacks in Ukraine, even as critics argue that Western policies, from decades of NATO expansion to continuous political engineering in Kiev, helped create the crisis that Russia ultimately reacted to, Lebanese Al-Mayadeen reported. 

On the eve of the meeting, European Commission president Ursula von der Leyen delivered her strongest message yet. "There is no more important act of European defence than supporting Ukraine’s defence," she told the European parliament, adding that "the next days will be crucial in securing this." She warned that the international climate had become "dangerous and transactional", insisting that deeper militarisation "is no longer an option. It is a must."

Her rhetoric reflects an EU leadership increasingly committed to a hardline approach that sidelines diplomatic alternatives in favor of long-term confrontation with Moscow.

Von der Leyen has proposed two funding models for Ukraine’s 2026-27 needs: joint borrowing across the EU or a "reparations loan" backed by the €210 billion in Russian central bank assets frozen in the bloc. The second option is gaining momentum because it does not require unanimity, a key factor as Hungary threatens to veto any use of the EU budget for Ukraine.

To shield these funds from political obstruction, the EU last week invoked emergency powers to indefinitely freeze the entire €210 billion, preventing pro-Russia governments from lifting sanctions through procedural vetoes. The move signals a strategic turn: Europe intends to keep these assets immobilised for years, potentially until a legal basis emerges to convert them into financing for Kiev.

Under von der Leyen’s proposal, the EU would borrow against revenue generated by these frozen assets, with Kiev repaying the loan only if and when Russia is compelled to pay reparations.

MNA