Introduction
Ukrainian President Volodymyr Zelensky has delivered a stark message to European Union leaders, warning that Ukraine is running out of money and time. As EU officials meet in Brussels, a controversial proposal to use frozen Russian assets to fund Ukraine’s war effort and recovery has become a defining moment for Europe’s response to the conflict.
Ukraine Facing a Severe Funding Shortfall
Zelensky told EU leaders that Ukraine could face a €45–50 billion budget gap next year, threatening its ability to sustain military operations and economic stability. Without urgent financial support by spring, Kyiv may be forced to cut back on critical defence production, including drones that play a key role on the battlefield.
According to Ukrainian officials, the funds are essential whether the war continues or a peace process begins, arguing that the money would support either national defence or long-term reconstruction.
Frozen Russian Assets at the Center of the Debate
Around €210 billion in Russian state assets are currently frozen inside the EU, with the majority held by Belgium-based financial services firm Euroclear. Until now, the EU has only transferred interest earned on these funds to Ukraine, not the principal amount itself.
The European Commission has proposed using a large portion of these frozen assets to provide Ukraine with loans worth up to €90 billion over the next two years, covering much of Kyiv’s expected needs through 2027.
Legal, Political, and Moral Tensions Inside the EU
The proposal has divided EU member states. While leaders such as Germany’s chancellor argue that using the funds would send a clear signal to Moscow that continuing the war is futile, others remain cautious.
Belgium, Hungary, Slovakia, and several other countries have raised legal and financial concerns, warning that courts could eventually order the assets returned to Russia. Hungary’s Prime Minister Viktor Orbán has openly opposed further EU funding for Ukraine, making unanimous approval difficult.
EU officials insist there is a solid legal basis for the plan, but acknowledge the risks involved, especially for Belgium, which hosts the frozen funds.
Russia Pushes Back as Peace Talks Loom
Russia has strongly warned against the use of its frozen assets and has reportedly filed legal action to reclaim the money. President Vladimir Putin has dismissed European leaders with harsh rhetoric, while the Kremlin has rejected proposals for a European-led security force in Ukraine.
Meanwhile, the United States says peace talks may be closer than ever, with American, Russian, and Ukrainian officials expected to hold further discussions in the coming days.
A Pivotal Moment for Europe and Ukraine
EU leaders agree that the coming hours are critical. The decision they make could determine whether Ukraine maintains financial leverage in negotiations or faces mounting pressure on the battlefield.
As one European official put it, approving the loan would allow Ukraine to negotiate from strength rather than desperation—while failure could hand Moscow a strategic advantage.