President Volodymyr Zelensky pressed EU leaders in Brussels on 18 December to agree a financing decision sourced from Russia’s immobilised sovereign assets, warning that without fresh funds by spring Ukraine would be forced to scale back drone production. He put next year’s funding gap at roughly $45–50bn.
Leaders are considering a European Commission plan for a “reparations loan” of about €90bn for 2026–2027, backed by cash balances linked to roughly €210bn in frozen Russian central bank assets. A draft seen by Reuters envisages first disbursements in the second quarter of 2026 and repayment only once Russia pays damages to Ukraine.
Until now the EU has used only the extraordinary revenues generated by these immobilised assets. On 21 May 2024, the Council adopted legal acts channelling 90% of net windfall profits to Ukraine via the European Peace Facility and 10% via EU programmes, with bi‑annual transfers.
Last week member states invoked Article 122 TFEU to prohibit any transfer of immobilised Central Bank of Russia assets back to Russia, shifting the legal basis from sanctions renewed by unanimity to a qualified‑majority emergency measure and placing the freeze on an indefinite footing.
Most of the Russian sovereign assets in the EU sit at the Brussels‑based depository Euroclear. Company disclosures show around €183bn at end‑2024 and about €193–195bn through 2025; EU institutions estimate roughly €210bn is immobilised across the bloc.
Belgium is the pivotal player. Prime Minister Bart De Wever wants EU‑wide risk‑sharing to shield Euroclear and the Belgian state from litigation and balance‑sheet risks. On 16 December, Fitch placed Euroclear on Rating Watch Negative citing legal and liquidity uncertainties tied to the plan; Euroclear chief executive Valérie Urbain has publicly warned against proceeding without stronger protections.
European Council President António Costa said leaders would not leave Brussels without a decision and stressed that any solution must provide full security for Belgium; EU High Representative Kaja Kallas and Poland’s Donald Tusk say broad political support exists, with technical guarantees still under negotiation.
Positions remain split elsewhere. Italy’s Giorgia Meloni has tied Rome’s support to a robust legal basis. Hungary opposes both further EU funding for Ukraine and any joint EU borrowing. Slovakia’s Robert Fico says he will not back a scheme that finances Ukrainian military expenditure.
Independent of the proposed loan, the EU windfall‑profits regime is already yielding funding for Ukraine. Commission and Council material indicate annual proceeds of roughly €2.5–3bn, with 90% channelled through the European Peace Facility and 10% via the EU budget.
If leaders proceed with a reparations loan, elements could rely on Article 122 and therefore be adopted by qualified majority. By contrast, joint EU borrowing using the EU budget as a guarantee would require unanimity. Under the double‑majority rule, qualified majority means at least 15 states representing 65% of the EU population.
External diplomacy is moving in parallel. The Kremlin says contacts with the United States are being prepared; reporting indicates a Miami meeting involving Kremlin envoy Kirill Dmitriev and U.S. envoys Jared Kushner and Steve Witkoff. EU leaders argue securing multi‑year finance strengthens Kyiv’s negotiating hand.
For financial institutions, the Commission’s draft conditions highlight respect for contractual rights and equal treatment across asset holders, and aim to link support to both Ukrainian and EU defence industries. Details on balance‑sheet safeguards for Euroclear are still being negotiated.