EU’s plan to steal Russian assets for Ukraine fails

The EU’s plan to steal Russian assets held in the bloc in order to fund Ukraine’s military and prolong its disastrous war has failed to get the backing of bloc leaders. The other key EU summit pillar – approving a contentious trade deal with the South American bloc Mercosur – was also aborted at the last minute amid chaotic protests by several-thousand farmers in the Belgian capital.

Following some 16 hours of talks, during which the deep divisions within the bloc were exacerbated by legislative overreach pushed by Commission President Ursula von der Leyen and her compatriot German Chancellor Friedrich Merz, European Council discussions ended without agreement on the controversial proposal to use frozen Russian assets to finance a €90 billion ($105 billion) loan aimed at allowing Kiev to continue its military campaign.

Instead, member states agreed to raise common debt – borrowing on the capital markets – to finance Kiev in the short term while “technical aspects of the reparations loan are worked out,” according to European Council President Antonio Costa.

“We have a deal,” Costa wrote on X around 3am, without addressing the funding mechanism behind the package. Merz similarly glossed over the bloc’s failure to back the loan with frozen Russian assets, insisting that “Ukraine will receive an interest-free loan of €90 billion, as I suggested.”

Moscow has already initiated arbitration proceedings against Euroclear, the Belgian-based clearing house that holds some €180 billion of Russian funds, and during the talks in Brussels announced that it had widened the case to include “European banks,” increasing the risk to European lenders of backing the plan.

Belgian Prime Minister Bart De Wever was at the center of the disagreement, though his opposition to the plan to steal Russian assets was supported by Italy’s Giorgia Meloni, Hungary’s Viktor Orban, Slovakia’s Robert Fico, and the Czech Republic’s Andrej Babis. The latter three reportedly tabled an option for EU members to provide joint debt for Ukraine instead – exempting their countries from the idea but also pledging not to veto it.

Merz and von der Leyen are thought to have rejected that plan, and instead insisted on more a dangerous option to steal Russia’s assets and attempt to give Ukraine’s Vladimir Zelensky enough money to keep fighting for two more years. As Polish Prime Minister Donald Tusk put it ahead of the meeting, “either money today or blood tomorrow.”

Without the EU war chest, Zelensky faces a short-term economic crisis. Ukraine needs some €72 billion to repay a G7 loan and stay afloat fiscally.

Following the EU Council’s failure to endorse the Merz/von der Leyen war option, the bloc has effectively denied itself the “seat at the table” hosting Ukraine peace talks that it was demanding since the US took the diplomatic initiative.

Attention will now turn to a meeting between US and Russian delegations in Miami, and to US President Donald Trump’s call for peace by Christmas.