EU Divided Over Using Frozen Russian Assets for Ukraine

European Union leaders failed on Friday to reach an agreement on using frozen Russian assets to support Ukraine, shifting late-night talks instead toward providing Kyiv with a loan backed by the bloc’s common budget.

Lengthy negotiations at a summit of the 27-member bloc underscored the urgency of finding a financing solution to keep Ukraine economically afloat as the war continues.

The main proposal had been to use around €200 billion in Russian central bank assets frozen within the EU to generate a loan for Ukraine. However, the plan stalled after Belgium—where most of the assets are held—sought guarantees on sharing potential legal and financial liabilities, a demand other member states were unwilling to meet.

“After extensive discussions, it became clear that the reparations loan requires further work, as leaders need more time to assess the details,” an EU official said.

Attention has now shifted to offering Ukraine a loan backed by the EU’s common budget, with a proposed amount of €90 billion over two years. Diplomats said discussions on eventually using frozen Russian assets would continue, though the idea has been put on hold for now.

The EU estimates that Ukraine will need an additional €135 billion over the next two years, with funding pressures expected to intensify from April.

Ukrainian President Volodymyr Zelensky had urged EU leaders to use Russian assets, arguing that they should help defend against aggression and rebuild war-damaged areas. He said securing Ukraine’s finances by the end of the year would strengthen its position in any future peace talks.

Although the decision not to use the assets was disappointing for Kyiv, securing funding through alternative means would still provide critical relief.

The setback was also a blow to German Chancellor Friedrich Merz, a strong supporter of the proposal, who had warned that failure to act could undermine the EU’s credibility.

Meanwhile, broader diplomatic efforts to end the conflict continued. Zelensky said Ukrainian and US delegations would hold talks in Washington on Friday and Saturday, seeking clearer security guarantees to deter future aggression.

He questioned how such guarantees would function if Russia were to launch another attack, while US President Donald Trump reiterated his call for Ukraine to move quickly toward an agreement.