The European Commission has unveiled a groundbreaking proposal to generate €90 billion ($105 billion) in funding for Ukraine. The plan leverages immobilized Russian state assets to support Kyiv’s military defense and essential public services.
Announced on Wednesday, the initiative is championed as a “reparations loan.” It utilizes Russian assets currently frozen within the European Union.
However, the proposal faces immediate hurdles. Belgium, which holds the vast majority of these assets, has expressed significant legal reservations.
Increasing the Cost of Aggression
Commission President Ursula von der Leyen outlined the ambitious scope of the plan. She stated that the EU aims to cover two-thirds of Ukraine’s financing needs over the next two years.
“Since pressure is the only language the Kremlin responds to, we can also dial it up,” von der Leyen said. She emphasized that the proposal provides the means to increase the costs of the war for Russian leadership.
The primary focus is on assets held by Euroclear, a financial institution based in Brussels. However, the proposal has been expanded to cover other financial institutions across the bloc. Officials noted that France, Germany, Sweden, and Cyprus also hold relevant assets.
Belgium Pushes Back
Despite assurances, the Belgian government remains unconvinced. Brussels argues that it cannot shoulder the immense risks of such an operation alone.
A senior official warned of potential financial liability. They noted that compensation claims for “unlawful expropriation” could eventually exceed the value of the assets themselves.
Consequently, Belgium is demanding ironclad guarantees from its EU partners:
- Legal Costs: A commitment to cover all costs arising from Russian lawsuits.
- Reimbursement: Assurance that partners will contribute funds immediately if a court rules that Moscow must be refunded.
Belgian Foreign Minister Maxime Prevot indicated that current legal proposals fall short of these requirements.
Legal Maneuvering and Voting
Moscow has warned that using its assets would constitute theft. In response, the Commission argues the scheme is not confiscation because the money is structured as a loan. Under the plan, Ukraine would only repay the debt if Russia pays reparations.
To navigate political gridlock, the Commission has identified a legal pathway to bypass unanimous support. This avoids a potential veto from Hungary. Instead, the scheme can proceed if approved by a qualified majority: 15 of the 27 member countries, representing at least 65% of the bloc’s population.
International Coordination
The proposal comes amid complex diplomatic maneuvering. A separate U.S.-backed peace plan suggested using assets in a joint investment vehicle.
However, von der Leyen confirmed that the EU’s plan was communicated to U.S. Treasury Secretary Scott Bessent and received positively.
The EU acknowledges that funds will likely not be available until the second quarter of next year. As a result, officials are seeking interim support from international partners.
The issue is expected to dominate the upcoming EU leaders’ summit on December 18. The Commission hopes to secure a firm commitment from member states at that time.
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