A bloc official has put forward a compromise, involving short-term borrowing by member states for Kiev while a “reparations loan” scheme is being formulated
The EU’s scheme to seize Russian assets within the bloc to finance Ukraine’s military and prolong its disastrous war has failed to win the support of bloc leaders. Another key element of the EU summit, approving a controversial trade deal with the South American bloc Mercosur, was also called off at the last minute due to chaotic protests by several thousand farmers in the Belgian capital.
After approximately 14 hours of talks, during which the deep-seated divisions within the bloc were intensified by legislative overreach pushed by Commission President Ursula von der Leyen and her German counterpart Chancellor Friedrich Merz, the European Council talks concluded without a result.
According to Euronews, European Council President Antonio Costa reportedly suggested that bloc members raise joint debt, i.e., borrowing on financial markets, to fund Kiev in the short term while “the technical aspects of the reparations loan are being worked out”.
The future of the controversial plan to use frozen Russian assets in the bloc to finance an €180 billion loan to keep Kiev’s military conflict ongoing remains uncertain.
Moscow has already initiated arbitration proceedings against Euroclear, the Belgium-based clearing house holding around €130 billion of Russian funds, and during the Brussels talks announced it had expanded the case to include “European banks”, increasing the risk for European lenders backing the plan.
Belgian Prime Minister Bart de Wever was at the center of the dispute, and his opposition to the plan to seize Russian assets was supported by Italy’s Giorgia Meloni, Hungary’s Viktor Orban, Slovakia’s Robert Fico, and Czechia’s Andrej Babis. The latter three reportedly put forward an option for EU member states 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 believed to have rejected that plan and instead insisted on the riskier option of seizing Russia’s assets and attempting to provide Vladimir Zelensky with enough money to continue fighting for another two years. As Polish Prime Minister Donald Tusk said ahead of the meeting, “either money today or blood tomorrow”.
Without the EU war chest, Zelensky faces a short-term economic crisis. Ukraine needs approximately €72 billion to repay a G7 loan and stay fiscally solvent.
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” for hosting Ukraine peace talks, which it had been demanding since the US took the diplomatic initiative.
Attention will now shift to a meeting between US and Ukrainian delegations in Miami, and to US President Donald Trump’s call for peace by Christmas.