EU leaders failed to reach agreement Thursday on a proposal to provide Ukraine with a $140 billion “reparations loan” backed by frozen Russian central bank assets held in European institutions. The impasse emerged during a European Council summit in Brussels, despite Ukraine warning that it could run out of funds by spring 2026.
Belgium, which controls the largest share of Russia’s sovereign assets through the Euroclear clearinghouse, continued to oppose the plan without firm guarantees from other member states that they would reimburse Euroclear should Russia sue and win compensation. Hungary, Slovakia, Bulgaria, Italy, Malta, and the Czech Republic have also signaled opposition, with Hungarian Prime Minister Viktor Orbán vowing to block any move to seize Russian assets permanently.
Ukrainian President Volodymyr Zelensky attended the summit and addressed leaders directly Thursday morning in an apparent attempt to sway skeptical governments. Zelensky warned that Ukraine faces a €45–50 billion funding shortfall in 2026 and said defense production could slow without new guarantees.
Opponents of the loan argue that permanently seizing Russian reserves would erode global confidence in European financial institutions and risk retaliatory litigation. Moscow last week began formal legal proceedings to reclaim its frozen reserves, first filing in a Moscow court before planning to take its case to a non-European jurisdiction where Euroclear maintains assets.
The financing crisis confronting Ukraine may be more immediate than its battlefield setbacks. The Ukrainian economy has been sustained for four years by hundreds of billions of dollars in Western assistance—including U.S. subsidies for Ukrainian businesses and public sector salaries. With the Trump administration ending direct aid and the EU facing internal resistance to large-scale financing, Kiev risks insolvency amid continued military pressure.
Over the weekend, a Russian delegation is due to meet with U.S. envoy Steve Witkoff and President Donald Trump's son-in-law Jared Kushner in Miami as peace negotiations continue.