EU Countries Push Brussels to Use Frozen Russian Assets to Fund Ukraine

EU countries, including Sweden, the Netherlands, Spain, and Poland, are pressing Brussels to revive efforts to use more than €200bn in frozen Russian sovereign assets as concerns mount over another funding squeeze in Ukraine.

A coalition of member states is preparing to ask the European Commission to resume technical work on the proposal and report on possible legal or financial structures that could overcome Belgium’s objections, according to four people briefed on the document who talked to the Financial Times.

The letter is expected to be sent on Thursday.

Pressure Returns to Brussels

The initiative revives a plan that stalled last winter after Belgium opposed using Russian central bank assets immobilized under EU sanctions.

Most of the assets are held at Euroclear, the Brussels-based central securities depository, leaving Belgium concerned that it could bear repayment risks if Russia mounted successful legal challenges.

Swedish Foreign Minister Maria Malmer Stenergard said the bloc should reopen the discussion.

“Now is the time to start a new discussion about how we can make further use of Russia’s frozen assets for Ukraine’s and our benefit,” she said. “This is the fair and smart way to make sure that Ukraine can defend itself, and all of Europe.”

One person briefed on the planned letter described it as “a call to the Commission to do the technical work” needed to make use of the assets and ease Ukraine’s budget pressures.

€90bn Loan Seen as Insufficient

The renewed push reflects concern in EU capitals that Ukraine will require financing beyond a €90bn loan backed by the bloc’s budget.

That package was assembled last December after the plan centered on immobilized Russian assets failed to secure agreement.

“The €90bn loan is a manifestation of the EU’s commitment to support Ukraine, but it is clearly not enough,” Stenergard said.

Ukraine is simultaneously trying to defend its cities from nightly Russian missile attacks, adding urgency to the debate over longer-term financing.

Profits generated by Russian assets held at Euroclear are already being used to support a loan of up to €50bn agreed in 2024.

States Seek Progress Report

EU governments agreed in December to continue work on establishing a Reparations Loan linked to cash balances generated by Russia’s immobilized assets.

The countries behind the new initiative are now seeking an update from the Commission after receiving no subsequent communication on that work, according to people familiar with the discussions.

“We (need to) make sure it’s not only one or two member states that bear the responsibility of this,” one person briefed on the document said.

The push is therefore aimed not only at reopening the political debate but also at determining whether Brussels has identified legal or technical changes capable of broadening support.

Belgian Objections Persist

Belgium’s resistance remains the central obstacle.

Brussels has continued to warn about possible Russian legal retaliation and wider risks to financial markets if the sovereign assets themselves are used.

An EU official said no alternative had yet emerged that removed the political difficulties confronting the proposal last December.

“We don’t have a magic white rabbit to pull out of the hat here,” the official said.

The official added that existing legal proposals could still be adjusted and potentially reconsidered if the political environment shifted.

One person familiar with the discussions was more skeptical, saying: “Nothing has changed since the debate and disaster last time.”

Wider Budget Debate Looms

The renewed pressure comes as EU governments begin an increasingly contentious discussion over the size and financing of the bloc’s next seven-year shared budget.

Some diplomats have suggested that further support for Ukraine could become part of those negotiations, increasing pressure on member states to identify alternative sources of financing.

Ukraine has repeatedly called for the Russian assets, frozen after Moscow launched its full-scale invasion in February 2022, to be used to support its defense.