In a climate of growing urgency, fueled by the protracted and brutal nature of the conflict in Ukraine, the European Union is moving forward with determination in the debate on a proposal that until very recently seemed unlikely and legally risky: using Russian sovereign assets, frozen by sanctions, to directly and sustainably finance the defense and eventual reconstruction of the invaded country. European Commission President Ursula von der Leyen stated from Copenhagen on Wednesday that there is a "growing consensus" among the 27 member states that Russia, and not solely European taxpayers, should bear the colossal economic and human cost of the war it started. This paradigm shift reflects not only a pressing financial need, but also a political will to hold the aggressor accountable in a tangible and unprecedented way.
“Russia is responsible, it has caused the damage, and it must be held accountable,” von der Leyen reporters at the informal summit of European leaders, laying the groundwork for an argument that is as much moral as it is economic. The proposal, which the Commission vehemently defends as a “sound legal path,” is designed to circumvent the deep complexities of international law that traditionally protect sovereign assets from outright confiscation. Instead, it proposes an ingenious financial mechanism: using the billions of euros belonging to the Russian Central Bank, which are tied up in various European financial institutions, primarily in Belgium, as collateral for a massive loan intended for Kyiv. The key to this mechanism, the president explained, is that “Ukraine must repay this loan if Russia pays reparations.” This way, the ultimate responsibility for repayment would fall on the aggressor, creating an incentive for Moscow to fulfill its reparations obligations in a future peace .
The head of the EU executive stressed that support for Ukraine is "armoured" and that, at a crucial moment when Vladimir Putin's regime is constantly "testing" the bloc's resolve and unity, it is essential to maintain a "common sense of urgency and unity." The idea of mobilizing these funds is not entirely new, but it has gained significant traction in recent weeks given the pressing need to ensure a stable and predictable flow of funding for Kyiv, whose resources are being depleted by the war. Germany, one of the bloc's most influential and often cautious economies, has clearly supported this initiative. Chancellor Olaf Scholz has publicly advocated for a similar formula, which would involve a loan of around €140 billion, a figure that could drastically change Ukraine's resilience, to be repaid only if Moscow compensates Kyiv at the end of the conflict.
From the Baltic countries, whose geographical and historical proximity to Russia gives them a unique perspective on the threat, Estonian Prime Minister Kaja Kallas, one of the strongest and most consistent voices against the Kremlin, insisted on the need to act with the utmost speed. "We are working on this initiative to move forward as quickly as possible," she admitted, although she frankly acknowledged that the diplomatic path is not completely clear. "Not all member states are on board, it doesn't have everyone's support yet. I can't set a timeframe, but we are trying to move as quickly as possible," she emphasized, highlighting the intense negotiations still taking place behind closed doors between European capitals to align positions and mitigate the perceived risks.
The main doubts and the most notable resistance come from Belgium, a country that plays an absolutely central role in this debate, as the majority of Russian funds are held within its territory through the Euroclear clearing house. Belgian Prime Minister Alexander De Croo has expressed serious and well-founded reservations about the legality and, above all, the potential long-term consequences of such a measure. Last week, he forcefully warned that such a move "will never happen," arguing the enormous risk of setting a dangerous precedent for global financial stability. "If countries see that central bank money can disappear whenever European politicians deem it appropriate, they might decide to withdraw their reserves from the eurozone," he reasoned. This potential capital flight, Brussels fears, could destabilize the single currency and irreparably damage Europe's reputation as a safe and predictable haven for international investment .
France takes a more intermediate stance, seeking a balance between boldness and prudence. Its president, Emmanuel Macron, stated that any option ultimately agreed upon must be "operational" and "have no legal weaknesses" to avoid future challenges in international courts. While he viewed the Commission's political push as positive, he also echoed Belgian concerns about confidence in the financial system. "We Europeans need to remain an attractive and reliable place. When assets are frozen, international law is respected, and that is what the Belgian prime minister reiterated," Macron argued, attempting to reconcile the need to support Ukraine with the obligation to preserve the continent's financial architecture.
Meanwhile, other partners such as Sweden and Finland, both recently joined the Atlantic alliance and keenly aware of the Russian threat, circulated a joint document to make clear their unequivocal support for the proposal. In the text, they argue that using Russian assets is a vital measure to "strengthen Ukraine's defense" and lay the foundations for its eventual reconstruction. "Ukraine's survival and Europe's security depend on its financial and defense needs being met sustainably," they stated, calling for the Union to play a "central role" in providing Kiev with "predictable and sufficient" funding. The debate, fraught with geopolitical and financial implications, is ongoing, and the decision European leaders make in the coming months will define not only the future of support for Ukraine, but also the unwritten rules of the international financial system for the decades to come.
