EU leaders failed to make progress on a €140 billion loan to Ukraine against frozen Russian assets at a summit in Copenhagen on October 1. Belgium refused to lift its objection, while France and Luxembourg are concerned about the legal implications.
This is reported by the Financial Times, citing sources.
The European Commission has proposed providing Ukraine with a loan in the form of a cash equivalent of frozen Russian assets held at Euroclear, a Belgian financial institution. Under the plan, if Russia refuses to pay reparations to Ukraine following its war against the country, it will lose rights to the assets.
During a brief discussion of the proposal yesterday, various EU leaders indicated they were prepared to agree to the general principle, but the commission needed to examine the legal and financial implications in more detail, three officials familiar with the meeting told the FT.
This has stalled the process, making it highly unlikely that the European Commission will present a formal legal proposal to EU leaders at their next meeting in Brussels in three weeks, given the scale of the technical work that needs to be done.
Belgian Prime Minister Bart De Wever is now demanding that the EU “mutually share” the risk of placing frozen assets in Belgium’s Euroclear and provide more legal protection in case Moscow files a lawsuit against the country. De Wever spoke out against the Ukraine loan proposal in a closed-door meeting but did not speak to reporters before or after.
Frozen Russian assets
The value of frozen Russian sovereign assets in the EU is almost €211 billion. In total, the European Union, the G7 countries and Australia have frozen approximately €260 billion in securities and cash.
In October 2024, the EU Council finally approved a loan of up to €35 billion to Ukraine. This money is the blocʼs contribution to the G7 initiative to provide Ukraine with a $50 billion (€45 billion) loan, which will be repaid with the proceeds from frozen Russian assets.
A few days after the EU Council decision, the G7 countries agreed to a $50 billion loan for Ukraine using proceeds from Russiaʼs frozen assets. The US contribution was $20 billion.
The European Commission on August 29 began developing a mechanism to transfer almost €200 billion of frozen Russian assets. The EU is considering transferring the assets to a “special purpose holding company” supported by the G7 countries. The €18 billion from the EU will be paid in full by the end of the year — which is why they are again looking for a new solution regarding frozen Russian assets.
The UK government on September 4 directed £1 billion from the proceeds of frozen Russian assets to purchase military aid for Ukraine.
For more news and in-depth stories from Ukraine, please follow us on X.