EU backs indefinite freeze on Russia’s frozen cash ahead of big loan plan for Ukraine
European Union leaders have agreed on a new and more practical way to fund Ukraine’s defence against Russia. Instead of immediately using frozen Russian assets, the EU will raise money through joint borrowing to provide €90 billion in support for Ukraine over 2026–2027, according to diplomats familiar with the decision.
The agreement was confirmed after long overnight talks in Brussels. EU summit chairman Antonio Costa announced the breakthrough on social media, saying the funding package had been approved. While he didn’t initially spell out where the money would come from, draft summit conclusions clarified that the funds will be raised by borrowing from financial markets, backed by the EU budget.
Why the EU Changed Its Approach
Using frozen Russian central bank assets had been discussed for months, but the plan proved too complicated and politically sensitive to finalize quickly. One major concern came from Belgium, which holds around €185 billion of the €210 billion worth of Russian assets frozen in Europe. Belgian authorities wanted strong guarantees against possible legal claims or retaliation from Russia if the funds were released.
As a result, EU leaders opted for a faster and safer solution: joint borrowing, similar to how the bloc financed pandemic recovery efforts.
What This Means for Ukraine
The decision ensures Ukraine has secure funding for the next two years, which diplomats described as a crucial outcome. Under the current plan:
- The EU will borrow the money collectively and lend it to Ukraine.
- Ukraine will only start repaying the loan if it eventually receives war reparations from Russia.
- Until then, frozen Russian assets will remain locked, but the EU keeps the option to use them to recover the loan in the future.
Not All EU Countries Are Paying
The agreement also makes clear that Hungary, Slovakia, and the Czech Republic will not see their financial obligations increase. These countries had opposed contributing directly to Ukraine’s financing, and the final deal respects that position.
Frozen Russian Assets Still on the Table
Although joint borrowing is now the primary funding method, the EU hasn’t fully abandoned the idea of using frozen Russian assets. EU governments and the European Parliament will continue discussions on a separate loan mechanism linked to those assets, keeping the option open for later use.
As one diplomat summed it up, the new deal may not resolve every political debate, but it delivers something vital right now: certainty for Ukraine and unity among EU leaders at a critical moment.
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