A 90 billion euro ($105 billion) interest-free loan from Europe aimed at insulating Ukraine’s economy and military from a budget black hole until 2027 did not pan out the way some leaders had hoped, but the fact that it did materialize is a win for the EU.
“If we divided Brussels today, Europe would give up its geopolitical relevance,” Belgian Prime Minister Bart De Wever told reporters around 4 a.m.
“It would be a complete disaster.”
Leaders of the EU’s 27 member states have failed to agree to a historic loan using frozen Russian state funds, but a compromise is clear. Ukraine will not repay a penny until the war is over, and Europe reserves the right to use Russian assets to fund the loan.
The EU executive is now tasked with exploring how to do this.
For now, funds freed up by the loan will be welcomed by Kiev as it struggles to halt advances on the Russian battlefield while negotiating with Washington on a peace plan to end the war.
Ukrainian President Volodymyr Zelensky warned that if the results of the investigation were not provided to Ukraine, Kyiv would be in a situation where “there will not be enough money for lives and weapons.”
He welcomed Friday’s 11th-hour breakthrough.
Zelensky wrote on
European leaders have also taken aim at Moscow.
European Council President Antonio Costa said: “Our message to Russia today is very clear. First, you have not achieved your goals with Ukraine. Second, Europe will stand with Ukraine today, tomorrow, and as long as necessary.”
According to International Monetary Fund forecasts, Ukraine will have a funding gap of $160 billion (€137 billion) over the next two years, partly due to U.S. funding cuts. The EU hopes to meet two-thirds of that, or about $105 billion (€90 billion).
The idea of ​​using frozen assets is nothing new. It was proposed from the early days of Russia’s 2022 invasion of Ukraine.
Some European powers have long expressed strong opposition to this. French President Emmanuel Macron declared in the Oval Office in February that the idea of ​​accessing Russian state funds violated international law.
This week he welcomed the European move as the most important “visibility” in Ukraine’s budget.
As with Western support for Ukraine, another red line has been dropped.
This photo, taken in Brussels on March 5, 2025, shows the building of Euroclear, the international fund custodian headquartered in Belgium. – Nicholas Toukat/AFP/Getty Images
tough talk
But it hasn’t all been smooth sailing. Hungary, Slovakia and the Czech Republic all voted in favor of the loan, on the condition that it would not have a financial impact on them.
Belgium holds the majority of the fixed funds, fearing future Russian retaliation or liability if a peace deal results in Moscow demanding the funds be returned.
Ahead of the vote, Belgium’s de Weaver demanded “binding guarantees” from all EU member states in exchange for Belgium approving compensation loans.
“Words are not enough,” he told the Belgian parliament on Thursday.
The EU has so far been using the interest on these assets, mainly bonds, to fund some of its support for Kyiv. But as the bonds themselves mature, they turn into cash, and that’s how much cash the EU executive wants to borrow and lend to Ukraine until Russia pays reparations.
On Monday, Russia’s central bank filed a lawsuit demanding billions of dollars in damages from Belgium’s Euroclear depository institution. The bank said the move was a pre-emptive measure against EU plans to “transfer frozen assets held by Euroclear to third parties,” Russian state news agency TASS reported.
The Russian central bank said in a press release on Friday that it would seek compensation from European banks for frozen assets and lost profits.
side effect
As the longest night of the year approaches in Brussels, the outlook for Europe looks bleak.
US President Donald Trump slammed European leaders as “weak” in a recent interview, days after his administration’s new national security strategy accused Europe of being “in political crisis” and suffering from a “lack of confidence”.
A U.S.-backed 28-point peace plan leaked last month called for investing $100 billion of Russia’s central bank’s globally frozen assets in “U.S.-led reconstruction and investment in Ukraine” and for the U.S. to reap profits from those investments. Europe’s frozen assets account for the majority of Moscow’s global fixed assets.
That triggered a flurry of diplomatic efforts from European leaders, who were outraged by the idea of ​​the White House expropriating assets in their custody.
European Executive President Ursula von der Leyen reiterated this point ten times in a brief speech to the European Parliament on Wednesday in a thinly veiled attack on the United States.
She said this week’s summit was about confronting “the reality that the world has become dangerous and transactional. A world of war, a world of predators.”
“Europe must take responsibility for its own security. This is no longer an option, it is a necessity,” she said.
Transatlantic trust, long taken for granted, has evaporated this year.
Europe is now wary of forces fomenting division on two fronts: cultural attacks from a transactional White House, but mostly subversion and confrontation from Moscow. President Vladimir Putin’s near-constant efforts to undermine Europe reached a new level on Thursday when he called the continent’s leaders “pigs” in a speech to Russian military officials ahead of an EU summit.
Tom Kittinger, director of the Center for Finance and Security at the Royal United Services Institute think tank, told CNN: “The Russians are working day and night to divide Europe and they are doing a better job at that than Europe is at keeping it cohesive.”
lifeboat
The White House has publicly pointed to Ukraine’s past battlefield difficulties or structural weaknesses as leverage to broker a hasty peace deal.
Speaking before the end of European negotiations, Zelensky said a financing deal would mitigate that threat.
“If we have these assets, we will have more confidence at the negotiating table,” he said. Kyiv will be able to resist public guarantees for at least the next few years.
He acknowledged that any agreement would not seriously harm Kiev’s most important drone industry, which is the lifeline of frontline troops.
Likewise, the country’s claimed long-range attacks on Russia, including attacks on Moscow’s oil and gas infrastructure, will also be affected, he said.
“All of this will disappear,” he told reporters.
The early hours of Friday brought some relief to Kyiv and Brussels.
In the face of Russia’s relentless attacks on Ukraine, and a White House that seems eager for a quick rather than a just peace, Europe’s lifeboat for Ukraine — a lifeboat that has emerged from a morass of division and delay — promises to provide Kyiv with a courageous friend in the uncertain months ahead.
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