The initiative to use sanctioned Russian assets did not receive sufficient support.
European Council President António Costa announced the decision overnight on December 19 following 15 hours of talks among EU leaders. According to him, the approved loan is a temporary solution that will allow the European Union to continue financing Ukraine in 2026.
The Czech Republic, Slovakia, and Hungary will not participate in the program. These countries had previously stated that they do not support using EU budget funds to assist Ukraine. At the same time, as one senior European official told the Financial Times, these states “will not pay directly, but they will pay politically.”
Ukraine will be required to repay the loan only after Russia pays reparations. António Costa emphasized that Russian assets will remain frozen and could potentially be used to service the debt in the future if Moscow refuses to pay reparations.
French President Emmanuel Macron, quoted by Bloomberg, said that the EU has fulfilled its commitments to Ukraine and that the absence of such a decision would have been catastrophic.
German Chancellor Friedrich Merz clarified that funds raised through joint EU borrowing could be used by Ukraine both for military needs and to cover budget expenditures. According to him, the decision sends a strong signal in favor of ending the war, as he believes Vladimir Putin will make concessions only when he realizes that the war no longer benefits him.
Belgian Prime Minister Bart De Wever, who had previously been strongly opposed to the so-called “reparations loan,” expressed satisfaction with the compromise reached. He stressed that the EU had managed to avoid chaos and internal divisions.
The initiative to use €210 billion in frozen Russian assets has at least been postponed.
According to the Financial Times, the agreement to raise funds backed by EU taxpayers rather than Russian assets represents a political setback for German Chancellor Friedrich Merz and European Commission President Ursula von der Leyen, who had actively promoted the reparations loan idea and sought to pressure the Belgian prime minister. For more than two years, the EU had been discussing a legally robust mechanism to use frozen Russian assets to support Ukraine.
Last week, Brussels presented a proposal to use Russian central bank assets as collateral for a €90 billion loan to Ukraine, intended to cover its financial and defense needs over the next two years. In total, around €210 billion in Russian assets are frozen in Europe.
However, the plan faced strong internal resistance. Belgium, where most of the funds are held, voiced the strongest objections. The Belgian prime minister insisted on additional guarantees.
At the same time, France and several other countries refused to provide national guarantees, while the European Central Bank declined to offer emergency liquidity support to Euroclear.
Six other EU countries—Italy, Bulgaria, the Czech Republic, Slovakia, Malta, and Hungary—also opposed the reparations loan and proposed considering alternative options, including issuing joint EU debt. According to EU High Representative Kaja Kallas, one of the reasons for this position was pressure from Russia.
Ahead of the Brussels summit, Russia threatened a harsh response if frozen assets were used, further intensifying internal EU debates. The Kremlin prepared regulatory measures that could facilitate the seizure of assets, and the Central Bank of Russia has already filed a lawsuit worth 18 trillion rubles (approximately €200 million) against Euroclear in a Moscow court.
