Belgium has torpedoed European Union plans to secure a €90bn loan for Ukraine against Russia’s frozen assets, forcing leaders to back the funding through the EU budget instead after marathon talks ending in the early hours of Friday.
The bloc had entered Thursday’s summit hoping to tap some of the €210bn in Russian funds frozen in Europe to guarantee urgent financing for Kyiv. But Belgium—which hosts 88% of those funds—demanded unlimited budget guarantees from other member states if Moscow won a successful damages claim.
Belgian Prime Minister Bart De Wever dismissed the reparations loan plan outright. “When we explained the text again, there were so many questions that I said, ‘I told you so, I told you so.’ There are a lot of loose ends. And if you start pulling at the loose ends in the strings, the thing collapses.”
His objections carried weight: Euroclear in Brussels, which holds the vast majority of frozen Russian assets, is being sued by the Russian central bank for $230bn. Its top executives have also faced an intimidation campaign orchestrated by Russian intelligence, the Guardian reported this week.
Germany pushes back
German Chancellor Friedrich Merz, who had championed the frozen assets plan, insisted the EU retained the right to use immobilised Russian funds. “If Russia does not pay reparations we will – in full accordance with international law – make use of Russian immobilised assets for paying back the loan,” he said.
He called the eventual agreement “a decisive message because [Vladimir] Putin will only make concessions once he realises his war will not pay off”.
But the Kremlin’s top economic negotiator, Kirill Dmitriev, welcomed the failure to “illegitimately use Russian assets to finance Ukraine” in a Telegram post, adding that “for the time being, the law and common sense have won a victory”.
Hungary, Slovakia and Czech Republic cut deal
The path to a budget-backed loan had appeared blocked because it required unanimous approval from all 27 member states. But Hungary, Slovakia and the Czech Republic—three nationalist governments often at odds with Brussels over Ukraine—agreed to support the plan on condition they did not have to contribute to the loan guarantees.
Hungarian Prime Minister Viktor Orbán tweeted “back in business!” alongside a photo from a trilateral meeting of the three leaders. The final agreement text states that EU guarantees for the loan “will not have an impact on the financial obligations” of these three countries.
European Council President António Costa announced the €90bn loan would cover Ukraine’s needs for the next two years, backed by the EU budget. Kyiv will repay only once Russia pays reparations.
“The union reserves its right to make use of the immobilised assets to repay this loan,” Costa said, though how this would work in practice remains unclear.
Kyiv relieved but gap remains
Ukrainian President Volodymyr Zelenskyy described the deal as “significant support that truly strengthens our resilience”, adding that “it is important that Russian assets remain immobilised and that Ukraine has received a financial security guarantee for the coming years”.
Kyiv is likely to be relieved that EU leaders agreed on funding. Zelenskyy had warned that Ukraine risked running out of money to make drones, a vital component of its defence against Russia’s invasion. He had earlier told EU leaders that using Russia’s frozen assets for his country’s defence was “one of the clearest and most morally justified decisions that could ever be made”.
Poland’s Prime Minister Donald Tusk had cast the Ukraine finance decision as “money today or blood tomorrow”.
Danish Prime Minister Mette Frederiksen called it “quite something” to get 27 countries to agree on a €90bn loan for another country. “There are a lot of people outside the European Union and unfortunately also inside the European Union who tries to divide us. It is getting more and more difficult and I think this will continue,” she said.
The EU loan covers only part of Ukraine’s estimated €136bn needs for military and civilian finance in 2026 and 2027. Brussels has called on non-EU allies to provide about €45bn to cover the rest.
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