Zelensky Urges EU to Unlock Frozen Russian Assets as Ukraine Faces Looming Cash Crisis.
Brussels:
Ukrainian President Volodymyr Zelensky has issued a stark warning to European Union leaders, urging them to urgently agree on a multi-billion-euro loan drawn from frozen Russian assets to prevent Ukraine from running out of money within months.
Speaking at a pivotal EU summit in Brussels, Zelensky said Ukraine faces a budget deficit of €45–50bn next year and warned that without new funding by spring, Kyiv would be forced to scale back critical defence production, including drones that are central to its war effort.
“Without this injection of funds, we will have to reduce production,” Zelensky told leaders, stressing that the money was essential both to sustain Ukraine’s military if the war continues and to fund recovery should peace talks advance. He described the proposal as “moral, fair and legal”.
€210bn in Frozen Russian Assets at the Centre of Debate
At the heart of the dispute are around €210bn (£185bn; $245bn) in Russian sovereign assets frozen in the EU following Moscow’s full-scale invasion of Ukraine in February 2022. The bulk of that money is held by Euroclear, a Belgium-based financial services firm.
Until now, the EU has limited itself to transferring the interest generated by the frozen assets to Ukraine, stopping short of using the capital itself. Belgium and several other member states have resisted calls to deploy the funds directly, arguing that doing so as a so-called “reparations loan” could expose them to serious legal and financial risks.
Belgian Prime Minister Bart De Wever captured the mood of caution in Brussels, telling his parliament that Belgium would only proceed if the risks were clearly shared across the EU.
“If everything is nailed down and shared by the rest of the EU,” he said, “then we’ll jump into the abyss together with the rest of the Europeans and hope the parachute holds us.”
EU Commission Pushes €90bn Loan Plan
The European Commission has proposed loaning around €90bn to Ukraine over the next two years, drawn from the frozen Russian assets. That sum would cover roughly two-thirds of the €137bn Kyiv is estimated to need through 2026 and 2027.
Commission President Ursula von der Leyen vowed to deliver a breakthrough, telling leaders:
“We will not leave the summit without a solution.”
Despite divisions, one senior European government official described the mood as “cautiously optimistic, not overly optimistic”.
Supporters of the plan, including Poland and Germany, argue that using the assets would both sustain Ukraine and send a powerful signal to Moscow. Polish Prime Minister Donald Tusk said Europe had to “rise to this occasion”, while German Chancellor Friedrich Merz told the Bundestag that the move would demonstrate to Russia that continuing the war was futile.
Legal Risks and Political Resistance
Russia has warned the EU not to use its frozen money and has already filed a lawsuit against Euroclear in a Moscow court in an attempt to recover the funds. Ratings agency Fitch has also placed Euroclear on negative watch, citing potential legal risks linked to the EU’s plans.
Opposition remains strong in parts of the bloc. Hungary’s Prime Minister Viktor Orbán has made clear he will not back any further EU funding for Ukraine, while Slovakia’s Robert Fico has said he opposes the use of the assets if they are spent on weapons rather than reconstruction. Italy’s Giorgia Meloni, along with Malta, Bulgaria and the Czech Republic, has demanded firm legal guarantees before endorsing the proposal.
Any decision will require approval from at least 15 member states representing 65% of the EU’s population. European Council President António Costa has pledged not to force the issue over Belgian objections, stressing that consensus remains the priority.
Wider Diplomatic Context
The summit comes as diplomatic activity intensifies elsewhere. US President Donald Trump has said a deal to end the war is “closer than ever”, with US and Russian officials due to meet in Miami this weekend to discuss a potential peace plan. Ukrainian officials are also travelling to the United States for parallel talks.
Meanwhile, Russian President Vladimir Putin has sharply criticised Europe, accusing it of “total degradation” and using derogatory language to describe Ukraine’s European allies.
A Defining Moment for Europe
For Kyiv, the outcome of the summit could prove decisive. EU officials argue that maintaining financial support will give Ukraine leverage in any negotiations by ensuring it is not forced into concessions out of desperation.
“This is crunch time for Ukraine to keep fighting for the next year,” one Finnish government official said. “It shows Ukraine is not desperate and has the funds to continue.”
As leaders debate the risks, Zelensky has made clear that delay is not an option. With Ukraine’s finances under mounting strain, the decision on whether to unlock Russia’s frozen billions may mark one of the most consequential moments yet in Europe’s response to the war.
