Faced with a historical decision is the European Union (EU), as the Ukrainian Front gradually retire with the apparent gradual departure of the Ukrainian front, it must raise significantly more money to support the Ukraineas the defense against her aggressive war Russia will be at risk by 2026.
With the support of Commission President Ursula von der Layen and German Chancellor Friedrich Mertz, the plan to use frozen Russian assets for a pack of many billion euros for Ukraine is now gaining dynamic. The money is intended to finance Ukraine’s defense against Russia at least until 2028. “If we manage to implement this lever, it is able to change the data,” says a German government spokesman.
This October (on October 1 at an extraordinary summit and 23 – 24 October 2025 at the Regular Summit), the Heads of State and Government are expected to pave the way for the use of around 140 billion euros in frozen assets of the Russian central bank. An initial debate among the heads of state in Copenhagen on Wednesday (1.10.2025) “will be closely monitored by Moscow,” says the top adviser.
The EU seeks to cancel Putin’s plan
The aim is to secure reliable funding for Kiev’s defense against the Russian aggressive war for the next two to three years – regardless of the frequent policy changes of US President Donald Trump. If this step succeeds, Europe will replace the US as Ukraine’s most important economic, military and political supporter.
Specifically, the EU intends to issue interest -free bonds of 140 billion euros and buy them with the assets of the Russian Central Bank that have been frozen in Belgium. Legally, the European Union and Ukraine will be responsible. However, since Russia does not pay compensation, Russian funds will remain committed and could be fully confiscated on a later date.
This is the result of the committee’s proposal, according to Handelsblatt. Finance Commissioner Valdis Dobrovskis had already requested greater use of Russian assets in September. “We will not be quiet until the attacker stops,” he said.
Such a decision would be a strategic shock to the Kremlin.
So far, Vladimir Putin assumed that Europe would abandon Ukraine without US military and political support, according to sources in Brussels and Berlin.
Putin was based on European fatigue and expected that Ukraine would run out of money for its defense by 2026. A few EU Member States would probably have supported additional cuts in their own budgets.
“Funding for Ukraine is no longer safe. The Americans are leaving and Europeans will have to bear much more, “another government official said.
With € 140 billion, the European Union would provide Ukraine support for at least two more years. “In simple words: This will give the Ukrainians absolutely valuable time to defend themselves from the Russian attack and force Moscow to re -examine its own timetable,” the senior official said. Last week, Chancellor Mertz argued in an article in the Financial Times that using Russian assets, Europe eventually took the initiative and forced Putin to sit on the negotiating table.
Victor Orban will be isolated
Until now, it was mainly the Member States of Northern and Eastern Europe that had requested the most consistent use of Russian assets to fund Ukraine. In recent days, Mertz has been positioned as a prominent supporter, giving the debate a new momentum.
With Germany, the most densely populated and economically stronger Member State now supports the approach. This increases the credibility of the structure – also because, ultimately, Member States should collectively guarantee the credit line.
However, some obstacles remain: In an initial debate among EU ambassadors, many EU countries, including France, have expressed reservations, EU diplomats said.
Technical questions, in particular, remain unsolved: How can funding be legally structured in such a way that Russia is not essentially expropriated, but EU governments are not afraid of additional costs? Another crucial factor will be whether the EU will be able to bypass the veto of Hungarian Prime Minister Victor Orban.
Central Bank’s frozen reserves in the Euroclear Central Settlement Central Settlement today are € 194 billion, as announced by the company in its six -month report. € 176 billion of them are now in cash, as most bonds have already expired. More bonds will expire in the coming years, so the rest of the cash will increase by € 10 billion in addition, according to the European Commission.
Russian reserves will be ‘redirected’
In the two -page document received by Handelsblatt, the European Commission describes how Europeans intend to use Russian reserves. According to the document, cash will be “redirected” to the EU.
Technically, Euroclear invests Russian money in interest -free EU bonds. The European Commission then intends to transfer raised funds to Ukraine in the form of loans.
From the perspective of the German government, the money should be used mainly to buy European weapons. The billions of dollars should not only boost Kiev’s defensive potential, but also promote the development of the European weapons industry.
Chancellor Mertz plans to win the support of other heads of state and governments to propose at an informal summit in Copenhagen this Wednesday. At the end of October, the Heads of State and Government are then expected to officially order the Commission to draw up the legal act so that the first tranche of the loan can be disbursed in Ukraine early next year.
The loans will only be demanded when Russia pays compensation. Ukraine then could use compensation payments to repay its debts to the EU Commission.
If Russia, for any reason, does not pay the compensation, the EU Member States will undertake the loan repayment to Ukraine – or expropriate Russia on a later date and use the frozen assets.
There are technical and political obstacles
“It is vital for the whole company not to affect Russia’s dominant assets,” the Commission writes. Russia’s claim against Euroclear remains unchanged.
However, the EU Committee proposes to use only 140 billion euros in cash for the purchase of EU bonds. The rest will be needed to serve a $ 50 billion G7 loan already granted to Ukraine.
According to EU diplomats, there are widespread support for the proposal in the capitals. However, it is not clear if even the most skeptical people are already agreeing. Belgian Prime Minister Bart de Weaver reiterated his request on Friday not to let Belgium take on the risks if the EU decides to “get Putin’s money”.
De Vever expressed his disappointment that Mertz had supported the use of Russian assets in the Financial Times. “If countries see that central banks’ assets can disappear at the desire of European policies, they could decide to withdraw their reserves from the eurozone,” De Wever said.
This would create a dangerous precedent. But if Mertz manages to persuade French President Emmanuel Macron and other leaders, Belgium will not retain his exclusion, EU diplomats said.
European Central Bank is currently hesitant to take a position
The European Central Bank (ECB), which has been warning for years against the seizure of Russian assets, is still silent on the new plan. ECB President Christine Lagarde said in an indefinite statements at the meeting of EU finance ministers ten days ago that he had not yet seen a specific proposal.
An ECB spokesman said on Monday: “We would like to see written suggestions before we evaluate us.” In the end, this is a decision by the leaders of governments, not the ECB.
Commission lawyers apparently also found a solution to bypass the Hungarian Prime Minister Orban and freeze Russian assets in the long run. The commitment of Russian assets is part of EU sanctions against Russia – and they must be renewed unanimously every six months.
This has allowed Orban, who has opposed further support for Ukraine, to delay the plan so far. In the document, the Commission now proposes the use of Article 31 of EU Treaties to extend sanctions by a special majority. This would significantly reduce the risk of the EU Member States fulfilling their loan guarantees, the document said.