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Sweden, the Netherlands, Spain and Poland are urging Brussels to renew efforts to leverage immobilised Russian sovereign assets to fund Ukraine, in response to fears that Kyiv faces a renewed funding crisis.
Plans to fund Ukraine using more than €200bn in Russian central bank assets held in the EU under sanctions collapsed last winter as Belgium, where the majority are held, blocked the initiative.
But a letter from a coalition of states to the European Commission sent on Thursday called on the EU’s executive to restart work on the concept, and seek clarity on any progress in alternative legal and technical frameworks that could provide a solution to Belgium’s veto.
“Now is the time to start a new discussion about how we can make further use of Russia’s frozen assets for Ukraine’s, and our, benefit,” said Swedish foreign minister Maria Malmer Stenergard. “This is the fair and smart way to make sure that Ukraine can defend itself and all of Europe.”
The letter states that “by using the immobilised assets, the EU can ensure that Russia pays for the destruction it has caused in Ukraine without delay, while at the same time reducing the burden on our own taxpayers”.
“We therefore propose that the Commission’s technical experts are invited to explore . . . new options on how to use the immobilised assets for the benefit of Ukraine, which ensure that the risk rests with all EU Member States and where no Member State holds a disproportionate burden,” states the letter, signed by the countries’ four foreign ministers.
They add that the topic should be discussed at a meeting of EU foreign ministers in Ireland next week.
Ukraine has long demanded the EU use the Russian assets, frozen under sanctions imposed against Moscow in the first days of its full-scale invasion in February 2022, to help fund its defence.
Profits arising from the assets stuck at Euroclear, the Brussels-based central securities depository which is holding the majority of the assets, are already being used to fund a loan of up to €50bn that was agreed in 2024.
As Kyiv strains to protect its cities from a nightly bombardment from Russian missiles, EU capitals now worry that the country requires additional financing beyond a €90bn loan raised against the bloc’s budget that was hastily assembled last December as an alternative to the immobilised asset idea.
“The €90bn loan is a manifestation of the EU’s commitment to support Ukraine, but it is clearly not enough,” Stenergard said.
“We [need to] make sure it’s not only one or two member states that bear the responsibility of this,” said the person briefed on the document.
In December, EU countries agreed to “continue working on . . . establishing a Reparations Loan based on the cash balances associated with Russia’s immobilised assets”. But there has been no communication on the issue since, so the countries are now asking for a progress report, the people said.
Belgium blocked the plan last year due to concerns that it would have to shoulder any repayment of the assets in case of legal challenges from Russia.
The seizure of Russian assets “would be illegal and would have legal consequences”, Kremlin spokesperson Dmitry Peskov told reporters on Thursday. “Russia will use the full range of legal means to defend its interests and to pursue legal action against those who made and implemented such decisions,” he added.
An EU official briefed on the internal discussions said “no one has yet come up with a new proposal that doesn’t hit the same political barriers that existed in December,” adding “we don’t have a magic white rabbit to pull out of the hat here”.
“But we can tinker with and tweak the same legal proposals, and if the political environment changes, maybe it will pass,” they added.
Belgium still has the same qualms as last year, fearing legal retaliation from Russia and warning of risks for financial markets as a consequence of touching the sovereign assets.
“Nothing has changed since the debate and disaster last time,” one of the people said.
The call to return to the immobilised asset proposal coincides with an intensifying debate on the size and funding of the EU’s next seven-year shared budget. Some diplomats have suggested that additional financing for Ukraine could become part of that debate and increase pressure on capitals to find alternative sources of cash.
Euroclear declined to comment.
Additional reporting by Anastasia Stognei
