Brussels: The European Union is intensifying discussions on how to utilize more than €210 billion in frozen Russian assets to aid Ukraine, with a focus on ensuring long-term reconstruction support once the war ends. EU foreign policy chief Kaja Kallas stressed that while confiscating the assets outright is not currently viable, their use for Ukraine’s eventual recovery is now central to the bloc’s strategic planning.
Since Russia’s invasion of Ukraine, billions in Russian central bank reserves and private assets have been frozen across Europe, with a large share held in Belgium’s Euroclear financial clearing system. These frozen funds are already generating significant interest, part of which is being redirected to help Ukraine finance its defense needs. However, leaders within the EU are increasingly looking at how these resources could play a more substantial role in reconstruction once hostilities subside.
Despite shared solidarity with Kyiv, member states remain divided on the immediate use of these funds. Countries such as Estonia, Lithuania, and Poland argue for direct seizure and transfer of Russian assets, framing it as both a moral and practical necessity to make Moscow pay for the destruction it has caused. On the other hand, heavyweight economies like France, Germany, and Belgium have urged caution, warning of severe legal challenges, potential damage to financial stability, and risks to the credibility of the euro as a global reserve currency.
Belgium, which holds the bulk of these frozen assets, has insisted it will not approve any risky investment strategies aimed at boosting returns from the funds. The Belgian government has taken a conservative approach, ensuring that interest is captured without destabilizing Euroclear’s financial operations. This conservative stance reflects wider concerns that mismanagement of these assets could have unintended repercussions across global markets.
Kallas reiterated that Russia will not be allowed to reclaim its frozen assets unless it pays full reparations for the war. Still, she acknowledged that the outright seizure of the funds is “not politically realistic” at this stage due to international law constraints and the possibility of retaliatory measures by Moscow. Instead, EU leaders are focusing on ensuring a framework where these funds, or their profits, can be channelled toward rebuilding Ukraine’s devastated infrastructure and economy after the war concludes.
The EU’s deliberations mirror earlier proposals within the Group of Seven (G7), which endorsed using profits generated from the frozen assets rather than seizing the principal amount. This approach has already been applied in part, underpinning a $50 billion aid package for Ukraine earlier this year. Looking ahead, EU officials suggest that maintaining this cautious but strategic use of Russian funds could provide Ukraine with a stable financial lifeline during the long recovery phase, while avoiding a precedent that might unsettle global financial systems.
As the war drags on, the question of how and when the EU can fully mobilize these frozen assets remains one of the most consequential challenges for Europe’s unity, its legal frameworks, and its credibility in standing with Ukraine against Russia’s aggression.