After days of tense negotiations and high-stakes diplomacy in Brussels, European Union leaders have struck a deal to provide Ukraine with €90 billion in financial support over the next two years, sidestepping—at least for now—a far more controversial plan to tap into Russia’s frozen assets. The agreement, reached on December 19, 2025, comes as Ukraine faces a looming financial crisis and the war with Russia grinds on, putting immense pressure on European unity and resolve.
The summit, described by many as a make-or-break moment for both Ukraine and the EU, was dominated by fierce debate over whether to use the estimated €210 billion in Russian assets immobilised in Europe, most of which are held by the Brussels-based securities depository Euroclear. Ukrainian President Volodymyr Zelenskyy, who attended the meeting in person, made an impassioned plea for immediate action, warning that Ukraine is “months from running out of cash” and faces a €45-50 billion deficit in 2026. “If Ukraine doesn’t get fresh assistance in the spring, it will be forced into making painful sacrifices, including ‘significantly’ reduced drone production and even territorial concessions,” Zelenskyy told reporters, according to BBC.
For weeks, the European Commission, led by Ursula von der Leyen, had pushed for an unprecedented “reparations loan” to Kyiv, backed by the frozen Russian funds. The plan, while bold, was fraught with legal and financial risks. Belgium, which hosts the lion’s share of these assets, emerged as the chief opponent. Prime Minister Bart De Wever made it clear that Belgium would only support the plan if the risks—especially potential Russian retaliation and legal claims—were fully shared by other EU states. “Give me a parachute and we’ll all jump together. If we have confidence in the parachute that shouldn’t be a problem,” De Wever quipped in the Belgian parliament, as reported by Nation.Cymru.
Belgium’s caution was echoed by several other countries, including Malta, Bulgaria, and the Czech Republic, all of whom raised doubts about the legal basis and financial prudence of confiscating Russian sovereign assets. Italy’s Prime Minister Giorgia Meloni summed up the mood, telling parliament, “If the legal basis for this initiative were not solid, we would be handing Russia its first real victory since the beginning of this conflict.”
Meanwhile, Hungary’s Viktor Orbán stood out as the most vocal opponent of any further EU money for Ukraine, insisting that Budapest would not allow the EU budget to guarantee loans or participate in joint borrowing. In the end, Hungary, Slovakia, and the Czech Republic secured an opt-out from the loan scheme in exchange for lifting their vetoes, a move that French President Emmanuel Macron downplayed as having little impact on the overall financial package.
With the reparations loan plan bogged down by legal uncertainties and political divisions, EU leaders shifted gears. After marathon talks stretching late into the night, they agreed to raise the €90 billion for Ukraine through joint borrowing on the financial markets—a method tried and tested during the COVID-19 pandemic. This approach, as Belgian Prime Minister De Wever put it, meant “Europe has won, and financial stability has certainly won. We avoided chaos, we avoided division. Europe stays united. A unity today means that Europe remains relevant at the geopolitical table.”
German Chancellor Friedrich Merz, a strong advocate for using Russian assets, framed the compromise as a “great success,” saying, “Europe has demonstrated its sovereignty by agreeing to issue common debt to finance Ukraine’s needs.” He also emphasized that the immobilized Russian assets would remain frozen and could still be used in the future to repay the loan or as leverage to ensure Russia compensates Ukraine for war damages. “This sends a clear signal from Europe to Putin: This war will not be worth it. We will keep Russian assets frozen until Russia has compensated Ukraine,” Merz declared, as quoted on his official X account.
European Commission President Ursula von der Leyen, despite her disappointment at not clinching the reparations loan, hailed the agreement as a breakthrough. “We made it. We have secured an agreement that can deliver on the financial needs of Ukraine for the next two years,” she told reporters, according to Euronews. She also left the door open to eventually leveraging the frozen Russian assets, saying, “The immobilised Russian assets will remain immobilised and the Union reserves its right to make use of the cash balances to finance the loan.”
The deal, however, was not without its critics. Hungarian Prime Minister Orbán blasted the decision as “a bad decision, which brings Europe closer to the war,” arguing that the loan is essentially “losing money” since “the Ukrainians will never be able to pay it back.” Nonetheless, he conceded that a reparations loan using Russian assets would have been even worse, calling it an act that “would mean a war immediately.”
Throughout the summit, the specter of Russian retaliation loomed large. Moscow has already launched legal action against Euroclear in Russian courts and has threatened further measures if its assets are seized. Credit rating agency Fitch placed Euroclear on a negative watch, citing the legal risks and potential fallout from the EU’s plans. Euroclear’s CEO warned that the reparations loan proposal was “fragile, unpredictable and risky,” raising concerns about the company’s reputation and the stability of the eurozone’s financial system.
As the dust settles, the EU’s decision to opt for joint borrowing is seen as a pragmatic move that balances the urgent needs of Ukraine with the legal and financial realities facing member states. The immobilized Russian assets remain a powerful bargaining chip, both as a future source of reparations and as a symbol of Europe’s determination to hold Moscow accountable.
For Ukraine, the financial lifeline could not come soon enough. As one Finnish official told the BBC, “This is a crunch time for Ukraine to keep fighting for the next year. There are of course peace negotiations but this gives Ukraine leverage to say ‘we’re not desperate and we have the funds to continue fighting’.” With U.S. and Russian officials also set to meet in Miami for peace talks, the EU’s show of unity sends a message that Europe remains committed to supporting Kyiv, even as the path forward remains fraught with uncertainty and risk.
In the end, the summit’s outcome underscores the complexity of balancing solidarity, legal norms, and geopolitical interests in a time of war. While the reparations loan remains on the table for future debate, for now, Europe has chosen the safer waters of joint debt—keeping its options open and its unity intact, at least for today.
