On December 12, 2025, the European Union took a decisive step in its ongoing response to Russia’s invasion of Ukraine, agreeing to indefinitely freeze €210 billion (about $339 billion) in Russian central-bank assets held across the continent. This move, reported by The New York Times and other major outlets, marks a significant escalation in the West’s economic measures against Moscow, and it’s already stirring up both hope and controversy across European capitals.
For months, EU governments had debated whether to keep extending the freeze on these Russian sovereign assets every six months—a process that left the door open for dissenting states, particularly Hungary and Slovakia, to potentially veto the extension and force the return of the funds to Russia. But with this new agreement, the freeze is now indefinite, removing that risk and paving the way for a bold new financial strategy: using the immobilized assets to help Ukraine defend itself and rebuild.
According to The Globe and Mail, the EU’s plan is to use the frozen funds as collateral for a loan of up to €165 billion, which would cover Ukraine’s military and civilian budget needs for 2026 and 2027. The twist? Ukraine would only be required to repay the loan if and when Russia pays Kyiv war damages—essentially making the loan an advance on future Russian reparations. As Ukrainian Prime Minister Yulia Svyrydenko put it on X (formerly Twitter), “This decision strengthens the foundation for the reparations loan mechanism and brings us closer to a future in which Russia pays for its crimes and destruction caused.”
The agreement is not without its complications. EU leaders are scheduled to meet on December 18 to hammer out the final details of the reparations loan, including resolving a key sticking point: Belgium’s demand for solid guarantees that it won’t be left alone to foot the bill if Russia sues and wins in court. As Danish Finance Minister Stephanie Lose, whose country currently holds the rotating EU presidency, told reporters, “Some worries still need to be addressed, but hopefully we’ll be able to pave the way towards a decision at the European Council next week.”
Germany, for its part, has signaled strong support for the plan, promising €50 billion in guarantees for the reparations loan. European Commissioner for Economy Valdis Dombrovskis assured the public that “solid guarantees were being put together for Belgium,” emphasizing the bloc’s determination to see the plan through despite legal and political hurdles.
Yet not everyone in the EU is on board. Hungarian Prime Minister Viktor Orban, whose government has maintained friendlier relations with Moscow than most other EU states, denounced the move on Facebook, warning that the qualified majority vote used to pass the measure would cause “irreparable damage” to the bloc. Orban vowed that Hungary would do all it could to “restore a lawful state of affairs.”
The Russian government, unsurprisingly, has condemned the EU’s plan as illegal. The central bank in Moscow stated it would “use all available means to protect its interests,” and has already begun legal action against the Brussels-based central securities depository Euroclear, which holds €185 billion of the total frozen assets. Euroclear, for its part, has been fending off lawsuits in Moscow courts since the freeze began in 2022. Despite this legal saber-rattling, Dombrovskis appeared unfazed, brushing off the threats as the EU presses forward.
Meanwhile, the war in Ukraine and the broader conflict with Russia remain top priorities for European leaders. Ukrainian President Volodymyr Zelensky is set to visit Berlin on December 15 for talks with German Chancellor Friedrich Merz, with other European, EU, and NATO leaders expected to join. The timing is no accident; the summit will take place just days before the crucial EU Council meeting, underscoring the urgency and high stakes of the moment.
Behind these headline-grabbing moves lies a continent in political flux. As POLITICO reports, Europe is facing a resurgence of populist parties, fueled by voter frustration, cultural anxieties over increased migration, and a growing distrust in mainstream institutions. In countries like the UK, France, and Germany, far-right leaders are leading some polls, and the once-dominant centrist parties are struggling to maintain their grip on power. European Commission President Ursula von der Leyen, who declared after the 2024 EU Parliament elections that “the center is holding,” now faces a far more volatile landscape.
The populist surge in Europe has found an unlikely ally across the Atlantic. U.S. President Donald Trump’s administration recently published a new National Security Strategy that condemns what it calls “political correctness” in Europe, particularly on migration, and openly supports parties it describes as “patriotic.” Trump himself has said he’d endorse European candidates he believes would move the continent “in the right direction.” This transatlantic dynamic is making European diplomats in Washington increasingly uneasy. As POLITICO’s Jamie Dettmer writes, the usual holiday cheer among diplomats has given way to “quiet alarm,” with many fearing that the transatlantic relationship may never return to its pre-Trump normalcy.
These political tremors aren’t limited to Europe. In the United States, the Republican Party is experiencing its own internal debate over support for Israel and responses to antisemitism, with figures like Tucker Carlson and Marjorie Taylor Greene at the center of the fray. Meanwhile, the Texas Democratic primary for Senate in March 2026 is shaping up to be a high-stakes contest between Rep. Jasmine Crockett and James Talarico, raising questions about voter appeal and the party’s strategy in a state that hasn’t elected a Democrat statewide since 1994.
Back in Brussels, the EU’s decision to freeze Russian assets indefinitely is being hailed by Ukrainian officials as a “landmark step toward justice and accountability.” But the road ahead is anything but straightforward. With legal challenges looming and political divisions deepening both within Europe and between the EU and the U.S., the question remains: Can the EU maintain its unity and resolve long enough to see this ambitious plan through?
As the year draws to a close, European leaders are racing against the clock to secure what von der Leyen calls a “just and lasting peace” for Ukraine—and, by extension, for the continent itself. “We have not the luxury of time,” she warned in a recent interview. The coming weeks will test whether Europe’s center can still hold, or whether the forces of division will prevail.
