The fate of Russia’s frozen assets in Europe has become a flashpoint in the ongoing standoff between Moscow and the European Union, revealing deep divisions within the West and raising urgent questions about the future of international finance. As the war in Ukraine grinds into its fourth year, the debate over whether to use these immobilized billions to support Kyiv has exposed not only legal and financial anxieties but also the shifting sands of global power and trust.
When Russia launched its full-scale invasion of Ukraine in February 2022, Western governments responded with unprecedented speed and coordination. About $300 billion in Russian government reserves held overseas were frozen, with the lion’s share—approximately $246 billion—locked up in Europe, mainly at Belgium’s Euroclear, a financial giant that settles cross-border securities. According to Fair Observer, freezing these assets was the easy part; deciding what to do with them has been anything but straightforward.
Initially, Europe played it safe. The freeze had to be renewed every six months, a legal dance that signaled both resolve and caution. European officials worried that going further—permanently blocking a sovereign nation’s central bank reserves—could unsettle markets, undermine confidence in the euro, or expose European institutions to costly legal battles. As Fair Observer notes, such reserves have long been considered almost untouchable, a bedrock of the international financial system.
Yet, as the war dragged on and Ukraine’s reconstruction needs ballooned—estimated by the United Nations in February 2025 to be in the hundreds of billions—the pressure to act mounted. European Council President António Costa reminded leaders of their commitment to keep the assets immobilized until Russia ended its aggression and compensated Ukraine for the damage. In December 2025, the EU made a decisive move: the Council voted to freeze Russian sovereign assets indefinitely, removing the requirement for periodic renewals. This was, as Fair Observer put it, a strong signal to Russia and the world that Europe was prepared to accept legal and diplomatic risks to maintain control of the funds.
But the question of what to do with the money—now approximately €210 billion, with 70% held at Euroclear in Belgium—remained unresolved. The idea of seizing the assets outright to fund Ukraine’s war effort and reconstruction gained traction among some EU leaders and in Washington. The Biden administration, according to Fair Observer, imposed tough sanctions and insisted that Russia should pay for Ukraine’s recovery. However, a reported 28-point peace plan from Donald Trump’s administration and Russian envoys—which would have transferred control of the assets to a US-run investment scheme—was rejected by European governments, eager to keep the funds under EU control.
Inside the EU, the debate was fierce. Belgium, home to Euroclear, emerged as the main holdout. The Belgian government, as reported by Saba News Agency, worried that confiscating the principal €194 billion could have dire consequences for Euroclear, spook investors from outside the West, and damage the euro’s credibility as a reserve currency. Prime Minister Bart De Wever declared after a tense summit, “Reason has prevailed. This whole affair was extremely risky and dangerous, and it raised many questions. It was like a sinking ship, like the Titanic. Now it’s settled, and everyone is relieved.” He added, “I believe that international law has prevailed today. We avoided setting a precedent that could undermine legal certainty worldwide. We defended the principle that Europe respects the law, even when it is difficult, even under pressure.”
Other EU states, including Italy, Hungary, and Slovakia, also expressed skepticism or outright opposition, citing legal, financial, and political risks. Hungary and Slovakia, which have warmer ties with Moscow, threatened to veto measures linking the frozen assets to Ukraine, but ultimately agreed not to block the permanent freeze. Polls showed public opinion split: Britain reported 60% support for the freeze, while Italy was nearly evenly divided.
With consensus elusive, EU leaders on December 19, 2025, agreed to provide Ukraine with a €90 billion loan over two years, backed by the EU budget rather than the frozen Russian assets. European Commission President Ursula von der Leyen said Ukraine would only need to repay the loan after Moscow paid compensation for the damage it had caused. German Chancellor Friedrich Merz insisted the loan sent a “clear message” to Russian President Vladimir Putin, while French President Emmanuel Macron suggested the move could open the door to renewed political dialogue with Moscow.
For Russia, the EU’s decision not to seize the assets outright was a cause for celebration. Kirill Dmitriev, the Russian president’s special envoy, called it “a major victory for law and common sense.” On the social platform X, he wrote, “If this news is confirmed, the cancellation of the illegal scheme proposed by the EU will be a major victory for law and common sense.” He argued that the decision protected the euro, the Euroclear system, and the stability of Europe’s financial architecture. President Putin, meanwhile, warned that any move to seize Russian assets would “undermine confidence in the Eurozone” and that Russia would seek legal redress in European courts.
The Russian Central Bank announced plans to pursue compensation claims against European banks for losses incurred due to the freezes, and Moscow filed a $230 billion lawsuit against Euroclear. The frozen assets, as detailed by the US Council on Foreign Relations, include everything from luxury yachts and real estate to government bonds and gold, affecting about 5 million small Russian investors. The Russian Foreign Ministry dismissed the EU’s talk of compensation for Ukraine as “detached from reality.”
Ukraine, for its part, welcomed the indefinite freeze as a blow to Russia and a lifeline for its depleted finances, but the failure to unlock the funds for immediate use was a disappointment. With a projected foreign aid shortfall of €45-50 billion looming in 2026, the urgency of finding new sources of support is only growing. According to Saba News Agency, the EU estimates Ukraine will need an additional €135 billion over the next two years, with a liquidity crisis expected to begin in April 2026.
The broader implications of the EU’s decision are profound. As independent columnist Mary Devesky noted in The Independent, Putin has managed to turn his frozen billions from a vulnerability into a weapon, destabilizing the Eurozone and challenging the rule of law. Economist Andrei Zaitsev, writing for Al Jazeera Net, warned that the precedent set by the EU could drive other nations to seek alternatives to the Western financial system, undermining the euro and pushing countries to diversify their reserves away from Europe.
Katya Glod, of the Center for New Eurasian Strategies, argued in iPaper that Russia is waging a hybrid campaign to raise security risks in Europe, hoping to force leaders to choose between supporting Ukraine and protecting their own economies. The Trump administration’s pressure on the EU—and the EU’s resistance—reflect the complex interplay of strategic logic and competing values at the heart of the crisis.
As the dust settles, Europe must grapple with the consequences of its choices. The indefinite freeze of Russian assets may have averted an immediate financial or legal crisis, but the debate over weaponizing sovereign reserves, the credibility of European institutions, and the future of Ukraine’s recovery is far from over. The world is watching to see whether Europe’s decision will strengthen or fracture the global order it helped build.
