The European Union on Friday agreed to indefinitely freeze Russian central bank assets held in Europe, removing a major obstacle to using the funds to support Ukraine’s defense against Russia, reports Reuters.
The EU aims to ensure Ukraine remains financially supported and militarily capable, viewing Russia’s invasion as a direct threat to European security. EU member states plan to mobilize some of the Russian sovereign assets frozen after Moscow’s 2022 invasion.
A key step, agreed on Friday, is to lock 210 billion euros ($246 billion) in Russian assets indefinitely, rather than renewing the freeze every six months. This prevents countries with closer ties to Moscow, such as Hungary and Slovakia, from potentially blocking future extensions and forcing the EU to return the funds to Russia.
The indefinite freeze is intended to pave the way for an EU plan to use the frozen Russian cash to extend a loan of up to 165 billion euros to Ukraine, covering its military and civilian budgets in 2026 and 2027. The loan would only be repaid once Russia compensates Kyiv for war damages, effectively functioning as an advance on potential future reparations.
EU leaders are expected to finalize the reparations loan details at the European Council on December 18, resolving remaining issues including guarantees for Belgium to prevent it from shouldering the full financial risk if Moscow challenges the loan.
Ukrainian President Volodymyr Zelenskiy will meet German Chancellor Friedrich Merz in Berlin on Monday, with additional European and NATO leaders joining later. Ukrainian Prime Minister Yulia Svyrydenko praised the EU decision as a “landmark step toward justice and accountability,” saying it strengthens the foundation for the reparations loan mechanism.
Germany has pledged 50 billion euros in guarantees, while Danish Finance Minister Stephanie Lose said “some worries” remain but expects progress at next week’s European Council. European Commissioner for Economy Valdis Dombrovskis confirmed that solid guarantees are being arranged for Belgium.
Hungarian Prime Minister Viktor Orban criticized the move, calling it damaging to the EU and pledging to restore a “lawful state of affairs.” Russia’s central bank denounced the plan as illegal and said it would defend its interests.
The bank is suing Brussels-based central securities depository Euroclear in a Moscow court over actions affecting frozen assets, which include 185 billion euros of Europe’s total holdings. Euroclear has faced similar Russian lawsuits since the 2022 asset freeze.
Reports suggest Ukraine could potentially join the EU by January 1, 2027, under U.S.-mediated talks to end the war. However, diplomats warn that EU accession normally takes many years, making the 2027 target “extremely difficult” and possibly unrealistic.
(Exchange rate: $1 = 0.8524 euros)
Bd-pratidin English/ Jisan
