Crunch EU summit discusses using frozen Russian assets for Ukraine

Talks in Brussels focused on seeking to reassure Belgium, which holds most of these frozen assets, and several other concerned countries that Europe would share the legal and financial risks, in a bid to secure their backing for the plan.

A new draft text of a deal prepared for the leaders' talks offered Belgium and other countries unlimited guarantees for potential damages, should Moscow successfully sue them.

Such a pledge is in line with Belgium's demands, but diplomats said it would be a problem for some governments who would need parliamentary approval for such a promise.

The new draft, seen by Reuters, also offered EU countries and institutions, whose assets may be seized by Russia in retaliation for participating in the plan, the possibility to offset such damages against Russian assets held by the EU.

Finally the text, which is under discussion and could still change, also offered a mechanism of unconditional, irrevocable, on-demand guarantees that the EU would swiftly repay the Russian central bank assets in all circumstances should the need arise.

"Now we have a simple choice - either money today or blood tomorrow," Polish Prime Minister Donald Tusk said on entering the talks, urging fellow EU leaders to agree to the proposal. "All European leaders have to finally rise to this occasion."

The EU sees Russia's war as a threat to its own security and wants to keep Ukraine financed and fighting.

With public finances across the EU already strained by high debt levels, the European Commission has proposed using frozen Russian central bank assets to secure a huge loan of 90 billion euros to Kyiv.

'CAN'T AFFORD TO FAIL'

Because it holds 185 billion of the total 210 billion euros frozen in the EU, Belgium is deeply concerned about being left exposed to legal and financial risks if Moscow retaliates. Other states including Italy have also expressed worries.

Several EU leaders arriving at the summit said it was imperative they find a solution. They were also keen to show European countries' strength and resolve after U.S. President Donald Trump last week called them "weak".

"We just can't afford to fail," EU foreign policy chief Kaja Kallas said, adding that leaders would stay at the summit as long as needed to find a solution.

Ukrainian President Volodymyr Zelenskiy, who took part in the summit, urged the bloc to agree on a deal he said would allow Ukraine to keep fighting.

"The decision now on the table – the decision to fully use Russian assets to defend against Russian aggression – is one of the clearest and most morally justified decisions that could ever be made," he said.

BELGIUM WANTS MORE GUARANTEES ON RISK SHARING

Belgian Prime Minister Bart De Wever told his country's parliament early on Thursday that he had not yet seen guarantees that answered his concerns on legal and liquidity risks. The latest draft text appears to address all his concerns.

Russia's central bank has said the EU plans to use its assets are illegal. It filed a lawsuit in Moscow this week seeking $230 billion in damages from clearing house Euroclear.

The stakes are high because without the EU's financial help Ukraine will run out of money in the second quarter of next year and most likely lose the war to Russia, which the EU fears would bring closer the threat of Russian aggression against the bloc.

Kallas put the chances of a deal on the assets at 50/50. German Chancellor Friedrich Merz said: "My impression is that we can come to an agreement."

REPARATIONS LOAN IS 'ONLY GAME IN TOWN'

Other options to finance Ukraine in 2026 and 2027 could entail the EU borrowing the needed amount against the security of the EU budget and then lend the money to Ukraine.

But such a move would require unanimity among the 27 EU countries and Moscow-friendly Hungary has already said it would veto it.

Diplomats said the use of the Russian assets was therefore in practice "the only game in town."