Russia Matters, 12/19/25
EU leaders have abandoned a plan to fund Ukraine with €210 billion in frozen Russian assets, which the leaders of France, Germany and some other “Old Europe” countries have been pushing for months, thus failing what the New York Times described as an EU unity test. The decision not to tap the Kremlin’s frozen wealth is a big setback for Kyiv and its supporters in Europe, some of whom described this week as a “break or take” one, while advocating for the use of Russian assets. Instead of using these frozen assets, which European support[er]s have argued was essential for Ukraine to sustain its defense against Russia, the EU agreed to provide Kyiv with €90 billion ($101 billion), largely in loans, through 2027, financed by joint borrowing on capital markets backed by the EU budget.2The deal—without which Ukraine was likely to default as early as next spring—provides a critical two-year financial lifeline. However, in practical terms, that still leaves Kyiv needing around $50 billion per year in additional outside support simply to keep the state functioning, as well as to finance the procurement of drones, drone components and other military equipment. It is crucial to underscore that this is a loan, not a transfer of frozen Russian assets. As such, it adds to Ukraine’s already heavy debt burden rather than easing it, allowing the country to struggle on rather than stabilizing its finances. As reported above, the broader initiative Volodymyr Zelenskyy had been pressing—backed by German Chancellor Friedrich Merz and French President Emmanuel Macron, among others—to mobilize frozen Russian assets has, for now, failed. Opposition to using the frozen Russian funds in such a way has come from Belgium’s Bart De Wever, Hungary’s Viktor Orbán and Slovakia’s Robert Fico among others. In its preview of a vote by EU leaders this week on whether to use Russian funds for funding Ukraine, The New York Times wrote that this vote could “Unify the European Bloc — or Splinter It.”