Europe’s leaders are moving to freeze Russia’s assets held in the continent, barring their use until Moscow ends its war in Ukraine and compensates the neighbor for the extensive damage caused over nearly four years. This step, expected to be approved at a Friday vote, would set the stage for leveraging tens of billions of euros from Russian Central Bank holdings to back a large loan aimed at supporting Ukraine’s finances and military needs over the next two years.
Hungarian Prime Minister Viktor Orbán, a longtime ally of Vladimir Putin in Europe, criticized the European Commission, which drafted the plan, for what he described as a breach of European law. He warned that the move could undermine the rule of law within the EU and argued that Hungary would push to restore a lawful order. Slovakia’s and Hungary’s positions complicate broad support, as both countries have signaled reluctance to approve additional Ukraine aid.
Currently, about €210 billion in Russian assets are frozen in Europe, with roughly €193 billion of that held by Euroclear, a Belgian clearinghouse, as of the end of September. The freeze stems from EU sanctions imposed in response to Russia’s invasion on February 24, 2022. These sanctions require renewal every six months, with all 27 member states needing to approve any extension.
Friday’s anticipated decision leverages EU treaty provisions that allow the bloc to defend its economic interests in emergencies, removing the veto power some members previously held over sanctions renewals and facilitating the use of frozen assets. Orbán has publicly criticized the move, arguing it undermines European law and legitimacy.
Slovak Prime Minister Robert Fico warned in a letter to European Council President Antonio Costa that endorsing strategies to cover Ukraine’s future military expenses could jeopardize broader peace efforts, particularly if the use of frozen funds complicates U.S.-led mediation. He also emphasized he would not back measures that finance Ukrainian military needs for years to come.
The European Commission contends that the costs of the war—both in energy prices and slowed growth—have already weighed on the EU, which has provided nearly €200 billion in assistance to Ukraine. French Foreign Minister Jean-Noël Barrot called the expected move a substantive decision that could influence the war’s trajectory and hasten peace, stressing Europe’s intent to retain control over how these assets are used.
The plan would further ensure that any use of the assets would require European authorization. It contrasts with a broader 28-point peace framework proposed by U.S. and Russian intermediaries, which envisioned releasing the frozen assets for Ukraine, Russia, and the United States; that plan was rejected by Ukraine and its European backers.
Belgium, home to Euroclear, opposes the reparations-loan concept, citing significant economic, financial, and legal risks and urging other EU members to share those risks. In Moscow, Russia’s Central Bank has filed a lawsuit against Euroclear over damages allegedly caused by the asset freeze, while Euroclear declined to comment. Separately, the Russian central bank asserted that EU plans to use frozen assets for Ukraine violate international law and infringe sovereign immunity of assets.
Contributors: Karel Janicek (Prague), Sylvie Corbet (Paris), and Katie Marie Davies (Manchester).
