EU Pressures Reluctant States: Frozen Russian Assets or Eurobonds, Take Your Pick

The European Union is intensifying pressure on member states reluctant to approve funding for Ukraine, urging them to use frozen Russian assets or face the alternative of footing the bill themselves, Politico reports. The Commission’s plan to tap these assets for a 140 billion euros reparations loan faces obstacles, particularly from fiscally cautious countries like Belgium, Germany, and the Netherlands, while highly indebted nations such as France and Italy are also hesitant to take on extra burdens.

Officials see the frozen Russian funds as the only viable option, noting that joint EU borrowing, or eurobonds, is largely unacceptable to most governments, especially the so-called frugal states. The Commission is banking on the prospect of eurobonds as a threat to push hesitant nations toward agreeing to the asset-based plan, which Brussels believes is critical to meet Ukraine’s urgent needs.

At last week’s EU summit, Belgium’s Bart De Wever blocked progress, delaying the decision until December at the earliest. Meanwhile, the EU is racing against time: Ukraine could run out of money by March, and a potential alliance of Ukraine-skeptic countries led by Hungary could further complicate matters. Diplomats describe the approach as calculated diplomacy, offering nations a choice between two unappealing options to achieve the desired outcome.

Euroclear in Belgium holds most of the assets, raising legal and financial risks for the country. The Commission has pledged collective risk sharing, stressing that the 140 billion euros would likely never be repaid to Russia unless the Kremlin ends the war and compensates Ukraine - a scenario deemed extremely unlikely. Despite concerns, EU officials remain confident of reaching a deal at the next European Council in December, aiming to ensure Ukraine receives critical support and to increase pressure on Russia.