EU Finally Acts: Russian Assets Locked, Clearing Way for Massive Loan to Ukraine

The European Union has moved to lock in the freeze on Russian central bank reserves, marking a significant shift in how the bloc handles Moscow’s sovereign assets and opening the way for a large-scale financial package for Ukraine. The decision removes the previous six-month renewal requirement, meaning the roughly 210 billion euros held across Europe will remain inaccessible to Russia unless a qualified majority of EU countries - at least 15 member states representing over half of the Union’s population - votes to lift the measure. Until now, unanimity was needed, leaving the sanctions vulnerable to objections from Hungary or Slovakia, both of which had repeatedly threatened to block an extension.

European Commission President Ursula von der Leyen welcomed the move, stressing that it ensures the immobilization of Russian sovereign funds remains in place as the war approaches its fourth year. The revision allows the EU to proceed with its plan for a “reparations loan,” designed to raise as much as 90 billion euros over two years to support Ukraine’s finances. A separate proposal circulating in Brussels envisions a larger package of up to 165 billion euros to cover Ukraine’s needs for 2026 and 2027. The structure of the loan ties repayment to future compensation from Russia for war damage, effectively turning the assistance into an advance on expected reparations.

The European Council will meet on 18–19 December, where leaders are expected to discuss the final terms of the financial package and ensure that any risks are shared fairly among member states. Belgium has been one of the main skeptics of the reparations-loan mechanism. Brussels fears that, without permanent immobilization, a future veto could force Belgium - where Euroclear, the financial institution holding most of the assets, is based - to refund Russia for a sum approaching a third of its national GDP. The shift to majority voting under Article 122 of EU law is intended to directly address these concerns. EU officials say solid guarantees for Belgium are now being prepared, and Germany has already signaled it will provide around 50 billion euros in assurances.

Russia, for its part, reacted sharply. The Russian Central Bank condemned the EU plan as unlawful and said it would take all available legal steps to challenge it. Moscow has already filed a lawsuit in a local court against Euroclear, which manages a large portion of the frozen reserves. Russian statements have described the reparations-loan idea as a violation of international norms, though legal assessments conducted for the EU - including one from Covington & Burling - argue that the likelihood of Russia successfully overturning the measure in any international court is extremely low.

Despite the legal threats, Brussels views the indefinite freeze as a necessary step to secure stable long-term financing for Kyiv at a moment when Ukraine’s budget pressures are intensifying. Without fresh support, Kyiv could face severe financial shortages by mid-2026. The new arrangement is meant to ensure that political disputes within the EU do not interrupt the flow of assistance. European officials say the bloc now has a more durable mechanism in place, reducing the risk of internal vetoes and giving Ukraine clearer visibility on its future funding.

As the December summit approaches, EU leaders will still need to finalize several elements, including the distribution of guarantees among the member states and the legal structure that will back the loan. But with the indefinite freeze now approved, the bloc has cleared one of the major obstacles that had slowed progress and put coordination between capitals under pressure. The move marks both a tightening of economic pressure on Moscow and a signal of long-term commitment to Kyiv as the conflict continues.