EU Nears Deal To Use Russian Frozen Assets As New Form Of Ukraine Aid

On October 23, senior leaders from the European Union’s 27 member states met in Brussels to discuss Russia’s ongoing invasion of Ukraine, European defense, and developments in the Middle East. They also focused on affordable housing issues and migration across the EU.

During the segment on Ukraine, EU leaders highlighted the need to increase European support for Ukraine. They also explored methods on how to put additional pressure on Russia to try to force it to end the ongoing invasion of Ukraine.

One method discussed during the quarterly European Council session on Thursday was a plan to use frozen Russian assets within the EU and transfer them to Ukraine. In this proposal, the Russian assets, valued at around $217 billion, would be used by the Ukrainian government for defense purposes, other forms of assistance, and reconstruction efforts. The proposed deal would function as a loan, where the funds from Russia’s seized assets in the EU would be “repaid to Russia if it agreed to compensate [Ukraine] for the destruction caused by the war.” If finalized and approved, the $217 billion loan would be disbursed to Ukraine in several installments throughout 2026 and 2027.

Following deliberations on the proposal, EURACTIV reported that discussions on using Russian frozen assets to help Ukraine have progressed. The EU’s 27 members agree in principle, but legal experts and policymakers will need to discuss how to fully implement the plan so that Ukraine receives the $217 billion in frozen Russian assets. The European Commission will construct this formal legal proposal. In addition, all 27 members must reach a consensus before the plan is put into place.

Discussions on future aid to Ukraine come at a critical time in the Russia-Ukraine war. According to the Kiel Institute for the World Economy, defense aid for Ukraine significantly declined in 2025. In its report published on October 14, the economic institute found that “military allocations [to Ukraine] from European countries [this summer] fell by 57 percent compared to January-June 2025.” Additionally, the Kiel Institute found that U.S. defense assistance to Ukraine declined sharply in 2025. As a result, this has put additional pressure on the EU and European members of NATO to provide further aid to Ukraine.

The decline in defense aid from Europe and the U.S. is a concern for Ukraine. According to news organizations such as The Guardian and the New York Post, Ukrainian stockpiles are depleting. Should these trends continue, Ukraine will risk shortages of ammunition and weapons. Without this defense aid, Ukrainian soldiers and volunteers will struggle to defend their country against Russia’s ongoing invasion.

Aside from Ukraine’s need for defense aid, the Ukrainian government has also run an annual budget deficit during the Russian invasion. According to a POLITICO Europe report published on October 21, it is estimated that the Ukrainian government needs $60 billion in assistance for 2026. Should Ukraine not receive this foreign aid, then the Ukrainian government risks another budget shortfall. This would make it more difficult for Ukraine to fund its defense efforts and government programs as the Russian invasion continues.

In other words, Ukraine is in desperate need of assistance to continue defending itself against Russia’s war. But how would using the EU’s plan of using Russian frozen assets help Ukraine? Additionally, what are the benefits, consequences, and risks of the EU allocating $217 billion from frozen Russian assets to Ukraine?

Using Frozen Russian Assets Offers Ukraine Additional Aid While Also Alleviating Financial Pressures On The EU

As the EU explores how to give Ukraine its inventory of frozen Russian assets, which are primarily based in Belgium, the Ukrainians have stated that they would use the $217 billion to purchase the defense, humanitarian, and medical aid necessary to help them in their fight against Russian aggression. The assistance from the EU via frozen Russian assets would also be used to help finance various Ukrainian government programs, and offset Ukraine’s budget deficit.

“[This] is a critical juncture for Ukraine and its ability to continue ensuring its defense, security, economic well-being, and its future. Russia has shown zero credible interest in ending its relentless and deadly attacks on Ukrainians,” Jonathan Katz, a Fellow at The Brookings Institution and Senior Director at the Anti-Corruption, Democracy, and Security Project, told me in an interview.

The sum of Russian frozen assets in the EU to fund Ukraine is financially significant. As the EU prepares to construct the legal framework for the proposed deal, the $217 billion would more than double the aid that the EU has sent to Ukraine over the past three years. (Between February 2022 and August 2025, the EU provided $186 billion in aid to Ukraine.)

If all 27 EU member states approve the plan, the Russian frozen assets could also help offset financial pressure on the EU to aid Ukraine. For example, U.S. President Donald Trump has argued that the Europeans need to provide more assistance to Ukraine. In addition, the United States has decided not to provide additional defense aid to Ukraine. As a result, using the EU’s frozen Russian assets for Ukraine would allow the EU to continue aiding Ukraine without putting financial pressure on European governments, organizations, and taxpayers.

“Trump’s return to the White House has meant an end to direct U.S. financial and military assistance to Ukraine, but he is still prepared to sell weapons. So Ukraine’s European partners must find the funds from somewhere to plug the gap created by the loss of U.S. financial support and purchase arms from the Trump administration. Taking the money from national budgets would be politically risky and could spark a public backlash along with calls to stop backing Ukraine. So the most logical solution is to use frozen Russian assets,” Peter Dickinson, the publisher of Business Ukraine magazine, told me in an interview.

In other words, supporters of the EU using the frozen Russian assets to aid Ukraine see the plan as mutually beneficial for both the EU and Ukraine. The Ukrainians would receive the aid they need to purchase additional defense equipment, and the EU would assist Ukraine without putting it under financial pressure.

While using frozen Russian assets in the EU for Ukraine aid may be an unprecedented action, it would also not be the first time perpetrators of war have been forced to pay retribution. Instead, history has shown that countries have been punished for their acts of aggression. In these cases, the perpetrators were told they would be responsible for rehabilitating and reconstructing post-war societies.

For example, following the conclusion of the First World War, Germany was forced to pay reparations to the Allied powers in Europe for its role in starting the global conflict. In this case, the Treaty of Versailles legally obligated the Germans to pay for the damage to the European continent caused by the war. Then, after the Second World War, the Germans were punished for the atrocities committed during the global conflict. As a result, Germany was ordered to pay reparations to Jewish families who were persecuted by the Nazis. Similarly, Japan was forced to pay war reparations to several Asian countries for its role in the Second World War.

These historical examples could serve as a guide for how the EU can proceed with using Russia’s frozen assets to aid Ukraine. They can also be used to explain the EU’s proposed plan on the matter with the Russian Federation.

“If the EU and its member states move swiftly to approve the current proposal to utilize frozen Russian assets as reparations loans to Ukraine, they could provide Kyiv with a game-changing infusion of billions in urgently needed funding for its security and rebuilding efforts. Coupled with new U.S. sanctions on Russia’s two largest oil companies, this effort in Brussels would send a signal that aggressors must pay, and that U.S. and European support for Ukraine–and the strength of the transatlantic partnership itself–is resolute,” Katz told me in an interview.

Transferring Frozen Russian Assets To Ukraine Would Be An Unprecedented Move

But there is much uncertainty surrounding the EU’s proposed deal to use frozen Russian assets to help Ukraine. Some elected officials, policymakers, and legal experts are concerned with this approach as it is unprecedented. Those who are hesitant say the EU would be the first to dictate how foreign assets can be seized and redistributed. If the EU proceeds, it could force foreign investors to withdraw their investments from Europe. This would negatively impact European financial markets and the strength of the euro.

“Most people agree that simply seizing [Russian] assets is not an option as it would set a disastrous precedent that could dramatically undermine the credibility of Western financial institutions,” Dickinson told me in an interview. “The big challenge now is to find a legal framework to do so.”

Aside from these financial concerns for the EU, using Russian frozen assets to help Ukraine could also set a precedent in which countries unfriendly to each other could seize each other’s foreign assets and use them for different purposes. For example, should the EU proceed with its plan, then the Russian Federation could retaliate by nationalizing the accounts of foreign depositories in Russia. The Russians could use these foreign depositories to help finance their invasion of Ukraine. Additionally, seized foreign depositories in Russia could be used to stimulate the Russian economy if Russia’s frozen assets in the EU are transferred to Ukraine, thereby negating the economic consequences of such an action.

Finally, Russia could engage in legal proceedings to try to block the EU’s attempts to use frozen Russian assets for Ukraine. This would result in lengthy, expensive court cases, as there is uncertainty about the legality of giving frozen Russian assets in the EU to Ukraine. According to the BBC, international law also explicitly states that “sovereign assets cannot be confiscated outright.” Thus, it is unclear how legal proceedings would unfold regarding the EU’s plan to use Russian frozen assets in the EU as aid to Ukraine.

In other words, there is significant uncertainty surrounding the EU’s discussions on using the $217 billion in Russian frozen assets for Ukraine. Supporters of the plan argue that Russia should be forced to pay Ukraine reparations as the Russian Federation is responsible for the war. Meanwhile, skeptics believe that it could lead to further tensions between the EU and the Russian Federation.

Now, both parties will anxiously watch to see how the EU progresses on its proposed deal to use Russian frozen assets, and what will become of the $217 billion. The outcome will not only impact the future of the Russia-Ukraine war, but also the relationship between the EU’s institutions and banks with other countries around the world.