Tectonic change in Europe. A key decision on the future of Ukraine is approaching. Putin has reasons to be afraid
European countries feared that a bold step towards Russia would scare away the resources of other, more powerful autocracies such as China or Saudi Arabia from Europe. However, the current resistance in the EU is breaking down.
If this controversial proposal is adopted, it could free up as much as €140 billion to finance Ukraine's war efforts over the next two to three years. POLITICO reveals the behind-the-scenes of the highest-stakes game currently taking place in Brussels.
EU leaders intend to instruct the European Commission to draw up a legal proposal to use billions of euros of Russia's frozen state assets to finance a huge loan to Ukraine, after Belgium signaled it would not oppose it. This concerns Russian state assets that were frozen after Russia's full invasion of Ukraine in February 2022.
According to POLITICO, Belgium will agree to the Commission's presentation of a legal proposal regarding a loan for Ukraine in the amount of EUR 140 billion.
The European Commission, which exercises executive power in the EU, first presented the idea in September but was waiting for explicit consent from European heads of state and government before developing a concrete proposal. This will probably happen during the European Council meeting in Brussels on Thursday (October 23), which will be attended by 27 EU leaders.
In preparation for the meeting, EU ambassadors informally agreed on draft European Council conclusions, seen by POLITICO. He calls on the Commission to present a proposal “based on appropriate European solidarity and risk sharing”.
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The Belgian diplomat told POLITICO that this text constitutes “political consent” for the Commission to present the proposal after Thursday's meeting. — I'm not too worried about Belgium creating problems in the European Council, an EU diplomat from another EU country repeated to POLITICO.
Belgium has taken a cautious approach because is the headquarters of Euroclear, a financial institution that holds frozen assets. The country fears that the court may force it to independently return the Russian money transferred to Ukraine. However, a Belgian diplomat told POLITICO that the country would not oppose Thursday's call on the Commission to present a proposal.
Even if the Commission receives the green light, its legal proposal will have to survive weeks of difficult negotiations with member state capitals.
The decisive moment
For Ukraine, the result of this game may prove decisive. Without the EU loan, Ukraine will face a budget deficit of $60 billion. (approx. PLN 218 580 million) over the next two years. With the United States effectively withdrawing its reliable support for the war-torn country, European officials are privately describing the initiative as a “last chance” to strengthen Kiev's position in peace talks with Russia.
It came as Washington's inconsistent stance on the conflict appeared to tip in Russia's favor over the weekend.
Securing a multi-billion-dollar “reparations loan” for Ukraine ahead of the meeting between US President Donald Trump and Russian President Vladimir Putin in Budapest in the coming weeks would be a major boost for Kiev, undermining attempts to force it to make painful territorial concessions to Moscow.
Vladimir Putin and Donald Trump in Alaska, August 15, 2025 (illustrative photo)Andrew Harnik / Staff / Getty Images
“The Russians are counting on our war fatigue, but a reparations loan could show Russia that Ukraine will be financially stable for the next two or three years,” said a diplomat from an EU country who, like others quoted in this article, was granted anonymity to speak freely on the subject.
Belgium's red lines
The commission is confident it can come up with a plan that complies with the law and avoids accusations of expropriating Russian assets, according to officials briefed on the matter.
The assets held by Euroclear are invested in Western government bonds that have been converted into cash. The cash is currently held in a deposit account with the European Central Bank. The Commission wants to transfer this money to Ukraine.
Brussels says this does not amount to confiscation of Russian funds because Russia can still recover the frozen assets by paying post-war compensation to Ukraine – but this is seen as very unlikely.
So that this plan can be implementedthe Commission will still have to convince the right-wing Prime Minister of Belgium, Bart De Wever — known for his blunt comments — to agree to grant a loan.
The country fears it may be forced to repay the loan if a court ruling obliges the EU to return the money to Russia. The Commission considered this scenario to be very unlikely because the rulings of Russian courts would not have enforcement force in Europe.
Separately, the Commission presented in an informal document on Thursday, October 16, a number of concessions aimed at alleviating Belgium's concerns. The Belgian diplomat told POLITICO that these guarantees are “too general and do not answer all the questions” raised by De Wever in his previous statement.
In order to avoid focusing solely on the Euroclear issue, the Commission said it would consider using EUR 25 billion (almost PLN 106 billion at current exchange rates) of Russian assets held in bank accounts and deposits elsewhere in the EU, but admitted that the operation was legally difficult.
Belgium fears that investors from countries such as China will withdraw their investments from Euroclear for fear that their funds will also be taken away for political reasons.
In a further concession, the EU executive has proposed creating a safety net that would allow the Commission to immediately lend money to countries if they ever need to repay the loan.
This is to ensure that Belgium is not left to its own devices and that, in a worst-case scenario, other EU countries will contribute.
Even without Belgium's final consent on Thursday, October 23, the Commission could still present a legislative proposal after the leaders' meeting.
“Belgium has presented a maximalist position to reach a compromise when there is a proposal,” one EU diplomat told POLITICO.
