The European Union wants to provide a $160 billion loan to Ukraine using frozen Russian assets in Belgium. However, this plan has stalled due to concerns that Russia may sue the nation for its money back. Belgian officials are worried about being on the hook if Russia files a lawsuit or demands its savings. To mitigate this risk, they are asking other European nations to commit to taking on some of the burden through guarantees.
The EU Commission has proposed alternative options, including joint debt and direct grants from individual member states. However, these alternatives have problems, such as expensive interest costs and straining budgets of already-indebted nations. Policymakers, diplomats, and experts say that Plan B is less good than Plan A, but they are also aware that giving money to Ukraine is not an option.
The frozen asset loan plan offers advantages, including making a zero-interest loan to Ukraine that would need to be paid back only if Russia pays reparations. It would also provide a big cash infusion, demonstrating to the Kremlin that Ukraine has the funding to get through the war. However, some EU countries have been reluctant to offer reassurance, and Russia has issued warnings that it could come after Belgium if its assets are seized.
Time is running out for an agreement, with Ukraine’s budget gap estimated at $65 billion by 2026 and 2027. The International Monetary Fund has warned that giving up on the loan plan would be a “search for perfect or simple solutions which do not exist.” European leaders will face weeks of fierce negotiation to make the asset plan come through.
Source: https://www.nytimes.com/2025/11/17/world/europe/ukraine-russia-frozen-assets-european-union.html