Countries urge EU to revive plan for frozen Russian assets to aid Ukraine

A group of EU member states has formally asked the European Commission to revive discussions on using frozen Russian central bank assets to help fund Ukraine’s defense needs. The letter, dated August 27, 2026, was signed by Sweden, the Netherlands, Spain, and Poland, and it arrives at a particularly uncomfortable moment for Brussels.

Ukraine is currently staring down a €23 billion shortfall in its defense budget, even after the EU agreed to a €90 billion loan package back in December 2025. That loan, notably, was structured without touching the principal of the frozen Russian reserves, a deliberate legal sidestep that is now looking increasingly inadequate.

Close to €210 billion in Russian central bank assets remain immobilized, the vast majority held at Euroclear in Belgium. These funds were frozen shortly after Russia’s full-scale invasion of Ukraine began in February 2022.

So far, the EU has taken a conservative approach. Rather than touching the principal, it has been siphoning off windfall profits generated by those idle assets. That strategy has produced €8 billion for Ukraine support to date, including €1.4 billion transferred as recently as August 2026.

The letter from the four countries stops well short of calling for outright confiscation, which would face serious legal challenges under international law. Instead, it requests that the Commission restart technical discussions on alternative frameworks for how these immobilized reserves could be put to work without crossing lines that could expose the EU to liability.

The main reason this conversation stalled in the first place is Belgium. Euroclear, which holds the bulk of the frozen assets, is headquartered in Brussels, and Belgian officials have consistently flagged concerns about potential legal and financial blowback from Moscow if the principal is touched. Russia has made clear it views any use of these assets as theft, and there are genuine questions about what legal recourse it might pursue through international arbitration or retaliatory measures against European investors holding Russian securities.

Belgium’s position has made it difficult for the Commission to move forward with more aggressive proposals, since any framework would need Belgian cooperation to be operationally viable. The four-country letter is, in part, a pressure campaign designed to shift that dynamic by building a visible coalition of member states who want action.

For Ukraine, the stakes are immediate. A €23 billion gap in the defense budget translates directly into decisions about ammunition supplies, equipment procurement, and the sustainability of military operations. The €90 billion loan agreed in December 2025 was presented as a significant show of European commitment, but if the underlying financing mechanisms cannot close the gap, the headline figure matters less than the delivery.

The Commission has not yet publicly responded to the August 27 letter, and it is not clear how quickly a formal reply or a new technical working group might materialize.