Europe has been left scrambling to find ways to boost defense spending and continue the flow of support to Ukraine after U.S. President Donald Trump made clear the continent won't be able to rely on Washington for its long-term security needs.
The latest reports suggest that EU officials are considering loosening fiscal rules to free up at least 160 billion euros ($168 billion), which could be used to create a joint EU instrument for defense investment.
But there is, potentially, an even bigger sum sitting right under their noses — the $198 billion in Russian central bank reserves, currently frozen in Belgium. The EU, along with G7 countries, holds a total of more than $300 billion in frozen Russian assets.
Interest from the frozen funds has been agreed to be used to cover the $50 billion loan pledged to Ukraine by the G7. However, some European countries are eager to use the funds more aggressively, offer more financial and military support to Ukraine, or fund the country's reconstruction.
Yet figuring out exactly how this can be done, or if it should be done, still divides the continent.
Option 1: Keep calm and carry on
One option would be to continue using the profits generated by the assets to support Ukraine's war effort, a move that at one point was unprecedented.
"It was the first time in history that we faced this situation," an EU official told the Kyiv Independent on condition of anonymity.
"Having a huge amount, (nearly) $200 billion, of Russian immobilized assets in Belgium — there was no legal text, no jurisprudence, no precedent."
Belgian and European lawyers worked to figure out if the profits generated by the assets could be seized and given to Ukraine. It took months, but they found a way.
"It's already quite something that we are using Russian money for Ukraine to buy weapons," the official added.
Since July 2024, profits from these assets have already been used by the European Commission and G7 countries to give Ukraine around $4.7 billion in support so far.
Crucially, the legality of this move has not been successfully challenged. While the sums generated by these profits are a fraction of the total amount of frozen assets, this method provides Ukraine with reliable and consistent funds.
What's more, this has broad support from EU member states and G7 countries, which can't be said of the other ways in which Russia's assets might be used.
Kate Tsurkan
Option 2: Full seizure
EU nations could also seize the entirety of Russia's assets across Europe and redirect the money to Ukraine or shore up their own spending. It would be a dramatic move and hugely consequential for Ukraine.
Though the chances of it happening are slim, it does have some support.
"Estonia has been pushing for seizing Russia's immobilized state assets for the benefit of Ukraine since the beginning of the full-scale war," the country's Foreign Minister, Margus Tsahkna, told the Kyiv Independent.
"The decision to use the windfall profits was a step in the right direction. I see that the time is ripe now to take the next step. The EU must start a serious discussion that would lead to the decision to mobilize the bulk of Russia's sovereign assets."
"Enough talking, it's time to act! Let's finance our aid for Ukraine from the Russian frozen assets."
Polish Prime Minister Donald Tusk also expressed his support for the idea in a post on X on Feb. 20.
"Enough talking, it's time to act! Let's finance our aid for Ukraine from the Russian frozen assets," he said.
Despite these calls, it almost certainly won't happen.
"It is very clear that legally you cannot do it," an EU official told the Kyiv Independent, adding: "Every financial institution, the European Central Bank, the European Commission, will tell you that."
While the move would be legally dubious, some suggest it could also be strategically reckless.
"If we decide to take that step, we are playing Russia's game," the EU official said.
"We risk neglecting the international laws and rules that we have established to turn them into our advantage. I can imagine that in Ukraine especially, it can be very frustrating to see all that money sitting in Europe that cannot be seized.
"But we really need to resist the temptation because otherwise, we're turning our backs on the very principles and values that we are all fighting for, that Ukraine is fighting for most of all."
French President Emmanuel Macron has also expressed skepticism. Sat next to Trump in the Oval Office on Feb. 24, the French leader said Russia's assets "are not our belongings, so they are frozen." implying that a full seizure would be unacceptable.
Belgium, where the assets are currently frozen, has also opposed a full seizure because of what it sees as shaky legal justification, and a weakening of Ukraine's hand in future peace negotiations.
"Whenever peace negotiations take place, having these frozen assets will be massive leverage for Ukraine," the EU diplomat said.
"If we spend them now, Ukraine will be at the negotiating table with less leverage than it could have had. Our hope is that Russia will have to compensate Ukraine and repay Ukraine for all the atrocities committed and all the destruction."
Francis Farrell
Option 3: Post-war insurance
A newer option being considered by European leaders is to hold Russia's billions as collateral to ensure Moscow pays compensation to Ukraine if and when a peace deal is agreed.
Negotiations on exactly how this might work are ongoing among European leaders, and the timeline for when this might happen remains unclear, but experts say it can be done legally.
Frédéric Dopagne, professor of Public International Law at Belgian UCLouvain University, told the Kyiv Independent that Russia's war against Ukraine constitutes a "serious violation of a fundamental rule of international law, the prohibition of aggression."
"All states are entitled to take countermeasures to ensure the cessation of the violation and reparation of damages in the interest of Ukraine," he added.
Dopagne says that although there is limited precedent for this, he sees no major impediment to such a move under international law, adding that "Russia itself has engaged in such patterns of unilateral confiscations of foreign sovereign property for war damages in recent years."
This means that should Russia fail to pay sufficient damages to Ukraine for the death and destruction caused by the full-scale invasion, European nations could seize the frozen billions to make up for any shortfall.
This option will, however, be down to political will in Europe, and for now, the EU's top diplomat, Kaja Kallas, says there is no path to a deal on this.
Baltic and Nordic countries, as well as Poland could support the move, but a number of other European countries still haven't taken a clear stance.
Crucially, Belgian officials told the Kyiv Independent that they don't rule out the idea of using Russian assets as collateral in a post-peace compensation deal. However, they would need to be certain that any deal is legally watertight.
Other EU countries will almost certainly want similar assurances, a process which could take months.
Of all the potential options, diplomats and legal experts behind the scenes say this could be the most viable, but exactly when it could be put into practice remains unclear.
So what now?
European leaders have shown a willingness to explore ways of using Russia's frozen billions to help Ukraine, and continue to use the profits they generate to fund Kyiv's war effort in the meantime.
The options available to them, however, have either been dismissed outright, or mean wading through uncharted legal waters and complex political wranglings.
A determinant factor will be the negotiations between Russia and the U.S. on how to end Moscow's war of aggression in Ukraine — negotiations in which Washington has been reluctant to include its Ukrainian and European allies.
Whatever the outcome of those negotiations and decisions made in European capitals, using more of Russia's assets in support of Ukraine, if it happens at all, will almost certainly take months.
Dominic Culverwell
