By Jan Strupczewski, Reuters
This undated handout photograph released by the National Police of Ukraine on December 12, 2025 shows an aerial view of heavily damaged residential buildings and a church in the frontline town of Kostyantynivka, Donetsk region, amid the Russian invasion of Ukraine. Photo: AFP PHOTO / NATIONAL POLICE OF UKRAINE
The European Union looks set to indefinitely freeze Russian central bank assets held in Europe, removing a big obstacle to using the cash to help Ukraine defend itself against Russia.
The EU wants to keep Ukraine financed and fighting as it sees Russia's invasion as a threat to its own security. To do so, EU states aim to put to work some of the Russian sovereign assets they immobilised after Moscow's 2022 invasion of Ukraine.
A first big step, which EU governments aim to agree on by 1600 GMT, is to immobilise 210 billion euros (NZD$425b) worth of Russian sovereign assets for as long as needed instead of voting every six months on extending the asset freeze.
This would remove the risk that Hungary and Slovakia, which have better relations with Moscow than other EU states, could refuse to roll over the freeze at some point forcing the EU to return the money to Russia.
Planned load to Ukraine
The indefinite asset freeze is meant to help convince Belgium to support the EU's plan to use the frozen Russian cash to extend a loan of up to 165b euros to Ukraine to cover its military and civilian budget needs in 2026 and 2027.
The loan would be paid back by Ukraine only when Russia pays Kyiv war damages, making the loan effectively a grant that advances future Russian reparations payments.
EU leaders - the European Council - are to meet on 18 December to finalise the details of the reparations loan and resolve the remaining problems, which include guarantees from all EU governments for Belgium that it would not be left alone to foot the bill should a potential Moscow lawsuit prove successful.
Germany sees no alternative to the reparations loan and would provide 50b euros in guarantees out of the total, European diplomatic sources said.
Danish Finance Minister Stephanie Lose, whose country holds the rotating EU presidency, told reporters "some worries" still needed to be addressed but "hopefully we'll be able to pave the way towards a decision at the European Council next week".
European Commissioner for Economy Valdis Dombrovskis said solid guarantees were being put together for Belgium.
"From the Commission side, we are open to work further and see how to further accommodate Belgium's concerns, and this work is ongoing as we speak," he told a press conference.
Russian Central Bank says it's suing Euroclear
Hungarian Prime Minister Viktor Orban said on Facebook he believed the EU move to freeze Russian assets indefinitely via a qualified majority vote - requiring the support of 15 of the 27 member states representing 65 percent of the EU population - would cause irreparable damage to the EU.
Hungary would do all it could to "restore a lawful state of affairs," he said.
Russia's central bank said the EU plans to use its assets were illegal and reserved the right to use all available means to protect its interests, remarks shrugged off by Dombrovskis. The bank also said it was suing the Brussels-based central securities depository Euroclear - which holds 185b euros of the total assets frozen in Europe - in a Moscow court over what it said were damaging actions, affecting its ability to dispose of its funds and securities.
Belgium's Euroclear has been subject to Russian lawsuits in Moscow courts since the EU froze the assets in 2022.
European diplomats said it was vital to make sure the frozen assets stay under European control to give Europe leverage in peace talks and ensure neither Russia nor the United States could use them.
- Reuters