Zelensky gives stark warning as EU leaders start crunch talks on Russia's frozen cash

Volodymyr Zelensky is urging European Union leaders gathered in Brussels for a critical summit to authorise a multi-billion euro loan using frozen Russian assets to fund Ukraine's military and economic needs.

The majority of Russia's €210bn (£185bn) in assets within the EU are held by the Belgium-based clearing house Euroclear. So far, Belgium and other EU members have opposed using the capital principal as a "reparations loan" due to legal and financial risks.

Russia has warned the EU not to touch its funds, but without a financial boost, Ukraine's budget is expected to run dry in a matter of months.

"I hope we will get a positive decision," Zelensky told reporters. "Without this, Ukraine will face a major problem."

A Critical Moment

The summit takes place at a pivotal moment in the war, with Russia having filed a lawsuit against Euroclear in a Moscow court in an attempt to recover its money. One European government official described the mood as "cautiously optimistic, not overly optimistic."

European Commission President Ursula von der Leyen insisted: "We will not leave the summit without a solution."

However, all eyes are on Belgian Prime Minister Bart De Wever, who told the Belgian parliament on Thursday: "I haven't yet seen any text that will compel me to change Belgium's position."

Meanwhile, US President Donald Trump has stated that a deal to end the conflict is "closer than ever." According to AFP, US and Russian officials are set to meet in Miami this weekend for further talks. Reports suggest Kremlin envoy Kirill Dmitriev will consult with Trump’s envoys, Steve Witkoff and Jared Kushner.

While Zelensky is in Brussels, other Ukrainian officials are heading to the US. Zelensky stated that Kyiv needs the funds either to defend its troops if the war continues or to direct them entirely towards recovery.

"European Piglets"

Russia has not officially responded to the latest peace plans, but the Kremlin has reiterated that it will not accept a US-backed, European-led multinational force in Ukraine.

On Wednesday, President Vladimir Putin expressed his disdain for Europe, claiming the continent was in a state of "complete destruction" and referring to Ukraine's allies as "European piglets"—a derogatory term for those hoping to profit from Russia's assets.

The European Commission has proposed loaning Kyiv approximately €90bn (£79bn) over the next two years, leveraging the frozen Russian capital. This covers about two-thirds of the €137bn Kyiv is expected to need through 2026 and 2027. Currently, the EU has only paid Ukraine the interest earned on the frozen funds, not the capital itself.

"This is a critical moment for Ukraine to keep fighting for the next year," a Finnish government official said. "There are obviously peace talks, but this gives Ukraine leverage to say, 'We're not impoverished and we have the funds to continue fighting.'"

Legal and Financial Hurdles

German Chancellor Friedrich Merz has played a leading role in calling for the use of the Russian assets, telling the Bundestag on the eve of the summit that it was about giving Moscow a "clear signal."

However, significant opposition remains:

• Belgium: Defence Minister Theo Francken warned that lending the Euroclear cash could be a "big mistake." Rating agency Fitch has already placed Euroclear on 'negative watch' due to the proposals.

   
   

• Hungary & Slovakia: Viktor Orbán remains the biggest challenger, with his entourage suggesting the plan had been pulled from the agenda (a claim denied by the Commission). Slovakia's Robert Fico stated the funds should not be used for arms.

   

• Italy: Prime Minister Giorgia Meloni told MPs she would only accept the deal "if the legal basis is solid," warning that a legal failure would give Russia "its first real victory."

   

Another option involves the EU borrowing money on international markets using the EU budget as collateral, but this requires a unanimous vote—something Hungary has vowed to block.

If a vote on the frozen assets goes ahead, it requires a qualified majority (15 member states representing 65% of the EU population). However, European Council President António Costa promised not to override the host nation.

"We're not going to vote against Belgium," Costa told Belgian public radio RTBF. "We'll continue to work really closely with the Belgian government because we don't want to approve anything that may not be acceptable for them."

Commission officials remain confident that the only way for Russia to recover its funds is by paying reparations to Ukraine, which would effectively repay the loan to the EU. However, Belgium fears a worst-case scenario where a court orders it to return the money to Russia before reparations are settled.