Sweden, the Netherlands, Spain, and Poland have formally pressed the European Commission to restart work on tapping immobilized Russian central bank assets. According to a draft letter seen by the Kyiv Independent on August 26, the coalition of foreign ministers requested that the topic take center stage at an informal meeting in Ireland on September 1-2. The initiative marks a renewed effort to secure predictable, long-term financing for Kyiv without shifting the entire economic burden onto European taxpayers. A letter from a coalition of states to the European Commission will call on the EU’s executive to restart work on plans to fund Ukraine using Russian central bank assets, the Financial Times reported, citing four people briefed on the document. The draft letter hails the EU’s April 2026 approval of a 90 billion euro ($105 billion) support loan to Ukraine—intended to cover two-thirds of Kyiv’s total financial needs until the end of 2027—as a significant milestone, before pointing out we are all aware it will not be enough.
The €200 Billion Pool and the Search for Alternative Mechanisms
In 2022, when Russia invaded Ukraine, nearly €300 billion ($347 billion) of its assets were lying outside Russia and were frozen as a result of Western sanctions, including bank accounts, securities, real estate, and yachts. While many countries hold these assets, including the United States, Canada, the UK, and Japan, the largest chunk lies in EU member countries, and the largest of all in Belgium. The Financial Times has learned that Sweden, the Netherlands, Spain, and Poland plan to urge the European Commission to resume work on a mechanism that would enable more than €200 billion in frozen Russian assets to be used to provide funding for Ukraine.
Plans to provide Ukraine with funding from over €200 billion in Russian Central Bank assets held in the EU as part of sanctions fell through last winter after Belgium, where most of the assets are held, blocked the initiative. A letter from the coalition of countries will call on the European Commission to resume work on the idea and seek an update on progress in the development of alternative legal and technical mechanisms that could circumvent Belgium’s veto, four people familiar with the document told the FT. One source described the initiative as a call for the European Commission to carry out the technical work needed to make use of these assets and ease Kyiv’s budgetary needs. The letter is expected to be sent on Thursday, August 27, and lists the foreign ministers of the Netherlands, Poland, and Spain as co-signatories alongside Sweden.
“Now is the time to start a new discussion about how we can make further use of Russia’s frozen assets for Ukraine’s, and our, benefit.”
Maria Malmer Stenergard, Swedish Foreign Minister
Budget Shortfalls and the Limits of Existing Loans
The urgency behind the renewed push stems from severe looming deficits. The remaining third of Ukraine’s budgetary needs remains unfilled, which prompted President Volodymyr Zelenskyy on August 24 to call for more financial support by the end of the year, and the European Commission to urge allied countries to also contribute. As Kyiv is doing everything it can to protect its cities from Russian missile attacks, EU capitals are increasingly concerned that Ukraine will need additional funding beyond the €90 billion loan backed by the EU’s budget.
“The €90bn loan is a manifestation of the EU’s commitment to support Ukraine, but it is clearly not enough.”
Photo: Courthousenews
Maria Malmer Stenergard, Swedish Foreign Minister
President Volodymyr Zelenskyy and First Lady Olena Zelenska welcomed Swedish Foreign Minister Maria Malmer Stenergard during the official celebration of the 35th anniversary of the restoration of Ukraine’s independence in Sofiiska Square, Kyiv, Ukraine, on August 24, 2026. This budgetary squeeze coincides with intense debate over the bloc’s financial architecture, exposing a split between wealthier northern countries like Germany and the Netherlands, who want to use Russian assets, and more indebted southern countries like Italy and France who would prefer the EU to borrow money jointly.
At the center of the mechanical stalemate is Euroclear, a Brussels-based financial depository that holds roughly €180 billion in frozen Russian assets. Belgium still has the same concerns it raised last year, fearing legal retaliation from Russia and warning of risks to financial markets if sovereign assets are used. Belgium fears legal troubles and that it may be the one Russia will eventually ask for.
Photo: DW
As the talks wore on, European Union leaders remained locked in negotiations very early Friday morning, struggling to overcome Belgian resistance to a 210 billion-euro ($220 billion) plan to finance Ukraine with frozen Russian assets as divisions over Europe’s post-American security architecture threatened to derail the bloc’s most consequential decision in years. With European Union leaders struggling to overcome Belgian resistance, leaders increasingly turned toward Plan B: joint EU borrowing, with the Russian assets question shelved for now. The emerging solution would carve out Hungary, Czechia, and Slovakia — the three countries opposing further Ukraine aid — from the joint debt scheme so the remaining 24 countries could borrow together.
Washington’s Pressure and the Geopolitical Tug-of-War
Complicating the European debate are outside pressures from the United States. Europeans are seething over US President Donald Trump’s suggestion that billions in Russian assets frozen in European countries may be used to the benefit of the US government and firms. After a Trump proposal on how to end Russia’s war in Ukraine that called on Ukraine to give up territory and reduce the size of its armed forces, Europeans rushed to damage control and have now floated a counteroffer.
Photo: YahooPhoto: Reuters
Every day with input it changes, Secretary of State Marco Rubio said after meeting the Europeans on the sidelines of negotiations in Geneva. But it is unclear if they will succeed in retaining control over how Russian frozen assets are spent. Agathe Demarais, a senior policy fellow for geoeconomics at the European Council on Foreign Relations (ECFR), noted that billions in Russian assets appear to be Trump’s key motivation in pushing for a deal, telling DW that Trump is extremely keen to get the billions. Furthermore, the Trump administration has been actively pushing European countries to abandon the frozen assets plan, with Trump’s peace proposal suggesting Washington and Moscow would jointly decide the funds’ fate — effectively cutting Europe out of the decision and exposing deeper divides within Europe over how to pay for Ukraine’s defense.
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Omar El Sayed is Archyde’s World Editor, focused on international affairs, diplomacy, conflict, and cross-border political developments. He brings a global newsroom perspective to complex events and helps readers understand how regional stories connect to wider geopolitical shifts.
