Europe Moves to Use $232 Billion From Frozen Russian Assets to Fund Ukraine

The European Union is moving to use roughly $232 billion in frozen Russian central bank assets to secure sustainable funding for Ukraine as other financing sources wane. EU leaders aim to reach a political agreement at next week’s Brussels summit, after which the bloc’s executive will quickly draft a legal mechanism to release funds by mid-2026, Bloomberg reported on October 13.

The move comes as Europe shoulders increasing responsibility for Ukraine’s military and economic needs, with the US signaling it will no longer directly fund Kyiv’s weapons purchases. Ukrainian President Volodymyr Zelenskiy has urged European allies to accelerate financing, targeting $1 billion per month for weapons procurement from the US.

So far, six countries have contributed about $2 billion toward defense support packages last month via PURL initiative, according to Bloomberg.

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Under the EU plan, Ukraine would receive around $163 billion in new loans, repayable only if Russia compensates for war damages. The funds would remain blocked until then, with safeguards in place via Belgium-based clearinghouse Euroclear to address potential Russian legal claims.

The plan avoids outright seizure of assets, which Moscow has warned it would retaliate against, Bloomberg writes.

EU states are also negotiating the conditions for the loans, including allocation between military and civilian needs and sourcing of supplies. Coordination with G-7 allies is planned, leveraging some $300 billion in frozen assets.

Discussions this week will also cover additional sanctions on Russian energy revenues, while EU leaders seek consensus on the bloc’s new sanctions package, including a 2027 LNG import ban, Bloomberg reported.

Previously, Germany’s Rheinmetall stated that Ukraine will receive Skyranger 35 short-range air-defense systems mounted on Leopard 1 chassis, with the purchase to be financed by an EU member state using frozen Russian assets.

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