The plan to lend Ukraine from seized Russian assets is on the table at the EU summit today, with European officials optimistic that a political solution will be found.

The European Union is trying to draw up a plan for its continuation money supply and weapons in Ukraineat a time when US support is uncertain and Kiev’s needs are immense.

In today’s meeting, the leaders of 27 EU member states might adopt a innovative but at the same time dangerous ideawhich focuses on Russia’s assets, which have been frozen since Moscow launched the war in Ukraine in 2022.

The European Commission, the EU’s executive body, has presented a draft plan for the use of these earmarked funds in order to support a loan of 140 billion euros towards her Ukraine.

Today, political leaders will decide whether the Commission should submit a formal proposal to this end, although finalizing the final details and reaching an agreement could take months.

“We will take the political decision to ensure Ukraine’s financial needs for 2026 and 2027, including the acquisition of military equipment,” predicted Antonio Costa, president of the European Council, on Thursday morning, speaking on the sidelines of the summit.

If the 27 leaders decide to go ahead with the asset freeze plan, it will be the first step towards implementing the “compensation loan” to Ukraine.

However, there are great risks: possible retaliation from Russiawhile such a move can damage its reputation Europe as a safe haven for the foreign assets.

How the plan can be implemented

According to them New York Timesthe basic idea is to use the reserved funds as guarantee for a loan.

A large part of of pledged assets of the Russian government is in Eurocleara financial institution in Belgium. Europe is already funneling the interest earned on that deposit to Ukraine – about $8 billion last year.

Under the plan, Euroclear would effectively hand over control of Russia’s frozen funds to the European Union, which would use the money to back the massive loan to Ukraine. Ukraine will he must return the money only if he receives compensation from Russia.

This move involves political and financial riskwhile the question of the how the Kremlin will react.

The European Union argues that the arrangement is legalas money they will be borrowed and not confiscatedso Russia will, at some point in the future, be able to reclaim them.

However, a Kremlin spokesman recently stated that “this is theft” and warned that Russia could prosecute individuals and countries involved.

At the same time, Belgium, where the headquarters of Euroclear is located, fears that it will suffer them consequences of any legal or financial implications and insists that the risks must shared across Europe.

Critics of the plan have warned that using Russia’s assets could make other countries, such as China and India, to they are worried about their savings in European banksfearing that their own assets could also be frozen and used if they came into conflict with Europe.

“The plan is necessary, the fears are unfounded”

EU officials argue that the plan is necessary and that these fears are unfounded. “If you don’t start a war against another country, then your assets are not at risk”Kaya Kalas told reporters during her recent visit to Kyiv, where she discussed his country’s urgent fiscal needs with Ukrainian leader Volodymyr Zelensky.

As they downplay the risks, officials have too highlight the reasons why they consider the plan needed: the war continues, Ukraine faces not only huge ongoing costs, but also a significant budget deficit.

A big problem is that the American support has run out. From 2022 to the end of 2024, under the Biden administration, Congress allocated about $174 billion to fund Ukraine. However, under Trump’s presidency, US military aid to Ukraine has drastically reduced this yearand especially them in recent months it is almost non-existent.

European countries have provided significant assistance to Ukraine, but due to their own budget constraints, they are difficult to fill the void left by the US withdrawal.

In theory, a loan secured by the frozen Russian assets could make up that difference. However, as the key elements have not yet been determined, it is not clear whether it will exactly meet Ukraine’s needs or if you will fully fill the gap left by the US.

The questions

At the same time, there are other big unanswered questions, as it has not yet been decided exactly how it will be able to use or Ukraine the loan.

Some countries, such as Germany, proposed that the money be allocated to the arms supply. However, Zelensky himself has suggested that they be made available for others financial needs.

Others remain unsolved practical issues: European countries may provide loan guarantees to appease Belgium, but it is unclear how those guarantees will take shape. Will all 27 EU countries participate? Warranties will include real collateral?

Belgium wishes to support the plan and the G7, but it is not clear whether Washington will agree.

Finally, the EU executive must have a legal plan to ensure that the assets remain frozen for long period of time. If the commitment must be renewed regularlyas is the case today, a country more friendly to Russia—like Hungary—could cause chaos by refusing to keep funds frozen.

With such important questions remaining unanswered, today’s decision will be just the beginning. However, given the immediate needs that Ukraine hasfinding answers quickly is a priority.