EU Desperate to Find a Way to Use Frozen Russian Assets to Fund Ukraine

Conservative  Treehouse 

Volodymyr Zelenskyy is huddled with European Leaders at the European Council meeting in Brussels.  The key effort by the assembly is how to use frozen Russian assets to give money to Ukraine.

The EU itself does not want to lend Ukraine money directly because people within each nation of the EU assembly do not support giving Ukraine more money.  The issue reflects a political disconnect where the EU leaders want to give money that the EU citizens do not support giving.

As a result, the only viable option is for the EU to find a mechanism where seized Russian assets can be disbursed or used as collateral for payments to Ukraine.  However, some member states like Hungary, Italy and Belgium are refusing to cooperate with the seizure of the Russian sovereign wealth fund.  The problem for Zelenskyy and his friends is simply that without money wars cannot continue.

As noted by Decentralized Media: “What is unfolding in Europe reads less like miscalculation and more like controlled demolition operation. The freezing—and now effective seizure—of Russian-linked assets at Euroclear is not simply a sanction gone too far. It is a deliberate trigger in a broader effort to collapse the European Union’s existing financial architecture and, with it, the London-centered banking cartel that has dominated global capital flows for decades.

That process accelerates the moment Donald Trump removes the United States as the EU’s financial backstop.

Trump’s decision to defund and condition U.S. support for Ukraine did not merely pressure Kyiv. More importantly, his insistence on pursuing a negotiated settlement between Ukraine and Russia threatened to end the war on terms that would devastate European interests. It forced Europe to confront a war it could not afford and a system it could no longer sustain. Without Washington underwriting the conflict, Brussels faced a stark choice: accept a negotiated peace and a financial reckoning or prolong the war long enough to extract what value it could from the system before collapse.

Europe chose the latter.

The Russian assets frozen in 2022 were never meant to be spent. They were never supposed to survive a peace deal. They were leverage—political theater designed to signal resolve while assuming eventual American rescue. But when Trump pulled the plug, those frozen funds became the only available war chest. The moment Europe reached for them; the collapse became inevitable. (read more)

President Trump has told the EU the frozen Russian assets should be used as part of the negotiation for a ceasefire.  If the EU announces permanent confiscation of the assets the leverage is lost.

The EU could borrow the needed money against the security of the EU budget and then lend the money to Ukraine.  However, such a move requires unanimity among the 27 EU countries, Hungary and Italy already said they would veto it.

If the EU is not going to accept peace, the only option they have left is to collateralize the Russian assets and loan the money to Ukraine.