Four States Push Ukraine Loan Plan

For two years, the EU has been sending Ukraine the profits generated by Russia's frozen sovereign assets. Sweden, the Netherlands, Spain and Poland now want to move closer to the real money: using the €210bn principal as backing for new Ukraine finance (Reuters, Kyiv Independent). The distinction matters. Profits are income earned while the assets are blocked. Principal is the Russian state property itself.

The profits are already being used. The EU has transferred €8bn to Kyiv so far, including a €1.4bn tranche in August (EEAS). The reserves underneath remain immobilised under EU sanctions law, but legally untouched as property (Eur-Lex, Council Regulation 2022/334). The four governments are asking the Commission to reopen "new options" for mobilising those reserves. Since the profits have already been allocated, that can only mean finding a way to use the principal without calling it confiscation.

The gap the profits can't close

The four governments are not openly demanding that the EU seize Russian assets. Their letter points to a narrower route: a loan or collateral structure backed by the frozen reserves, while keeping formal ownership with Russia (Euronews, El País). In Brussels terms, that is the kind of legal engineering the EU often uses when politics cannot carry the direct version. But it would still take the bloc over a line it has so far avoided.

The numbers explain why the issue has returned. Annual windfall profits are roughly €2.5bn-€3bn, according to a French Senate report, and that stream falls every time the ECB cuts interest rates. Ukraine's financing need through the end of 2027 is estimated by the Commission at €90bn (Tagesschau). The argument from Stockholm, The Hague, Madrid and Warsaw is straightforward: Russia caused the damage, so Russia's blocked reserves should carry more of the cost before European taxpayers are asked to do so.

For Malta, this is not an abstract argument about wartime solidarity. A small eurozone state lives by the credibility of rules around money, sanctions and property. The same EU legal order that froze Russian reserves is also the one that regulates Malta's financial services sector, where assets are far larger than the domestic economy. Once the Union starts designing ways around ownership, even for a morally strong case, the precedent matters.

Who decides, and who carries the risk

The Commission can design the financial machinery, but governments decide whether it is used. EU foreign-policy decisions require unanimity, which means one member state can stop the whole plan. That gives Belgium unusual leverage, because about €193bn of the frozen Russian assets are held at Euroclear, the Brussels-based central securities depository that settles and holds securities for global investors (Trends-Tendances).

Belgium supports Ukraine, but it does not want to become the legal shock absorber for the rest of Europe. Le Monde reported roughly 200 legal procedures against Euroclear and nine arbitration notifications against Belgium itself (Le Monde). Russia is already putting pressure on the depository directly (Boursorama/AFP). German legal commentary has warned that even Russian court claims that cannot be enforced in Europe can widen the risk of retaliation against European assets held in Russia (beck-aktuell).

Sweden has offered to cover its share of Belgian guarantees (SVT). The Netherlands offered around €14bn in guarantees during December's failed attempt to build an asset-backed structure (NOS). Belgium still blocked the plan, and the discussion was put aside.

Paris and Berlin set the limits

France and Germany accept using the profits and can see the attraction of a larger financing structure. They will not accept outright confiscation of sovereign property. The Bundestag rejected a Green motion to make frozen Russian assets fully available to Ukraine (Bundestag). France's Senate committee made support conditional on compliance with international law and on protecting investor confidence in euro-denominated assets (Sénat).

That position limits what the Commission can place on the table. A viable plan would have to leave the reserves legally in Russia's name, shield Belgium from carrying the lawsuits alone, and reassure investors that Europe is not turning foreign-held reserves into a political instrument. No proposal has yet satisfied all three tests.

The four signatories have identified the weakness in the profits-only model: it cannot meet Ukraine's financing needs. What they have not yet answered is the part that matters in the Council room: who indemnifies Euroclear, who absorbs Russian retaliation, and who guarantees the structure if a future EU Council votes to lift sanctions and the reserves have to be returned. Until those liabilities are signed for, the €210bn will remain frozen, useful as leverage but not yet as money.