The United States has informed Europe that it will not join the European Union’s plan to use frozen Russian assets to support Ukraine, Bloomberg reported, citing sources.
The announcement came during negotiations on the sidelines of last week’s International Monetary Fund meeting in Washington. U.S. officials cited risks to market stability and, according to another source, are avoiding obligations at this stage.
The EU Proposal
The EU plan involves using frozen Russian central bank assets as collateral to secure loans worth up to €140 billion for Ukraine. The European Commission is preparing a detailed draft but will only publish it after EU leaders approve it, likely at a summit in Brussels later this week.
EU and UK officials are confident that a proposal to lend Ukraine €140 billion can be agreed on by year-end. This funding is considered critical for Kyiv’s defense efforts.
International Reactions
Poland’s Foreign Minister Radosław Sikorski said last week:
“Either we use the aggressor’s money, or we will have to use our own. Don’t ask me which I prefer.”
The UK finance minister Rachel Reeves stressed that the plan must remain legally and financially responsible, with G7 countries collectively underwriting the scheme to reassure Belgium, where most of the frozen Russian assets are held.
Legal and Political Challenges
The EU aims to use a little-known treaty mechanism to prevent a single country, such as Hungary, from vetoing the renewal of EU sanctions that freeze Russian assets. However, Council of Ministers lawyers remain skeptical about the legality of switching from unanimous to majority voting.
Germany recently shifted position. Chancellor Friedrich Merz supports a reparations-style loan from frozen assets to fund military aid. France and Germany previously resisted using the principal of the assets, fearing eurozone instability.
Ukraine’s Funding Needs
Ukraine’s government has reported an annual budget deficit due to ongoing conflict. The country estimates it will need $50 billion in external support for 2026, with urgent funds required from April onward for the war effort.
The EU currently channels profits generated by frozen Russian assets to Ukraine, aiming for €45 billion, but the underlying capital remains largely untapped.
