Home › Security › Why the EU chose a loan over frozen assets
Why the EU chose a loan over frozen assets
Summary
A retrospective on the 19 December 2025 decision to fund Ukraine from the EU's own budget rather than from immobilised Russian central bank money.
What did it mean when the European Union agreed on 19 December 2025 to lend Ukraine €90 billion (US$105 billion) from its internal budget? The decision came after the bloc failed to use frozen Russian assets for the purpose.
The route chosen was a notable one. Within days of Russia's full-scale invasion in February 2022, Western countries froze Russian central bank funds held in their jurisdictions. Proposals followed to confiscate those assets permanently and use them to pay for Ukraine's reconstruction. As of late 2025, the legality of such expropriation remained untested and heavily disputed. The EU's agreement on 19 December 2025 showed that the bloc had not been able to turn that idea into a funding mechanism and instead drew on its own budget.
A parallel move in Moscow
Two days earlier, on 17 December 2025, Russian president Vladimir Putin signed a law to redistribute ownerless homes in occupied territories to people who had lost their homes during the conflict. The measure was unrelated to the EU's financing decision, but it was another example of how the war's consequences were being handled through state decisions on property.
What the decision settled
The loan gave Ukraine a financing commitment backed by the EU budget. The frozen Russian assets were not used for it. The question of whether those assets could be confiscated remained open, with the legal dispute unresolved.
