Artículo IISS Online Analysis, 17.01.2026 Nigel Gould-Davies, exembajador y académico británico (IISS/RUSI)
If Europe fails to agree a plan to fund Ukraine using frozen Russian assets, the consequences for its security and credibility will be far-reaching.
Tomorrow, the European Council meets to discuss a ‘Reparations Loan’ of up to €210 billions for Ukraine. The loan would use Russian Central Bank assets immobilised in European financial systems since February 2022. ‘Use’ does not mean ‘seize’. The European Union would lend the cash proceeds from maturing Russian assets to Ukraine, and return the funds if Russia pays the compensation it owes Ukraine under international law for its illegal war.
This issue is fundamental. Ukraine’s immediate need is not manpower or materiel, but money. If a looming funding gap of €136bn is not filled, the country faces a financial crisis that will imperil its defence. This, in turn, will jeopardise the security and credibility of the continent. Why should Europe not avert this by lending the aggressor’s money to the victim? Opponents offer three reasons against doing so.
Possible retaliation
The first is legal. Sceptics fear that Russia could sue Europe – particularly Belgium, where most of the Russian assets are held – for compensation of its own. This risk has been scrutinised in forensic detail and found to be minimal, not least because there is no clear jurisdiction to hear such a claim. The Russian Central Bank’s filing of a compensation claim in an obedient Moscow court in early December merely confirms this.
Fear of legal consequences also rests on a grotesque irony. Russia has violated basic norms of international law in waging an unprovoked war, and has failed to honour adverse arbitral rulings in commercial cases involving Ukrainian and EU companies. Despite such disregard for the principles and conduct of international law, Russia now seeks to exploit this law to prevent Europe from protecting a victim.
The second concern is financial. Some argue that using Russia’s money could damage the confidence of other investors in Europe, thus weakening the euro and jeopardising debt financing. Yet the immobilising of Russia’s assets had no such effect. Nor did a loan scheme to Ukraine backed by interest income on the assets – the 2024 ‘Extraordinary Revenue Acceleration’ – produce an adverse market reaction. There is no reason to believe that lending money to Ukraine – a move that would have no impact on Russia as a depositor, only Russia as an aggressor – would now do so. If, against logic, it threatened to do so, the EU has mechanisms to manage this.
The third concern is Russian retaliation. As European debates have sharpened, Moscow has not only threatened to seize Western assets but stoked fears of aggression and even war. Belgian Prime Minister Bart de Wever, who has led opposition to the EU plan, fears ‘personally’ for his safety and that of the management of Euroclear (the securities depository that holds most of the Russian assets). Defence sources have linked recent disruptive drone activity across Belgium to Russian intimidation over the assets issue.
Key moment
Such threats are not new. They are escalating an established campaign of hybrid, cyber and cognitive warfare across Europe that will continue regardless of decisions reached in Brussels. Indeed, a failure to agree on the assets issue will only embolden Russia to press harder. To fear escalation is to invite it.
To govern is to choose. Policymakers must weigh all the consequences of action against those of inaction. The benefits of saving Ukraine from a fiscal crisis are very high and the risks are low. The risks of not doing so – a severely weakened, possibly defeated, Ukraine – can hardly be overstated. They extend far beyond Ukraine. As German Chancellor Friedrich Merz noted on 15 December, Europe would be ‘severely damaged for years, if not for a longer period’ if it fails to act. This would signal profound systemic weakness – specifically, that a divided Europe can be intimidated by legal threats from a serial violator of international law; by financial fears of acting against an economy over ten times smaller; and by aggressive threats from an adversary that already sees itself as de facto at war with Europe.
If Europe cannot find a way to use Russia’s money to help Ukraine, what is the hope that it can provide credible security guarantees for Ukraine against Russia? Such guarantees are key to ending the war. Failure in Brussels this week would secure a perception of weakness that could be fateful, and perhaps fatal
