EU leaders race to save Ukraine funding deal as Kyiv’s cash runs low | European Union

German Chancellor Friedrich Merz will meet European Commission president Ursula von der Leyen and Belgian prime minister Bart De Wever for urgent talks on Friday, as the EU tries to salvage its badly needed funding plan for Ukraine.

The three leaders will have a private dinner in Brussels, a German government spokesman said on Thursday, as Belgian officials continue to express strong opposition to the plan that involves the unprecedented use of frozen Russian assets.

With Russia’s attacks intensifying, Washington pushing for a peace deal favorable to Moscow and Kiev, money fast running out, and Europe scrambling to gain influence in US-led talks, the bloc needs to find a solution or its credibility will suffer a major blow.

Two weeks before a crucial EU summit on December 18, von der Leyen on Wednesday proposed two main options for the EU to raise the tens of billions of euros it needs to continue funding Ukraine’s military and essential services fighting Russia’s war.

The EU has promised to keep Ukraine afloat next year. Von der Leyen said Kyiv aims to raise €90bn (£80bn) to cover around two-thirds of its needs in 2026 and 2027, giving Ukraine the ability to negotiate a peace deal “from a position of strength”.

The commission chairman said the bloc could either borrow against its common budget on international markets or issue a loan secured by dormant Russian assets, mostly held in Belgium, that Kiev would repay from Russia’s post-war reparations.

However, there are obstacles to both alternatives. Many member states are not keen on joint borrowing that must be repaid. It will also require unanimity; This may be difficult given Hungary’s past opposition to funding Ukraine.

The frozen assets plan, floated almost two months ago, continues to be fiercely rejected by Belgium, home to nearly two-thirds of the estimated 290 billion euros of Russian assets held at Euroclear, a securities depository in Brussels in the west.

“This is a pretty big moment,” said a diplomat from one of the founding member states. “It’s never easy to reach an agreement at 27, we know that. But if we can’t do something existential like providing funding for Ukraine, we’ve truly failed – both us and Ukraine.”

The rationale for seizing assets, using them as collateral for a large loan to Ukraine (which most experts agree would be illegal), is that it shows Moscow that Ukraine can continue to fight for years and puts Kiev in a better negotiating position.

But De Wever’s government has repeatedly argued that it risks being trapped for billions of dollars if Russia decides to take retaliatory legal action or demand its money back as sanctions against it are lifted.

“We have a frustrating feeling that we are not being heard. The texts presented by the commission do not address our concerns satisfactorily,” Belgian foreign minister Maxime Prévot said on Wednesday, calling instead for joint borrowing from the EU.

Flemish nationalist De Wever went further. The Belgian prime minister said at an event in Brussels this week that it was “a good idea to steal from the bad guy and give it to the good guy. But stealing another country’s frozen assets has never been done.”

He added: “Even during the Second World War we did not confiscate Germany’s money. In war you freeze sovereign assets. And in the end the losing side has to give up all or some of those assets to compensate the winners.”

However, De Wever claimed that “to imagine that Russia would lose this war in Ukraine” was “a fairy tale, a complete illusion”. Moscow had “informed us that if the assets were seized, Belgium and I personally would feel the effects forever”.

The Commission insisted that the plan was fully compatible with EU and international law and that the “three-stage defence” would protect Belgium from legal dangers; von der Leyen and Merz are expected to make this claim at dinner on Friday evening.

In a column Writing in the Frankfurter Allgemeine Zeitung newspaper on Thursday, the German Chancellor warned EU leaders that the decisions they take in the coming days “will determine the question of European independence.”

Merz stated that “imperialist Russia is trying to expand its sphere of influence to European states” and is “militarily preparing for conflict with the West”, adding that it is vital to “send a clear signal to Moscow” using assets.

He said Belgium should be assured that the risks of the plan would be borne fairly by all EU member states and that each country “will receive an equal share of the risk as a function of their economic performance”.

He added that Europe must “decide and shape what will happen on our continent.” “The financial resources of the attacker were frozen in accordance with the law within the jurisdiction of our constitutional state. The decision we make now will determine the future of Europe.”