- - Europe salvages credibility with last-minute $105 billion funding deal on Ukraine

Analysis by Joseph Ataman, Clare Sebastian, CNNDecember 19, 2025 at 12:09 AM

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Paramedics receive an injured Ukrainian serviceman who stepped on an anti-personnel land mine near the frontline in the Donetsk region on January 29, 2023 - Yasuyoshi Chiba/AFP/Getty Images

Europe’s 90-billion-euro ($105 billion) interest-free loan to keep Ukraine’s economy and military from a budgetary blackhole through 2027 didn’t come about in the way some leaders wanted, but the fact it came about at all is a win for the bloc.

“Had we left Brussels divided today, Europe would have walked away from geopolitical relevance,” Belgian Prime Minister Bart De Wever told reporters a little before 4 a.m.

“It would have been a total disaster.”

Leaders of the European Union’s 27 member states failed to agree to a historic loan using frozen Russian state funds, but the compromise was clear. Ukraine wouldn’t pay back a cent until the war ended, and Europe reserved the right to use Russian assets to fund the loan.

The bloc’s executive arm now has a mandate to explore how to do this.

And for now, the funds unlocked by the loan will be welcomed in Kyiv as it battles to hold off Russian battlefield gains while negotiating with Washington over a peace plan to end the war.

Ukrainian President Volodymyr Zelensky had warned that a failure to provide finding for Ukraine would leave Kyiv in a position where the country would not have enough money “for life and weapons.”

He hailed the 11th-hour breakthrough on Friday.

“This is significant support that truly strengthens our resilience,” he Zelensky wrote on X. “It is important that Russian assets remain immobilized and that Ukraine has received a financial security guarantee for the coming years. Thank you for the result and for unity.”

European leaders also took aim at Moscow.

“The message we are sending to Russia today is crystal clear. First, you have not achieved your objectives in Ukraine. Second, Europe stands with Ukraine, today, tomorrow and as long as necessary,” European Council President Antonio Costa said.

Due in part to the United States cutting funding, Ukraine would have had a funding gap of $160 billion (€137 billion) over the next two years, according to forecasts by the International Monetary Fund. The EU was looking to meet two-thirds of that, or about $105 billion (€90 billion).

The idea of using frozen assets isn’t a new one. It was floated from the early days of Russia’s 2022 invasion of Ukraine.

And it’s long seen fierce opposition from some European powers. France’s President Macron in the Oval Office in February declared the idea of touching Russia’s state funds as a breach of international law.

This week, he cheered on the European move as all-important “visibility” for Ukraine on its budget.

As with so much regarding Western support for Ukraine, yet another red line has fallen.

This photograph taken in Brussels on March 5, 2025, shows the building housing "Euroclear", an international fund depository based in Belgium. - Nicolas Tucat/AFP/Getty ImagesTough talk

But it wasn’t all plain sailing. Hungary, Slovakia and the Czech Republic all voted for the loan but on condition it would not impact them financially.

Belgium – which holds a large majority of the immobilized funds – is fearful of future retaliation by Russia or liability if a peace agreement leads to Moscow demanding return of the funds.

Ahead of the vote, Belgium’s De Wever demanded “binding guarantees” from all EU member states in return for his nation’s approval of the reparations loan.

“Mere oral promises are not enough,” he said at the Belgian parliament Thursday.

Until now, the EU has been using the interest from the assets, which are mostly bonds, to finance some of its support for Kyiv. But as the bonds themselves mature, they are turned into cash, and this is the cash the EU’s executive wanted to borrow and lend to Ukraine until Russia pays reparations.

On Monday, the Russian central bank filed a lawsuit seeking billions in damages from Belgium’s Euroclear depository. The bank called the move a preemptive measure against the EU plan to transfer the frozen assets held by Euroclear “to third parties,” according to Russian state news agency TASS.

In a press release Friday, the Russian central bank said that it would claim damages from European banks in the amount of the frozen assets and lost profits.

Side effects

As the longest night of the year loomed in Brussels, the outlook looked dark for Europe.

US President Donald Trump lashed out at European leaders as “weak” in a recent interview, days after his administration’s new National Security Strategy accused Europe of being “trapped in political crisis,” and suffering from a “lack of self-confidence.”

A US-backed, 28-point peace plan that was leaked last month called for investing $100 billion of the Russian central bank assets frozen around the world “in US-led efforts to rebuild and invest in Ukraine,” and for the US to receive profits from those investments. The assets frozen in Europe account for most of Moscow’s immobilized assets globally.

That set off a flurry of diplomatic efforts among European leaders, outraged at the thought of the White House commandeering assets in their custody.

In a thinly veiled swipe at the US, President of the European executive Ursula von der Leyen called this “Europe’s independence moment” hammering the idea 10 times in her short speech before the European Parliament Wednesday.

This week’s summit, she said, was about facing “the reality of the world that has become dangerous and transactional. A world of wars, a world of predators.”

“Europe must be responsible for its own security. This is no longer an option, it is a must,” she said.

The transatlantic trust long taken for granted has evaporated this year.

Europe is now wary of forces stoking division on two fronts: from the cultural attacks of a transactional White House but primarily from the subversion and antagonism of Moscow. Before the EU summit began, President Putin’s near-constant efforts to undermine Europe hit new levels Thursday when he referred to the continent’s leaders as “piglets” in an address to Russia’s military officials.

“The Russians work day and night to fragment Europe, and they are better at doing that than Europe is at remaining cohesive,” Tom Keatinge, director of the Centre for Finance and Security at the Royal United Services Institute think tank, told CNN.

Lifeboat

The White House has publicly latched on to Ukraine’s past battlefield difficulties or structural weaknesses as leverage towards a hasty peace deal.

Talking before the European negotiations concluded, Zelensky said he that a funding deal would allay that threat.

“We are more confident at the negotiating table if we have these assets,” he said, with Kyiv’s ability to resist publicly secured for at least another couple of years.

He conceded that no deal would have badly wounded Kyiv’s all-important drone industry, a lifeline for frontline troops.

Similarly, the country’s vaunted long-range attacks on Russia, including against Moscow’s oil and natural gas infrastructure, would be affected, he said.

“All of that will disappear,” he told journalists.

The early hours of Friday morning brought some relief then for Kyiv and for Brussels.

Facing Russia’s pitiless attacks in Ukraine and a White House seemingly hungry for a quick – rather than a just – peace, Europe’s lifeboat for Ukraine, one clawed back from the jaws of division and delay, promises an emboldened friend to Kyiv in the uncertain months ahead.

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