The fate of billions in frozen Russian assets has become the central battleground in high-stakes negotiations over a potential Ukraine peace deal, with European leaders racing against Washington to control the valuable funds.
Trump's Controversial Proposal
In a move that stunned European diplomats, U.S. President Donald Trump proposed a 28-point peace plan that included seizing $100 billion in frozen Russian assets matched by another $100 billion from the European Union. The scheme would have created an investment vehicle for Ukraine's reconstruction controlled by Washington, with 50% of profits returning to the United States.
The proposal revealed Trump's characteristic negotiating style, leaving many European officials suspecting he wants a quick deal that forces Europeans to make it work while America profits. Analysts described the move as essentially a U.S. attempt to snatch these assets, coming as Brussels and Washington relaunch trade negotiations over tariffs.
Agathe Demarais, a senior fellow at the Berlin-based European Council on Foreign Relations, characterised the proposal as akin to a "signing bonus" for a peace deal heavily slanted towards Russia.
Europe's Response and Financial Stakes
European Commission President Ursula von der Leyen has made the frozen funds central to her strategy for maintaining pressure on Russia while increasing support for Ukraine. The 27-nation EU has already sent Ukraine nearly $197 billion since Russia invaded nearly four years ago.
"I cannot see any scenario in which the European taxpayers alone will pay the bill," von der Leyen declared Wednesday in Strasbourg, France, receiving applause from European Parliament lawmakers.
With mysterious drone incursions and sabotage operations rattling European capitals, there's near unanimity on seizing Russian assets to cover the estimated $153 billion needed for Ukraine's budget and military needs in 2026 and 2027.
The European Commission has proposed taking direct ownership of the $225 billion in assets frozen at Euroclear, a Brussels-based financial institution. Under von der Leyen's leadership, the bloc could then issue a loan to Ukraine, repayable only if Moscow provides war reparations to Kyiv.
The Belgian Conundrum and Political Momentum
The bulk of Russia's frozen assets are held in the Euroclear clearinghouse in Belgium, putting Belgian Prime Minister Bart De Wever in a delicate position. He has previously refused to approve using the assets as collateral for massive Ukrainian loans, citing fears of Russian retaliation against Belgian interests.
"We are a small country, and retaliation could be very hard," De Wever warned in October.
However, recent developments in Belgian domestic politics have created new optimism. After months of political wrangling over deep federal debt ended last week in a deal, politicians across Europe began hoping De Wever might lift his objections to seizing Russian assets.
Sweden's Foreign Minister Maria Malmer Stenergard emphasised the urgency after Wednesday's Brussels meeting, stating "the clock is ticking" and that seizing the assets represents "the only realistic financing option that would make a real difference."
The EU's top diplomat, Kaja Kallas, noted there is now broad EU support for Belgium, adding that swift action "would send the strongest message to Moscow that it cannot wait us out."
Following intense discussions between the U.S., Germany, France, the United Kingdom and European Commission representatives, the controversial investment scheme was removed from the new draft peace plan. Russia has already signalled its total rejection of this revised draft.
All eyes now turn to December 18, when De Wever will join other EU national leaders for a Brussels summit that will critically address the seizure of Russian assets, potentially determining both Ukraine's immediate future and Europe's strategic independence from Washington.
