To Secure
Money for Ukraine, Europe Had to Resort to a Messy Compromise
The
European Union came up with an 11th-hour deal to help Ukraine, but the solution
raised questions about the bloc’s decisiveness.
Jeanna
Smialek
By Jeanna
Smialek
Reporting
from Brussels
Dec. 19,
2025
Just
before 3 a.m. on Friday, the news began to percolate through the European
Union’s cavernous headquarters in central Brussels. After more than 16 hours of
negotiations, leaders from across the 27-nation bloc had come up with a plan to
finance a desperate Ukraine through 2027.
It wasn’t
the plan that officials had been talking up for weeks. That one would have used
Russian assets frozen in Europe to back a loan to Ukraine, and leaders had
repeatedly said it was their best option — a decisive course of action and a
show of strength.
Instead,
it was a messy compromise.
“Europe
always works on the basis of muddling through,” said Mujtaba Rahman, the
managing director for Europe at the Eurasia Group. “A much more decisive signal
could have been sent, and they failed to do that.”
European
leaders celebrated the final result, which will funnel 90 billion euros’ worth
of loans to Ukraine (about $105 billion) over the next two years. That extends
a crucial lifeline for the country, which had been expected to start running
out of money early next year. Ukraine will need to pay back the loans, which
will carry no interest, only if Russia pays reparations.
“I don’t
like to be here at four o’clock in the morning,” said António Costa, the
president of the European Council, at a news conference in the small hours of
Friday morning. “But I like that we deliver.”
The
agreement will use the European Union’s own budget to back the loan, instead of
using the €210 billion ($246 billion) worth of Russian state assets immobilized
in Europe. That was the plan that European Union leaders and Friedrich Merz,
the German chancellor, had pushed for months.
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The
frozen-asset idea collapsed at the 11th hour, after feverish negotiations
punctuated by frantic side huddles. It was killed both by long-running
opposition from Belgium and by reservations from Luxembourg, Italy and France,
according to European diplomats and officials.
Belgium
hosts most of the assets frozen in Europe, and Luxembourg is home to a smaller
pot. Both worried that they could be on the hook for damages if Russia were to
successfully retaliate.
Emmanuel
Macron, the French president, and Giorgia Meloni, the Italian prime minister,
voiced concerns about the financial cover that Belgium wanted, according to two
diplomats who spoke on the condition of anonymity to discuss the deliberations.
They were worried about getting loan guarantees through their national
parliaments.
By early
Friday morning, it was clear that the frozen-asset plan itself was dead for
now. Even the solution that eventually emerged was not a clear display of
European unity. Hungary, Slovakia and the Czech Republic will not participate
in the compromise loan plan. All three had consistently expressed reluctance or
outright opposition to the options to fund Ukraine.
“We
managed,” Mette Frederiksen, the prime minister of Denmark, said at a news
conference after the decision. She expressed worry that such divisions within
the bloc would only deepen with upcoming elections and that “things will be
more difficult from now on.”
The
failure of the much-discussed frozen-asset plan could have consequences,
because it leaves pressing questions unanswered.
The
United States and Russia have been eyeing the pile of frozen funds for weeks.
When a 28-point peace plan that American officials had drawn up was leaked last
month, it envisioned using some of those assets for a joint American-Russian
investment program.
European
Union leaders have frozen the funds indefinitely. But they have not reached an
agreement to use them, and that could keep the assets in play as negotiations
proceed, Mr. Rahman said.
“There
was a geopolitical purpose in the use of these reserves,” he said. “Yes, the
assets are immobilized, but they will be more susceptible to pressure from the
United States and Russia.”
While
European leaders insisted on Friday morning that they would continue working on
plans to use the assets, this week’s negotiations illustrated how difficult it
is to reach consensus.
Bart De
Wever, Belgium’s prime minister, was the most visible and stalwart opponent to
tapping the frozen assets. In the early hours of Friday, he acknowledged at a
news conference that the eventual compromise did not censure President Vladimir
V. Putin of Russia as directly as the frozen-asset solution would have, a
disappointment to some of his fellow national leaders.
“There’s
also a geopolitical motivation behind it,” he said of the frozen-asset plan.
“They want to punish Putin by taking his money.” He added, “Politics is not
about emotion. It’s a rational job.”
Perhaps
most important, the European Union’s reputation could take another hit.
Officials had insisted for weeks that they would find a way to use the frozen
funds and then failed to do so at the last possible moment.
To make
matters worse, the compromise came hours after Europe delayed a decision on a
huge trade agreement with South American countries, in the face of Italian and
French opposition. The deal was supposed to be signed on Saturday and had been
billed as a sign of how Europe was strengthening itself through new trading
partners at a contentious moment.
“Europe
has sent a signal of weakness,” one likely to resonate in both Moscow and
Washington, said Juraj Majcin, a policy analyst at the European Policy Center.
That
display of vulnerability comes at a challenging juncture in global politics.
Russia is
aggressive and expansionist. China is taking an increasingly hostile economic
stance toward the bloc. And the United States, long Europe’s most important
ally, has pulled back. President Trump recently labeled Europe as “decaying,”
with “weak” leaders.
America’s
derision has had real consequences. The United States has repeatedly left
European officials out of critical discussions over Ukraine.
That is
one reason that Europe wanted to display strength this week with a decisive
funding plan. Instead, it showed that the bloc’s clunky decision-making
structure can eventually get to a result — but not as forcefully as hoped.
“Trump
understands only power, like Putin does,” Mr. Majcin said. “We failed
geopolitically.”
Jeanna
Smialek is the Brussels
bureau chief for The Times.
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