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After nearly six hours of intense talks and many more behind the scenes, EU leaders walked away from a plan that sounded simple but proved legally explosive: using frozen Russian money to pay for Ukraine’s war effort.
Instead, the 27 EU leaders agreed on a €90 billion loan for Ukraine, funded through joint EU borrowing, pushing the toughest decisions further down the road and leaving many Europeans wondering who will ultimately foot the bill.
Frozen billions stay frozen...for now
The European Commission and Germany had pushed hard for a plan to use Russia’s frozen assets, arguing it was the most practical and sustainable option. But several member states, led by Belgium, pushed back, worried about legal risks and what would happen if Russia demanded its money back.
Belgium’s concern was simple: most of the frozen Russian funds sit on its territory, and if Moscow sued, Belgium could be left holding the bag, alone.
With no solid guarantees from other countries to cover potential losses, the idea ran into a wall.
So after hours of wrangling, leaders quietly dropped the proposal.
A compromise nobody really wanted, but everyone accepted
The final agreement keeps talks about frozen assets alive on paper, but in reality, leaders chose a different route: borrowing.
Under the deal, the EU will raise €90 billion on the markets and lend it to Ukraine in 2026 and 2027 to cover both military and budget needs.
Diplomatic sources say the language about frozen Russian funds was left in the conclusions mainly to avoid embarrassing the Commission and Germany, who had championed the idea for months.
Not all countries on board, but nobody blocked it
While all leaders agreed to move forward, Hungary, Slovakia and the Czech Republic opted out of the joint borrowing part of the deal. Still, Hungarian Prime Minister Viktor Orbán signaled he would not block the decision, clearing the path for the loan to go ahead.
Germany, traditionally allergic to joint EU debt, ultimately backed the plan, a major shift.
Germany calls it a decisive message
After the summit, German Chancellor Friedrich Merz said the deal sends a clear signal to Moscow.
“The financial package for Ukraine has been finalized,” he said. “Ukraine is receiving an interest-free loan of €90 billion. These funds are sufficient to cover its military and budgetary needs for the next two years.”
Merz added that Russia will only change course when it realizes the war will not pay off.
Brussels celebrates...cautiously
European Commission President Ursula von der Leyen called the agreement a success, saying it secures Ukraine’s funding for the next two years.
But she also left the door open to future use of Russian assets.
“The frozen Russian assets will remain frozen, and the Union reserves its right to use the cash to finance the loan,” she said.
In other words: not now, but maybe later.
What this means for Cyprus and other EU states
EU officials insist the loan will not directly hit national budgets. But there’s a catch.
The interest on the borrowing will be covered through the EU’s long-term budget, the Multiannual Financial Framework. That raises a question many EU citizens, including Cypriots, will be asking next:
If interest payments come from existing EU funds, what gets cut to make room?
For now, leaders are celebrating a deal that keeps Ukraine funded and the EU united. But the bigger debate, about risk, responsibility, and who ultimately pays, is far from over.
