EU money instead of Russian assets: why €90 billion decision is a missed opportunity for Europe

Europe has finally moved, but not boldly enough.

With the victory of Hungary’s Tisza Party, the European Union (EU) has at last unblocked its €90 billion Ukraine Support Loan, ending months of political paralysis.

Yet in doing so, Brussels may have settled for the expedient over the transformative.

What could have been a defining moment in Europe’s response to Russia’s war has instead become a case study in caution.

The €90 billion plus uncertainty for Ukraine

The EU has secured short-term relief for Kyiv, but at the cost of abandoning a far more ambitious – and potentially game-changing – plan: the so-called EU Reparation Loan, first floated by Commission President Ursula von der Leyen during the 2025 State of the Union.

In December 2025, EU heads of state agreed on a €90 billion package to address Ukraine’s urgent financial needs, estimated at around €135 billion for 2026–2027.

Yet this commitment remained stalled for over four months due to Hungary’s veto in the Council.

Only on April 23, 2026, following the electoral victory of the centre-right Tisza Party and the end of Viktor Orbán’s sixteen-year anti-EU, pro-Russian political trajectory, was the deadlock resolved.

The Council’s implementing Regulation allocates €23 billion to strengthen Ukraine’s defence industrial capacity and €16.7 billion for general economic support throughout 2026, with a similar package expected for 2027.

However, long-term certainty remains fragile.

Bulgaria’s new prime minister, Rumen Radev, has signalled a more "pragmatic" approach toward the Kremlin, while populist governments in Slovakia and Czechia continue to cast doubt on sustained European support for Ukraine.

The Ukraine Support Loan is undeniably a significant step. It represents the EU’s largest financial package for Ukraine to date, partly compensating for reduced United States (US) assistance under the Trump administration.

It also breaks a long-standing taboo by normalizing the use of common EU debt to support a third country – an instrument that may well be used again.

Yet, in doing so, the EU has overlooked its most powerful leverage: Russia’s immobilised sovereign assets.

Why taking Russian money would have been better

The EU holds nearly 80% of the G7’s Russian sovereign assets (approximately €210 billion) primarily through the Belgian Euroclear and Luxembourg-based Clearstream depositories.

So far, Brussels has focused only on redirecting the roughly €3 billion in annual windfall profits generated by these assets, while leaving the assets themselves untouched.

With the adoption of the Ukraine Support Loan, the political momentum to mobilise these funds has effectively dissipated.

The proposed EU Reparation Loan would have been transformative on several fronts.

Financially, it could have delivered a support package more than twice the size of the current loan, closing the roughly €20 billion gap in Ukraine’s military funding needs.

Its design was both innovative and financially sound: Russian sovereign assets would serve as collateral for loans to Ukraine, to be repaid through future war reparations once Russia ends its aggression.

Only at that stage would the EU reimburse lenders, allowing for the eventual return of the assets to Russia’s central bank.

Crucially, this mechanism would have preserved the legal ownership of the assets, avoiding outright confiscation and thus maintaining compliance with international law.

At the same time, it would have established a clear principle:

Russia pays for the damage it has caused.

By embedding reparations into the financial architecture, the EU would also have strengthened its leverage in any future peace negotiations.

Legally, the Reparation Loan offered a more agile alternative.

It could have been adopted by qualified majority voting under Article 212 TFEU and, crucially, would not have required amendments to the EU’s Multiannual Financial Framework – except as a last-resort safeguard. By avoiding the need to revise the MFF, it would have removed the unanimity requirement that ultimately gave Hungary its veto over the Ukraine Support Loan.

As a result, funding could have been deployed as early as January 2026, sparing Ukraine months of financial uncertainty.

Moreover, it would have avoided the problematic precedent of selectively exempting Member States – such as Hungary, Slovakia, and Czechia – from collective financial responsibilities. While largely symbolic, such opt-outs risk normalising a model of "collective action without collective responsibility", incentivizing political obstruction.

Geopolitically, the EU Reparation Loan could have been a game changer.

It would have positioned the EU as a global leader in innovative war financing, potentially setting a precedent for other actors, especially the US, to follow.

More importantly, it [just as happened under the scheme allocating €90 billion to Ukraine – EP] would have exerted tangible pressure on Moscow by linking financial consequences directly to the continuation of its war.

Europe will still have to return to Russian assets

Overall, the Ukraine Support Loan is an important milestone, but it falls short of the EU’s broader strategic ambition for Ukraine.

By contrast, the EU Reparation Loan could have fundamentally reshaped both Ukraine’s resilience and Russia’s cost calculus. Its absence therefore marks a missed opportunity.

Looking ahead, this debate will not fade. Ukraine’s reconstruction is expected to cost over €500 billion, with the EU likely to shoulder a substantial share – both directly and indirectly – at a time when fiscal space is constrained and new own resources remain limited.

In this context, the question of how to use Russia’s immobilised sovereign assets is unavoidable. The Reparation Loan framework remains not only a pragmatic option, but also a fair one.

Ukraine is poised to become a cornerstone of Europe’s future security architecture. Ensuring its long-term stability requires not only financial support, but strategic imagination – something the EU has, for now, left on the table.

Davide Genini,

a PhD candidate in EU Law at Dublin City University (DCU),

Jean Monnet Centre of Excellence in European Studies of Kyiv-Mohyla Academy