At what stage is Russian asset confiscation and how to speed it up
Following the European Union leaders’ summit on 1 October and the European Political Community meeting on 2 October in Copenhagen, many headlines, most notably in the Financial Times, summed up the outcome as "reparation loan plan fails."
These reports, along with a number of subsequent articles and opinion pieces, may have created the impression that the EU had lost the political will to pursue a loan plan secured by frozen Russian assets.
Yet a closer reading of the actual texts, beyond the headlines, shows that the idea has not failed.
Read more about the stage where the idea of a "reparations loan" for Ukraine currently stands in the article by Serhiy Verlanov of the Dnistrianskyi Center: The fear hindering Ukraine's rescue: how EU struggles over Russian money.
Ahead of the meetings, European Commission representatives, speaking at various venues and levels, outlined the core elements of their proposed approach: providing Ukraine with a loan of approximately €140 billion, secured against the cash equivalent of Russian assets frozen in the Euroclear system in Belgium.
The plan is to lend Ukraine the money now, using these assets as a pledge. If, after the war, Russia refuses to pay reparations, it will forfeit its right to recover these assets.
During a brief discussion of the plan at the 1 October summit, several EU leaders expressed support for the general principle but asked the Commission to finalise its legal and fiscal implications.
As a result, according to the Financial Times, progress has been described as "stalled," making it unlikely that a fully developed formal proposal will be ready by the EU summit in Brussels on 23–24 October.
The process has now entered its most sensitive stage: assessing the specific risks should Russia attempt to challenge the mechanism.
Euroclear, the financial institution holding roughly €185 billion in assets of the Russian Central Bank, is based in Belgium. Its government is unwilling to remain the sole defendant if legal claims are brought. France and Luxembourg have echoed this concern, wary of setting a dangerous precedent for their own financial systems, as they hold €18 billion and €10 billion of Russian assets, respectively.
These legal reservations do not amount to abandoning the idea. Rather, they underscore that without a proper insurance framework–both legal and financial–the mechanism cannot secure final approval.
After the summit, European Commission President Ursula von der Leyen set out the next steps with unusual clarity: "We need to develop a much more detailed proposal. It is absolutely clear that the risk must be on our shoulders."
This key phrase captures the essence of the entire discussion: Europe acknowledges the need for shared responsibility within the framework of the reparation mechanism.
The Commission’s task now is to design a framework that distributes risks proportionally across all 27 member states–or at least among a "coalition of the willing."
It should be something similar to the joint bonds issued under the COVID-19 recovery fund (NextGenerationEU). One option under consideration is to provide guarantees proportional to the GDP of the participating countries.
In it, the G7 members reaffirmed their readiness "to use in a coordinated manner the full value of Russian sovereign assets frozen in our jurisdictions to ensure a just and lasting peace in Ukraine."
What the Financial Times described as "the failure to move forward" is, in fact, a transitional phase.
For Ukraine, this moment should not be seen as a setback but as an opportunity for diplomatic acceleration. The issue must remain visible in the public space, because the reparations loan is not merely a financial instrument.
At the same time, active engagement with the governments of Belgium, France, and Luxembourg is essential, as the future legal shape of the mechanism will be decided there.