Four EU states urge Commission to unlock frozen Russian assets for Ukraine

Four European Union member states have formally called on the European Commission to reopen negotiations on leveraging frozen Russian state assets to fund Ukraine's war effort. The Netherlands, Poland, Spain and Sweden submitted a joint letter to Brussels on 27 August 2026, arguing that current financing mechanisms are insufficient to cover Kyiv's immediate defence needs. The intervention comes as President Volodymyr Zelenskyy disclosed a €23 billion hole in Ukraine's defence budget, raising urgent questions about the sustainability of Western financial support into the next fiscal year.

The letter was addressed to Kaja Kallas, the European Commission foreign policy chief, and Helen McEntee, the Irish Foreign Minister, ahead of an informal gathering of EU foreign ministers in Wicklow, Ireland. Copies were also sent to Valdis Dombrovskis and Marta Kos, the Commission officials responsible for economy and enlargement respectively. The timing is deliberate, aiming to place the asset question firmly on the agenda before ministers meet to discuss the broader strategic outlook for Eastern Europe. The four capitals argue that the issue cannot remain dormant while Ukraine faces a verified funding crisis.

The €23 billion defence shortfall

President Zelenskyy announced the budget deficit publicly on Saturday, stating that Ukraine already faces a €23 billion defence funding hole. This figure represents the gap between planned expenditures for military operations and the confirmed revenue available from domestic sources and existing international aid commitments. While the EU agreed in December 2025 to raise common debt to fund a €90 billion loan to Ukraine, disbursement is scheduled over 18 months and subject to reform conditions. Kyiv is requesting that these funds be frontloaded to plug the immediate gap, but several EU capitals remain reluctant to advance money without verified progress on governance reforms.

The scale of the shortfall highlights the limitations of the current financing model. The European Commission has maintained that budget support must be predictable and sustainable, yet the war's duration has outstripped initial forecasts. The €23 billion figure is not merely an accounting discrepancy but reflects the intensifying cost of munitions, personnel and equipment maintenance on the front line. Without additional liquidity, Ukraine risks slowing operational tempo at a critical juncture. The four signatory states argue that frozen Russian assets offer a logical source of revenue that does not increase EU member state debt burdens.

The Belgian veto point

The primary obstacle to using frozen Russian assets remains the position of Belgium. Most of the €210 billion in immobilised Russian state assets reside in Euroclear, the Brussels-based securities depository. In December 2025, EU leaders failed to agree on a plan to leverage these assets to underpin a massive loan to Kyiv because Belgium resisted the proposal. The Belgian government demanded unlimited guarantees from the rest of the EU to protect itself against legal and financial backlash from Moscow. At the time, EU leaders deemed the request too steep, fearing it would set a precedent for unilateral national vetoes on common foreign policy financial instruments.

However, the political landscape has shifted slightly in recent weeks. The Belgian government has indicated it is open to returning to the Russian assets debate, provided its core demand is met: financial safeguards against Russian retaliation must be shared across the bloc. The letter from The Hague, Madrid, Stockholm and Warsaw explicitly addresses this concern. It calls on Commission experts to explore new options that ensure the risk rests with all EU member states and where no member state holds a disproportionate burden. This wording suggests a willingness to compromise on the mechanism, provided Belgium is not left exposed to legal action alone.

Debt versus assets

The debate centres on two distinct financial instruments. The first is the use of immobilised Russian sovereign assets, mostly held in EU sanctions regimes. These assets generate windfall profits, but some proposals suggest using the principal itself as collateral for loans. The second instrument is the €90 billion common debt loan agreed upon after the asset plan stalled. This operates similarly to the NextGenerationEU recovery fund, where the Commission borrows on markets backed by the EU budget. While safer legally, it increases the EU's overall debt exposure and requires unanimous ratification for any expansion.

Proponents of the asset plan argue it is morally preferable to use Russian money to repair Russian damage. They contend that holding the assets indefinitely without utilising them for Ukraine's defence undermines the deterrent effect of sanctions. Critics, including legal experts within the Commission, warn that seizing sovereign assets could violate international law regarding state immunity. There is also the risk of retaliatory measures against European companies operating in jurisdictions still accessible to Moscow. The four countries argue these risks are manageable if the liability is mutualised, effectively turning a Belgian legal risk into a European political commitment.

Political momentum shifts

The coalition of four states represents a significant cross-section of the Union. Poland and the Netherlands have traditionally been among the most hawkish on Russia, while Spain and Sweden bring weight from the south and north respectively. Their joint action signals that the frustration with the status quo is not confined to the eastern flank. By copying the letter to the economy and enlargement chiefs, they are framing the issue as both a financial necessity and a geopolitical imperative for Ukraine's accession path. The letter states that Ukraine needs more financial support in both the short and long term, and that now is the time to revert to the issue of how to make further use of Russia's immobilised assets.

This pressure comes at a sensitive time for the Commission. Kaja Kallas is tasked with balancing legal caution against the urgent demands of member states facing security threats on their borders. The Wicklow meeting next week will test whether a consensus can be forged. If the Commission ignores the request, it risks alienating key capitals ahead of broader budget negotiations. If it proceeds without Belgian consent, it risks a legal crisis in Brussels. The compromise path involves drafting a new guarantee mechanism that satisfies Belgium while unlocking the assets, a technical challenge that Commission lawyers are now likely to prioritise.