Sweden-led EU letter seeks to revive frozen Russian assets debate

Four EU countries push to revive frozen assets plan

Sweden, the Netherlands, Poland, and Spain have called on Brussels to return to the debate over using Russia's frozen state assets to help fund Ukraine, according to a letter dated August 27 and seen by multiple outlets. The letter, addressed to the EU's foreign policy chief Kaja Kallas and Irish Foreign Minister Helen McEntee, urges a first discussion of the topic at an informal meeting of EU foreign ministers scheduled for September 1-2 in Wicklow, Ireland. It also copies in the European Commission's economy and enlargement chiefs, Valdis Dombrovskis and Marta Kos.

"We believe now is the time to revert to the issue of how we can make further use of Russia's immobilized assets for the benefit of Ukraine," the letter states, as quoted by Politico Europe and the Kyiv Independent. The signatories acknowledge the complexity of the issue, saying "we are well aware that this question is complex, and that we must look for solutions that take legitimate interests into account."

Ukraine's budget gap and previous blockage

The renewed push comes as Ukraine faces a significant funding shortfall. President Volodymyr Zelenskyy on Saturday revealed a €23 billion defense funding hole, as reported by Politico Europe. The EU had earlier approved a €90 billion support loan to Ukraine, intended to cover two-thirds of Kyiv's financial needs until the end of 2027, according to the Kyiv Independent. The draft letter calls that decision a "significant milestone" but adds that "we are all aware it will not be enough."

Efforts to leverage Russia's frozen assets have been stalled since December, when EU leaders failed to agree on a plan to use €210 billion of frozen Russian state assets, most held at the Brussels-based depository Euroclear, to underpin a loan to Kyiv. Belgium resisted the plan, demanding unlimited guarantees from the rest of the EU to protect against legal and financial backlash from Moscow, a request other leaders deemed too steep. Instead, EU leaders opted to raise common debt to fund the €90 billion loan, which will be disbursed over 18 months subject to reforms by the Ukrainian government.

According to the Kyiv Independent, the latest attempt to take over the assets, in 2025, failed amid Belgian concerns about insufficient risk-sharing and the potential legal risk of being sued by Russia. The new letter reportedly seeks clarity on any progress in alternative legal and technical frameworks that could sidestep Belgium's veto, as noted in reports from TASS, which cited the Financial Times.

Kremlin warns of legal consequences

Moscow has responded sharply to the renewed initiative. Kremlin Spokesman Dmitry Peskov told reporters on August 27 that Russia would use "the entire arsenal of legal tools for protecting its interests and for legal action against those making and implementing such decisions." He called the potential use of frozen assets "absolutely illegal" and said it would entail legal consequences.

Peskov also described the West's approach as reflecting "a very aggressive policy from European countries." He dismissed media reports alleging Russian aggression toward Western countries as "media rumors," and said Western media were publishing "spooks" about alleged Russian plans against NATO, claims he said "have no basis in reality."

At the same briefing, Peskov said he had no information about the next round of talks between Russian and Ukrainian delegations, while noting that Russia continues contacts with the United States on Ukraine at the working level. He reiterated Moscow's openness to peace talks, saying Russia "would prefer to achieve its goals through peaceful means," but continues its military operation because no such option exists to protect its interests.

Outlook

The letter's signatories are expected to press the case at the informal meeting in Ireland next week. Whether Belgium's concerns can be assuaged remains unclear, as the Belgian government has in recent weeks said it is open to returning to the debate but reaffirmed its demands for financial safeguards from the rest of the bloc, according to Politico Europe. Sweden's Foreign Minister Maria Malmer Stenergard, the lead signatory, has framed the initiative as both fair and pragmatic, telling the Financial Times: "Now is the time to start a new discussion about how we can make further use of Russia's frozen assets for Ukraine's, and our, benefit. This is the fair and smart way to make sure that Ukraine can defend itself, and all of Europe."