If there's one way European Union officials feel they can get a seat at the table when it comes the settlement of the war in Ukraine, it is via the 176 billion euros ($204 billion) of Russian frozen assets currently held inside the bloc and how that can be leveraged both politically and economically.
Last month, the EU saw itself largely bypassed when the United States presented a peace plan that was "refined" once US and Ukrainian diplomats met in Geneva a few days later.
European officials, speaking to RFE/RL under condition of anonymity, say they have succeeded in removing some of the original text's ideas related directly to Ukrainian membership in the EU and NATO.
But Europe has a golden ticket up its sleeve that could secure it a spot at the negotiating table: funding for Ukraine.
Having committed "to covering the financial needs of Ukraine for 2026 and 2027," European Commission President Ursula von der Leyen recently gave member states three options for getting an estimated 140 billion euros to Kyiv over the next two years.
With the United States reluctant to commit any new money for Ukraine, the EU's willingness to step up has become crucial for Kyiv as Russia's full-scale invasion nears its four-year anniversary.
The first option spelled out by von der Leyen in the paper is for individual member states to give Ukraine the cash. In the second, the European Commission would raise the necessary funds on the financial markets. But it's the third option -- a reparations loan leveraging frozen Russian sovereign wealth assets in the EU -- that is the most popular, as it wouldn't directly hit the pockets of EU taxpayers.
It's not that straightforward, however.
Firstly, time is running out to decide, and Belgium, where most of these assets are frozen, still opposes the move. Then there's the United States, which in its original proposal also expressed interest in obtaining a large part of the funds.
Von der Leyen told the European Parliament on November 26 that she couldn't "see any scenario in which the European taxpayers alone will pay the bill" for Ukraine and that she was ready to present the legal text for the reparations loan.
Securing Backing For A Reparations Loan
According to RFE/RL sources, the European Commission is currently working on as many as 11 legal acts when it comes to the loan, and there is plenty of frustration in EU capitals that have yet to see concrete details of how the plan would work.
A European Commission official told RFE/RL that the original idea was to first secure political backing for the reparations loan when EU leaders gather at an EU summit in Brussels on December 18. The finer points would be ironed out early next year to allow the money to start flowing to Kyiv by the second quarter of 2026.
There's also a fear that national diplomats and lawyers would get bogged down in details and derail any chances of a deal if the legal acts are presented too soon.
Belgium, which hosts the financial markets company Euroclear where most Russian bonds are frozen, wants to see proper guarantees from other EU member states as it expects a legal retaliation from Moscow. To shoulder claims of 140 billion euros from Russia -- an amount that is one-third of Belgium's annual GDP -- would be a disaster for the country.
In a letter seen by RFE/RL addressed to von der Leyen on the topic by Belgian Prime Minister Bart De Wever, he once again spelled out his concerns.
"While l have full sympathy for the argument that the European taxpayer should not be the only one picking up the tab for the financial support of Ukraine, the brutal legal reality is that at no moment in history have immobilized sovereign assets been 're-purposed' during an ongoing war," he wrote.
"Such assets have been the object of decisions during post-war settlements, usually in the context of war reparations by the losing party."
The European Commission, however, still believes an agreement can be made in December if enough EU member states make legally binding guarantees to back the reparations loan based on their gross national income (GNI). This means smaller -- and more skeptical -- countries such as Hungary and Slovakia can opt out as their total share of EU GNI is miniscule.
But the other wealthier and larger European countries need to be onboard to share the costs. And Brussels hopes other non-EU G7 countries could chip in, as well.
"If the European Council were to be called upon to decide on a reparations loan scheme at its upcoming meeting, it will only be possible on the basis that all the concerns expressed above are adequately and fully covered," De Wever wrote at the end of his letter to Von der Leyen.
"This includes a full guarantee to be provided by willing member states enabling Euroclear to maintain liquidity of the assets for their total amount."
'The American Angle'
But the Belgians aren't the only obstacle to be overcome.
There's also the "American angle," as some EU officials put it.
The original 28-point US peace plan noted "$100 billion in frozen Russian assets will be invested in US-led efforts to rebuild and invest in Ukraine" and that "the US will receive 50 percent of the profits from this venture."
This wording truly rattled European politicians and diplomats alike, especially as they had envisioned that the money given to Ukraine in the shape of a reparations loan to a large extent would be used by Kyiv to buy European-produced weapons.
EU officials say most parts of the original US proposal have been watered down or taken out completely, but they admit that any final document could change considerably and they aren't privy to the latest discussions on the wording.
While the EU would want the reparation loan to be a European project, most diplomats concede it is essential to keep Washington onboard -- and happy. That could mean being open to the idea of the United States getting some of the funds or at least Ukraine using the cash to buy American arms.
Crucially, though, Brussels also has to ensure that the United States continues to pressure Hungary into agreeing to the rollover of EU sanctions, which include the frozen Russian assets, every six months.
In July, when it was time to renew the measures, Hungary didn't threaten a veto, and this was largely due to American pressure. Brussels hopes the United States will play that same role when the sanctions need to be extended again in January.
