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Drones: Industry & Defence
26OCT

EU keeps Russian assets from Washington

3 min read
15:07UTC

EU leaders at their October summit rejected a US idea to hand Washington the roughly €200bn of frozen Russian assets held in Europe, then left Ukraine's funding undecided.

TechnologyDeveloping
Key takeaway

EU leaders refused Washington the frozen assets but did not settle how Ukraine is funded.

EU leaders at the European Council summit that closed on 16 October rejected a US proposal to hand the roughly €200bn of frozen Russian assets held in Europe to Washington⁠1. US officials floated the idea at a meeting with European counterparts on 9 October, presenting the money as a bargaining chip in US talks with Moscow. The New York Times reported it a day later.

Germany's chancellor, Friedrich Merz, said: "The assets are frozen in Europe, and they shall remain frozen in Europe." Finland's prime minister, Petteri Orpo, said: "It cannot be viewed positively in any way. Absolutely not." Austria's chancellor, Christian Stocker, said he was not convinced, given how fast US policy changes, and Kaja Kallas, the EU's foreign policy chief, said "it is up to Europeans to decide"⁠2.

Europe kept the assets but not a plan to pay for Ukraine. Draft conclusions updated on 14 October say leaders "will revert to the issue in a timely manner"⁠3. Kyiv told allies in August that it faced a $27bn gap for this year, and EU payments so far have come from borrowed money rather than the assets.

On 13 October, at the fourth Ukraine-EU intergovernmental conference in Luxembourg, the EU opened two clusters of accession talks with Ukraine, covering the internal market and competitiveness and growth⁠4⁠5. The talks formally began in June; a candidate works through six such clusters of negotiating chapters to join. Moldova opened the same two clusters alongside Ukraine⁠6. Hungary lifted its objection after the Verkhovna Rada, Ukraine's parliament, passed Law No. 16119 on 12 October, which widens schooling in minority languages that are official EU languages, Hungarian among them⁠7.

Deep Analysis

In plain English

When Russia invaded Ukraine in 2022, Western countries froze money that Russia's central bank kept abroad. About €200bn of it is held in Europe. The United States suggested Europe hand that money to Washington, to use as a bargaining chip in talks with Moscow. EU leaders said no at a summit on 15 and 16 October. The same summit delayed a decision on how to pay for Ukraine's government next year. Separately, the EU opened two more sections of Ukraine's talks to join the bloc, after Hungary dropped its objection.

Deep Analysis
Root Causes

Europe has so far used only the profits on the assets, through the G7 loan of 2024, and funded its own 2026 loan by borrowing. Handing the principal to Washington would spend the one reserve the EU has not touched, on talks it does not control.

Ukraine's next funding round depends on the same unresolved choice. Without the assets, the EU needs a fresh round of joint borrowing, which needs unanimity and a budget debate leaders chose to postpone.

What could happen next?
  • Consequence

    The frozen assets stay outside US-Russia talks, which removes one prize Washington could offer Moscow.

    Short term · Assessed
  • Risk

    Ukraine plans its 2027 budget while the EU has yet to decide how to finance it.

    Medium term · Assessed
  • Precedent

    Hungary lifted its objection after Ukraine passed a law on minority-language schooling, and Budapest could ask for similar concessions at later steps.

    Medium term · Suggested
First Reported In

Update #29 · Trump waives his own 500% Russia tariffs

Kyiv Independent· 17 Oct 2026
Read original →
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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.