A summit of EU leaders tomorrow will test whether the bloc can hold together — or whether Donald Trump can tear it apart, writes "Politico".
High-stakes disagreements between European governments over the use of Russian assets frozen after Vladimir Putin’s invasion of Ukraine to finance the country’s reconstruction reveal a deeper division on the continent over how to deal with the new world order and unprecedented pressure from the United States.
"They want to make us weak," said a senior EU official familiar with transatlantic relations and summit preparations.
This week, the European Council is due to to do two things. Leaders need tangible results, especially on financing Ukraine. But leading governments say they must stand up for the EU when the White House tries to influence policy, and more European leaders than ever before - from Hungary's Viktor Orban to the Czech Republic's Andrej Babis - are rejecting Brussels' conventional wisdom.
The EU will be "seriously damaged for years" if it fails to reach a deal on financing Ukraine, German Chancellor Friedrich Merz said. "And we will show the world that at such a crucial moment in our history, we are incapable of coming together and acting to defend our own political order on this European continent".
Trump administration officials are urging European governments - at least those they consider the friendliest - to reject the plan to use 210 billion euros in Russian assets to finance Ukraine, four EU officials involved in the discussions said.
When EU leaders met in Brussels in October, they failed to reach an agreement on the frozen funds because Belgium objected. Two months later, it became clear that the EU's problem was not really Belgium, but Trump.
The European Commission and the most influential capitals were negotiating with each other during this period in an attempt to win over Belgian Prime Minister Bart de Wever - whose support is crucial because his country holds most of the Russian assets frozen in Europe. Discussions have intensified over the past week as the EU tries to provide assurances to Belgium.
The chances of a deal, however, have diminished rather than improved since yesterday.
"I felt like crying", sources said of the mood at a meeting of EU ministers in Brussels preparing for the summit.
"No longer the leader of the free world"
Ukraine is in desperate need of funds as it faces a budget deficit of 71.7 billion euros next year. If the money doesn’t start flowing by April, it will have to cut public spending, which could affect morale and its ability to continue defending itself — nearly four years after the Russian invasion.
The Belgian government says its opposition to using Russian assets to finance the loan is due to the need to protect its own taxpayers from being held liable if the money ever has to be repaid.
For other European countries, it’s a matter of broader geopolitics.
The U.S. influence campaign, in which Trump administration officials have bypassed Brussels and reached out to capitals, has led Italy, Bulgaria, Malta and the Czech Republic to join the group of dissenting countries.
Failure would be disastrous for the EU’s standing in the world, given the message it would send, European officials said. Not just to the irascible Trump administration, which in its National Security Strategy published earlier this month said it would support Eurosceptic forces, but also to Russian President Vladimir Putin, who openly questions the sovereignty of former Soviet republics.
Manfred Weber, the leader of the center-right European People's Party, the largest political family in the EU, gave a startling assessment of the deteriorating state of relations.
"The United States is clearly no longer the leader of the free world," he argued in Strasbourg, where the European Parliament is meeting this week. The Trump administration is "distancing itself from us.".
A devastated Ukraine would have a weaker hand in peace talks, undermining its chances of achieving the lasting peace it needs to recover from the devastation of four years of total war.
"I don't even have the right word", Estonian Prime Minister Kristen Michal said when asked what would happen if the EU failed to reach a loan agreement. Kiev needs to know "that Europe supports Ukraine, no matter what. That they don't have to accept a bad deal".
According to a leaked draft of a peace plan agreed upon by the White House and the Kremlin, Washington wants to use some of Russia's frozen assets to finance U.S.-led reconstruction efforts. Freeing Ukraine's frozen assets as part of a reparations loan would allow Kiev to decide where to direct the money, with France pushing for a "first-in-first-out" approach to arms spending.
Trump is also pressuring Ukrainian President Volodymyr Zelensky to cede to Russia parts of heavily fortified and strategically important territory in the Donbass region - land that the Kremlin currently does not control. The White House rejected Brussels' accusations of interference.
"The spats from anonymous sources who were not present at these discussions should not be taken seriously", stressed White House Deputy Press Secretary Anna Kelly. "The United States' sole goal is to achieve peace in this conflict. Both the Ukrainians and the Russians have made clear their positions on the frozen assets, and our sole job is to facilitate a dialogue that can ultimately lead to a deal.
In the delayed talks yesterday, EU officials and leaders increasingly raised the issue of the nuclear option: pushing through the reparations loan by a qualified majority - in other words, ignoring the objections of some countries and moving forward anyway. But some officials said that would tear apart an already fractured bloc and potentially plunge it into a real crisis.
Another alternative is for some countries to simply offer limited bilateral loans.
"It is important that Belgium participates" in the deal, "but let's see", said Latvian Prime Minister Evika Silina. "If this qualified majority vote is going to be the only option, why not?".
"It is important that the EU shows its strength, as well as its ability to make a strong decision, because we have been working for a long time and we promised Ukraine that we would help them with financial resources - and frozen assets are a really good source," she added.
Silina added significantly: "For Belgium, I think I don't want it to become a second Hungary". Last week, diplomats warned that Belgium risks being estranged from EU decision-making as a result of its defiance over the assets deal.
For Ukraine, a reparations loan financed with Russian assets would be the best solution to its financial black hole - IMF support for the country depends on this plan.
On Monday, however, Zelensky was pragmatic - he did not care how Ukraine got the money, as long as it got it.
"Of course, we would really like to use Russian assets to rebuild our country", as "it is fair that the Russians pay for the destruction". But "a reparations loan or any format based on the size of Russia's frozen assets - between $150 billion and $200 billion - is a real game changer," he added.
With talks between European officials failing to produce an agreement, leaders in person will have the unusual task of crafting a solution themselves at tomorrow's summit.