Pressure from the United States to push through a peace plan for Ukraine has intensified calls for the European Union to decide soon on using frozen Russian assets to finance Kiev, while finding a way to sit at the negotiating table, writes the European Newsroom, a platform for cooperation between agencies of 23 European countries, including BTA.
Washington's 28-point plan to end the war envisaged Kiev withdrawing from the territory it still controls in the eastern part of Donetsk region, and the US practically recognizing Donetsk and Luhansk regions, as well as the Crimean peninsula, as Russian.
On Tuesday, Russian President Vladimir Putin rejected changes proposed by Kiev and Europe to the the original US peace plan. He also said that Russia does not intend to start a war with Europe.
"However, if Europe suddenly decides to fight and starts a war, then we are ready right now," he said.
Ukrainian President Volodymyr Zelensky was seeking support from his European allies, who feared that the US plan – prepared without the participation of Kiev or Europe, resembles a wish list from Moscow. The diplomatic efforts come at a time when the war, which has killed tens of thousands of civilians and soldiers and displaced millions of Ukrainians, shows no sign of abating. Almost four years after the start of the Russian offensive in Ukraine, an Agence France-Presse analysis of data from the US Institute for the Study of War showed that last month the Russian army made its biggest advance in Ukraine since November 2024. The situation for Kiev has been further complicated by a corruption scandal that has rocked Zelensky's inner circle and forced the dismissal last week of his chief negotiator and chief of staff, Andriy Yermak. Meanwhile, the EU is not only fighting for a place at the negotiating table, but some member states are demanding that the bloc use frozen assets of the Russian central bank to provide Kiev with "reparations loan."
No peace without Ukraine and Europe
The European Union's foreign policy chief, Kaia Kalas, said on Monday that peace efforts aimed at ending Russia's war in Ukraine could enter a crucial phase after a new round of talks between the United States and Ukraine over the weekend.
"This could be a crucial week for diplomacy," Kalas told reporters in Brussels as she arrived for a meeting of EU defense ministers on Monday.
Yesterday, U.S. envoy Steve Witkoff and Russian President Putin met in Moscow. A Putin aide has reportedly described the talks as "constructive" but no significant breakthroughs have been made on a peace deal.
Europe has been largely excluded by the United States in US President Donald Trump's efforts to end the Kremlin's war in Ukraine.
"Although peace talks are underway, I see no signs that Russia is ready to end hostilities in Ukraine. This must be borne in mind so that Europe does not stand aside and does not appear naive," said Danish Defense Minister Troels Lun Poulsen, whose country currently holds the EU presidency.
Zelensky said on Monday that it was "unfair" to exclude European allies from talks on rebuilding Ukraine as efforts to settle the war with Russia are in full swing.
The EU's two largest economies, France and Germany, are leading the push for European involvement.
French President Emmanuel Macron said that a possible plan between Russia and Ukraine to end hostilities could only be finalised with the participation of Kiev and European powers. His German counterpart, Chancellor Friedrich Merz, also said that there should be no "imposed peace" in Ukraine and that Kiev and its European allies must be included in any agreement to end the war.
Polish Prime Minister Donald Tusk confirmed that European leaders are determined to achieve a just and lasting peace for Ukraine.
"This is obvious. We will continue to support Ukraine. Its collapse would pose a direct threat to Poland. I hope this will finally be understood by everyone, especially in Poland."
There have been calls within the EU to appoint either European Commission President Ursula von der Leyen or EU foreign policy chief Kaia Kallas, or both, to lead peace talks on behalf of the EU, but not everyone believes the EU should be involved at this stage.
Slovak President Peter Pellegrini believes that an agreement must first be reached among other world powers before the EU can get involved. He says the bloc is not currently perceived as a strong and significant world power given its status and political leadership.
Dutch Foreign Minister David van Vell also said that he did not see the need for one or two people to speak on behalf of the EU on peace in Ukraine. Van Vel has previously noted that "the important thing for us is that whatever peace plan is proposed, Ukraine stands behind it."
Frozen Russian assets dominate EU discussions
The US peace plan for Ukraine also proposed to unfreeze around 200 billion euros of Russian central bank assets held in the EU and hand over some of the money to the US and the Kremlin.
For many EU leaders, this was too much, and they quickly pressured Trump to withdraw his request.
"Europeans are the only ones who have the right to decide what to do with frozen Russian assets held in Europe," French President Macron said yesterday.
The concern was heightened by the fact that the US proposal came just as the EU was discussing a plan to use the frozen assets, which are blocked in Belgium, to finance a €140 billion loan for Ukraine.
Kallas reiterated the EU's position: the bloc should increase pressure on Russia through sanctions against Moscow and through an agreement to provide Kiev with Russian state assets frozen under EU sanctions as a loan.
According to European Union data, the EU has blocked around €210 billion of Russia's sovereign assets - the majority of which are held by "Euroclear", a financial services company headquartered in Belgium. The company's 2024 annual results report said the company held €183 billion of these assets.
The EU's proposed "reparations loan" stipulates that Ukraine will only repay the funds after Russia pays for damages caused by its invasion.
The European Central Bank said yesterday it could not support the EU plan, casting doubt on whether an agreement on the issue could be reached this month.
According to the "Financial Times" the European Commission has asked the ECB whether it could act as a lender of last resort for "Euroclear" to avoid a liquidity crisis, citing people familiar with the discussions, but the central bank of the 20 eurozone countries said that was impossible "as it would likely breach treaties banning monetary financing."
Belgium has expressed concern about the financial and legal risks of using the frozen assets, most of which are held at "Euroclear" in Brussels.
Last week, Belgian Prime Minister Bart De Wever reiterated his concerns in a letter to the Commission President, calling the loan scheme "fundamentally flawed". He said using the assets would violate "a fundamental principle of international law" and create instability in global financial markets.
Countries with significant reserves in Europe could decide to withdraw them even if the EU maintains that the plan does not constitute an illegal seizure, De Wever said.
There is a real risk that the EU will eventually be forced to repay the funds, De Wever wrote in the letter. That would require guarantees from member states. He also argued that all countries with frozen assets should contribute to the plan, not just Belgium.
For example, Bulgarian Prime Minister Rosen Zhelyazkov said that frozen Russian assets in Bulgaria were not part of the loan guarantees for Ukraine.
"Regarding the so-called Russian assets, these are financial funds deposited with the European Central Bank and blocked by "Euroclear". In Bulgaria, if there are assets belonging to sanctioned individuals or companies, they are not part of this group of financial assets. They are frozen in Bulgaria and transactions cannot be carried out with them," the Prime Minister said.
De Wever also warned of possible Russian retaliation, which could particularly affect "Euroclear" and Belgium. He added that the frozen assets could play a role in future peace talks and that using them now could complicate those talks.
Slovenian Prime Minister Robert Golob stressed that Slovenia understood Belgium's position and its expectation of guarantees if these funds were used.
"On the other hand, it remains true that frozen assets represent the most powerful tool in the European arsenal - one that should be used with a single goal: to achieve peace in Ukraine."
Poland also supports the EU plan, Deputy Defense Minister Pawel Zalewski said after a meeting of EU defense ministers in Brussels on Monday.
Portugal's Finance Minister Joaquim Miranda Sarmento also confirmed that the country's government "generally supports" the loan based on frozen Russian assets. However, he pointed out that it is "a complex issue" and that there are still "some technical aspects to be resolved", not least because Belgium is insisting on clear guarantees and commitments from other European countries.
During a visit by Ukrainian President Zelensky to Madrid on 18 November, Spanish Prime Minister Pedro Sanchez said he supported using frozen Russian assets to rebuild Ukraine. He also announced that €615 million of the €1 billion promised in military aid to Ukraine this year would be mobilised next month, in addition to €202 million for reconstruction.
Faced with Belgian opposition to the plan, Ursula von der Leyen presented other options for continuing to finance Kiev. The first is to use the "free capacity" in the EU's central budget to raise funds on capital markets, and the second is for member states to take out a joint loan.
EU officials and diplomats warn that both options would lead to higher costs for countries at a time when national budgets are under strain.
EU leaders are due to discuss at a summit on 18 December whether to use the assets to finance a loan for Ukraine or find another way to help the country.