The European Union agreed on Friday to remove the time limit on freezing Russian central bank assets held in Europe, a step meant to address uncertainty around using the funds to support Ukraine.

EU states have been working on a plan to raise up to €165 billion for Ukraine’s military and civilian needs in 2026-27, backed by Russian sovereign assets frozen by sanctions.

The loan would be repaid by Ukraine only once Russia pays war damages, making it functionally an advance on future reparations. Efforts have so far been slowed by political resistance from some governments and Belgium’s concerns over legal exposure.

EU ends six-month renewal cycle

EU governments approved the shift from six-month renewals to an open-ended freeze covering about €210 billion in Russian assets. Officials said the change reduced the chance that Hungary or Slovakia could block future renewals and force the money’s return to Moscow.

Much of the freeze’s practical impact falls on Belgium because most of the assets are held by Brussels-based Euroclear. Belgian officials have been seeking clear guarantees that the country would not be left with potential liabilities if Russia won a legal challenge. 

Leaders are expected to address these concerns at a summit on 18 December.

Ukraine hails 'landmark step,' Russia threatens legal action

Ukrainian Prime Minister Yulia Svyrydenko called the decision a “landmark step toward justice and accountability,” saying it “strengthens the foundation for the reparations loan mechanism.”

The Russian central bank separately on Friday said the EU plan to use the assets was illegal and reserved the right to use all available means to defend its interests.

It also said it had sued Euroclear in a Moscow court over actions that it argued prevented the bank from accessing its funds and securities. Euroclear has faced similar cases in Russia since 2022.

EU leaders: Russia's costs will keep rising

EU foreign policy chief Kaja Kallas said the decision keeps Russian funds “on EU soil unless Russia fully pays reparations to Ukraine,” adding that Europe will continue raising pressure on Moscow.

European Commission President Ursula von der Leyen welcomed the outcome, saying it sent a “strong signal” that Russia’s costs would keep rising as long as the war continued.