Kathmandu— European Union leaders recently concluded meetings in Kyiv marking Ukraine’s Independence Day, but discussions quickly turned to the country's substantial budgetary needs; Ukraine faces a €23.5 billion ($27.4 billion) funding gap despite existing EU aid commitments and has requested accelerated disbursement of a promised €90 billion loan from Brussels. While the possibility of leveraging approximately €210 billion in frozen Russian assets—held primarily at Euroclear in Belgium—was revisited, sources indicate that significant obstacles remain and a revival of the plan is unlikely due to member state reservations and potential legal challenges.

Funding Shortfall Prompts Renewed Discussion

Ukrainian President Vladimir Zelensky urged European officials during Monday’s meetings to address the €23.5 billion shortfall in his government's budget, on top of previously pledged EU funding. This request prompted a renewed consideration of options for financial assistance, including the controversial proposal to utilize frozen Russian sovereign reserves. The EU had already agreed to redirect net profits generated by the immobilized assets towards Ukraine.

Member State Opposition Remains Strong

Despite support from European Commission President Ursula von der Leyen, the scheme to leverage frozen Russian assets as collateral for a loan to Ukraine faced significant opposition last year. Belgium, in particular, voiced strong concerns about being disproportionately exposed to legal and financial repercussions from Russia. Bart De Wever, Belgium’s Prime Minister, stated last year that “Taking [Russian President Vladimir] Putin’s money and leaving the risks with [Belgium]. That’s not going to happen.” Euroclear, the Belgian-based institution holding most of the frozen funds, also threatened legal action if the EU attempted confiscation.

Legal and Reputational Concerns

Beyond Belgium's specific concerns, several other EU leaders raised broader objections to seizing Russian assets. These included fears that such a move would undermine international law and damage the bloc’s reputation as a reliable investment destination. Russia has consistently condemned the asset freeze as theft and warned of retaliation should the EU proceed with confiscation, ruling out any reparations payments to Ukraine.

EU officials currently appear hesitant to revisit the plan despite Ukraine's ongoing financial needs, suggesting that alternative funding sources will likely be pursued.

(With inputs from RT)

Originally published on abcnews.com.np.