The 27-nation bloc is scrambling to come up with ways to keep money flowing to Kyiv as Moscow’s invasion drags on through a fourth year and US backing dries up.

Focus has increased on doing more to use some €200 billion of Russian central bank assets immobilised in the EU since 2022.

EU chief Ursula von der Leyen this month floated using the assets for a “reparations loan” that Kyiv would only pay back when Russia pays for the damage it has inflicted.

That push on Thursday won the influential backing of German Chancellor Friedrich Merz, a key powerbroker in the EU who had previously been squeamish about doing more to tap the Russian assets.

The vast majority of the Russian central bank assets in the EU are held by the international deposit organisation Euroclear in Belgium.

Belgium – backed up by several other countries – has firmly rejected calls to outright seize the assets and hand them to Ukraine.

In a bid to circumvent those objections, von der Leyen’s European Commission has put forward a complex scheme seen by AFP to unlock some €140 billion that it says “would not touch sovereign Russian assets”.

Under the proposal – being debated by EU ambassadors at a meeting in Brussels on Friday – the EU would borrow funds from Euroclear that have matured into cash.

That money would then in turn be loaned to Ukraine, on the understanding that any funds Russia pays towards post-war reparations would be used to reimburse the Europeans.

The scheme would be “fully guaranteed” by the EU’s 27 member states – who would have to ensure repayment themselves to Euroclear if they eventually decided Russia could reclaim the assets without paying reparations.

The proposal will be at the centre of discussions when EU leaders meet for a summit in Copenhagen next week.

So far the EU and its G7 allies have used only the interest being earned by frozen assets to fund a US$50 billion loan.

That scheme will stay in place under the EU’s latest proposal until it finishes.

The push to unlock more money for Ukraine comes as US President Donald Trump has cut back Washington’s support and said it is up to Europe to keep financing Kyiv.

EU officials say that Ukraine is facing a budget shortfall next year as the punishing war with Russia drains its coffers and US backing dries up.