The European Union is pushing ahead with plans to use frozen Russian state funds as the basis for a so-called reparations loan for Ukraine that is seen as crucial to helping Kyiv fend off Russias full-scale invasion.

EU leaders, meeting in Brussels on October 23, floated a complex scheme to provide Kyiv with up to 140 billion euros ($162 billion) to finance its military and meet other financial needs in 2026 and 2027.

The reparation loan is seen as crucial to helping keep Kyiv stay in the fight and making the Kremlin pay, but it is fraught with legal and political perils.

"European leaders committed to ensure that Ukraine's financial needs will be covered for the next two years," said European Council President Antonio Costa after the summit.

"Russia should take good note of this. Ukraine will have the financial resources it needs to defend itself against Russia's aggression," he said.

Costa added that it is possible to solve the technical issues that need to be sorted out, meaning "this solution is feasible."

The European Union froze some 200 billion euros of Russian central bank assets after Moscow's tanks rolled into Ukraine in 2022. So far the EU has used only the interest to support Ukraine in its defense against Russia.

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Moscow warned on October 23 that any actions taken with Russian assets without Russia's consent are "null and void from the standpoint of international and contract law" and will "result in a painful response."

The bloc developed the loan scheme after it came under pressure to provide additional aid to Kyiv when US support slowed under President Donald Trump.

Under the scheme, which the commission insists would not touch the Russian sovereign assets, the EU would borrow funds from Euroclear that have matured into cash.

That money would then be loaned to Ukraine, which would only have to repay the loan if Russia pays for the damage it has caused in Ukraine.

Most of the assets in question are held in Belgium, whose prime minister, Bart De Wever, said he still has several concerns.

De Wever has insisted that to move ahead Belgium needs firm guarantees from all other EU states that they will share the liability if Moscow comes calling. He also wants other EU countries to promise to start tapping Russian assets frozen in their territories.

"I'm only poor little Belgium, the only thing I can do is point out where the problems are and to gently ask solutions for the essential problem," De Wever told reporters after the summit.

He warned that unless those conditions were met, he would do all in his power "politically and legally, to stop this decision."

The summit conclusions, which were adopted by all member states except Hungary, had to be watered down in light of the objections from Belgium.

The text did not mention the loan directly, instead inviting the commission to present "options for financial support" for Ukraine for 2026 and 2027 -- to be presented to leaders at their next summit in December.

Ukrainian President Volodymyr Zelenskyy, who attended the summit as a guest, still said the meeting brought "good results."

The European Union assured that financial assistance to Ukraine will be maintained not only next year, but also in 2027, Zelenskyysaid on X. This is an important unanimous decision. We have secured political support with regard to frozen Russian assets and their maximum use to defend against Russian aggression.

German Chancellor Friedrich Merz, one of the proponents of the scheme, said he expects the commission to come forward with the different options ahead of the next EU summit.

"We are increasing the pressure to get the Russian side to agree to negotiations so that the guns finally fall silent in Ukraine," Merz said.

"Ukraine needs reliable prospects, especially when it comes to military equipment. We Europeans must send this signal of strength now," he added.

The EU talks were taking place a day after the bloc agreed a 19th package of sanctions on Russia and after the United States hit Moscow with sanctions on two large oil companies.

Zelenskyy hailed the US sanctions as sending a "strong and much-needed message" to Russia.