European Union leaders on October 23 pledged continued financial backing for Ukraine over the next two years, but delayed a decision on tapping billions of euros in frozen Russian assets to fund Kyiv’s defence. 

After marathon discussions at the European Council, EU leaders stopped short of endorsing a so-called “reparations loan” financed with €140bn held at Euroclear, a Belgian clearing house. Instead, the summit concluded with a call for the European Commission to explore “options for financial support based on an assessment of Ukraine’s financing needs”, with a final decision expected at a December meeting.

“Russia’s assets should remain immobilised until Russia ceases its war of aggression against Ukraine and compensates it for the damage caused by its war,” the EU declaration said.

President of the European Commission Ursula von der Leyen told a press conference on October 23 the discussions had been constructive but spoke of the need to proceed in line with European and international law.

“We had a good discussion on the Reparations Loan to be financed with the immobilised Russian assets. It allowed us to identify points we still need to clarify… We will always respect European and international law while taking this work forward,” she said at a joint press conference with European Council President António Costa, a European Commission statement said.

The plan, backed by several EU governments, has proven controversial. Critics include Belgian Prime Minister Bart De Wever voiced caution, who questioned the legality of the plan, according to newswire reports. 

The summit also produced the EU’s 19th package of sanctions against Russia, targeting the Kremlin’s energy, finance, military-industrial, and services sectors, the European Commission said in a statement. The package includes a ban on Russian liquefied natural gas (LNG) imports starting in 2027, a transaction ban on major Russian banks, new restrictions on cryptocurrency exchanges linked to Russia, and export controls on dual-use technologies.

“The new package substantially increases pressure on the Russian war economy,” the European Commission said. “It targets key sectors such as energy, finance, the military-industrial base, special economic zones, as well as enablers and profiteers of its war of aggression.”

Ukraine’s President Volodymyr Zelenskiy welcomed the sanctions package but urged broader enforcement. “We need to create strict sanctions control and real consequences for those who break the rules… Thousands of influential people in Russia must clearly feel and understand that Vladimir Putin and this war are a deadly threat to them – to their lives, their money, and their future,” he said, according to a presidency statement.

Von der Leyen also highlighted the EU’s ongoing commitment to Kyiv. “Together with our partners and allies we have greater impact. We will keep up pressure on Russia for as long as it takes. We will stand by Ukraine for as long as it takes to secure an end to the killing, and a just and lasting peace,” she said.

The European Council said that to date the EU and its member states have provided €177.5bn in aid to Ukraine and pledged to continue delivering humanitarian assistance and civil protection support in coordination with allies.

The summit also focused on bolstering Europe’s defence capabilities under the Roadmap for Readiness 2030. Von der Leyen said the plan identifies capability gaps and aims to surge defence expenditure to as much as €800bn by 2030. “Europe must be responsible for its own defence… and ensure a return on investments by creating jobs and fostering research and development in the EU,” she said.

Russia, meanwhile, has criticised the EU’s proposals to confiscate Russian assets, insisting it would not seize EU assets within its borders. Russian Deputy Finance Minister Alexei Moiseev warned that Moscow would reconsider if Brussels proceeded with confiscating frozen Russian assets. “We are not confiscating anything yet… If they do end up confiscating, then we will consider it,” he told reporters, reported Vedemosti.

The EU’s deliberations in Brussels come ahead of a London summit on October 24, where UK Prime Minister Sir Keir Starmer is expected to encourage his European partners to provide long-range missile support to Ukraine. Zelensky is expected to attend the meeting of the so-called “coalition of the willing”, alongside Nato Secretary General Mark Rutte and European leaders.