The debate over how to use frozen Russian assets to aid Ukraine has taken an unexpected turn. On February 25, 2026, German foreign policy official Johann Wadephul stated that the direct confiscation of the funds themselves has been officially removed from the European Union’s active agenda.
Frozen Russian assets: why the EU abandoned confiscation
According to the German official, the decision to drop the radical scenario stems from a lack of consensus among EU member states and immense legal risks. The primary sticking point was Belgium’s position. The lion’s share of the blocked Russian reserves is held there, in accounts at the international depository Euroclear.
Belgian authorities expressed fears that the direct seizure of sovereign funds would undermine investor confidence in the European banking system and trigger an uncontrollable shock across global financial markets.
Profits instead of seizure: Europe’s new financial plan
Since the frozen assets themselves remain legally untouchable, European leaders have shifted their focus toward alternative and safer financial mechanisms:
- Utilizing profits: The EU’s attention is now focused exclusively on seizing the net profits generated by the blocked Russian funds in European accounts.
- Collateralized loans: In parallel, there is active discussion regarding a mechanism to issue debt (loans) to Ukraine, secured by future income from these investments.
“A joint loan is the path the EU has taken. Russian sovereign assets will be considered in the future within the context of reparations that Russia must pay, but the discussion on this topic [of confiscation] is over,” Wadephul said.