Europe's War Debt: Seizing Trillions?! 💰🔥

World News

The Trump administration is currently evaluating the potential future of Ukraine and, by extension, Europe, concerning issues of territorial integrity, sovereignty, and security. Washington is seeking a negotiated resolution to the full-scale conflict initiated by Russian President Vladimir Putin in February 2022, a conflict that has seen Russia wage war against Ukraine, even if this requires a departure from longstanding international principles regarding the recognition of territory acquired through military occupation. For Europe, and particularly the European Union, the stakes are considerably higher, representing a core element of the bloc’s security and political concerns, which center on deterring further aggression from Putin and ensuring Ukraine’s stability both politically and economically. A settlement to the conflict that fails to achieve either of these objectives would pose a significant risk to the bloc’s long-term security. It is crucial, moreover, that the Trump administration manages these decisions without undermining European security by again questioning its commitment to NATO’s security infrastructure. Notably, Europe has surpassed the United States for the first time since June 2022 in terms of total military aid to Ukraine, having allocated 72 billion euros ($83.6 billion) by the end of April, compared to Washington’s 65 billion euros ($75.5 billion) at that time, according to the Ukraine Support Tracker.

As of the end of April, a total of 72 billion euros ($83.6 billion) in military aid had been allocated to Ukraine, exceeding Washington’s contribution of 65 billion euros ($75.5 billion), according to the Ukraine Support Tracker. Simultaneously, the European Union and the United Kingdom have the power to seize sovereign Russian funds frozen in their jurisdictions since 2022. Specifically, they can target the 185 billion euros ($214.8 billion) held at the Belgium-based clearing house Euroclear – the majority of which is now in cash and therefore readily deployable or reinvestible – alongside the Russian government funds frozen at Euroclear’s Luxembourg-based rival, Clearstream, which are estimated at approximately 20 billion euros ($23.2 billion). European nations have been actively considering this option for months, and the Euroclear assets were already utilized to secure a prior $50 billion (43 billion euros) loan to Ukraine, finalized in January 2025, backed by these same assets. Following a delay – largely attributed to the Belgian government’s insistence on indemnification and its endorsement of Kremlin talking points regarding the unprecedented nature of such a move – Europe had planned to introduce a new loan provisioned by the assets, potentially totaling up to 140 billion euros ($162.6 billion), during the European Council meeting on December 18-19.

There is ample precedent for such actions; German and Japanese government assets were seized by the United States during the second world war. In Japan’s case, assets were frozen prior to the attack on Pearl Harbor, with the majority subsequently retained under the San Francisco Peace Treaty of 1951. Furthermore, the Kremlin’s threats to initiate decades-long legal battles are largely overstated, as they are predicated on a pre-Soviet-collapse bilateral investment treaty that Putin and his proxies have repeatedly failed to successfully invoke to unfreeze assets or challenge existing sanctions. Moreover, numerous unresolved claims totaling tens of billions of dollars are currently held against Russia in European courts—including the approximately 13-billion-euro ($15bn) arbitration award won by energy firm Uniper against Gazprom for disruption to gas supplies in 2022. The most significant ongoing case remains the 2014 award to former shareholders of Yukos, stemming from the Kremlin’s expropriation of the company. This award survived all appeals; in October 2025, the Supreme Court of the Netherlands definitively rejected Russia’s final challenge, confirming that the award – now valued at more than $65bn, including interest – is final and enforceable against Russian state assets worldwide. However, enforcement will ultimately depend on locating suitable Russian assets that courts are willing and able to seize.

From Russia’s ongoing war, settlements have been paid by the state insurer NSK and aviation firm Aeroflot related to the 2022 seizure of aircraft leased from Western companies. Europe’s delays in addressing this situation are unacceptable, and each month of inaction further increases the financial burden on Europe, alongside the growing probability that Washington will negotiate a deal that disregards European interests. A critical question now centers on how to secure Ukraine’s continued financing and its ability to maintain its defense capabilities. The 28-point “peace plan,” developed by Kremlin insiders and endorsed last month by Steve Witkoff, Trump’s special envoy and longtime associate, not only proposes the allocation of these frozen funds but also demands that Europe provide an additional $100 billion. Furthermore, the plan would divert frozen Russian assets away from Ukraine’s reconstruction, placing a significant and escalating financial burden directly on Europe. Historically, such a deal, should the Kremlin fail to uphold its commitments – as it did with the ceasefire agreements reached in 2014 and 2015 following the initial invasion – would leave Europe bearing an even greater cost.