A €165 billion compensation loan for Ukraine is being pushed by the European Commission using frozen Russian state assets held in Belgium, according to documents obtained by Politico.

The compensation loan is part of a broader financial package of up to 210 billion euros intended to support Ukraine’s finances in the coming years.

According to the proposal tabled today, the €165 billion compensation loan includes €25 billion of frozen Russian assets held in private bank accounts across the EU and a further €140 billion held in the Euroclear bank in Belgium. Ukraine’s “war fund” is expected to be exhausted in April.

The proposal will serve as a basis for direct technical negotiations before the planned meeting of EU leaders in mid-December to make decisions on the most sensitive aspects of the initiative. Ukraine would have to repay the loan only if Russia ends the conflict and pays war reparations, which is considered a highly unlikely scenario.

Of the reparations loan, 115 billion euros is earmarked to finance Ukraine’s defense industry, while 50 billion euros will cover Kiev’s budgetary needs. The remaining 45 billion euros of the package will be used to repay a loan from the G7 group to Ukraine from 2024.

The main obstacle remains the Belgian government’s opposition to the loan. “The text that the commission will present today does not satisfactorily address our concerns,” Belgian Foreign Minister Maxim Prevost told reporters Wednesday morning on the sidelines of a NATO meeting. “We have the disappointing feeling that our views have not been heard.”

With today's proposals, we can give Ukrainians the means to defend themselves.

And take forward peace talks from a position of strength.

We are putting forward solutions to support Ukraine's budget and strengthen its defence industry ↓ https://t.co/rVwJoZEOEy

— Ursula von der Leyen (@vonderleyen) December 3, 2025

Belgium fears retaliation from Russia against the state and the financial custodian holding the frozen assets, Euroclear. The government is demanding financial guarantees from EU capitals if Moscow succeeds in recovering the money.

The Commission has already said it is ready to provide emergency bridge financing to Ukraine to cover its needs for the first months of the new year, possibly through EU debt.