Frozen Russian Assets and the Moment of Truth for Global Order

Europe may have just eliminated one of the Kremlin’s most reliable points of leverage, the fate of frozen Russian assets, and in doing so, pushed the West into a critical decision about the future world order. On December 12, 2025, the European Union decided to keep about $246 billion (€210 billion) of Russian central bank assets frozen indefinitely, rather than relying on the old system that required renewal every six months.

Until now, the underlying problem was procedural: sanctions had to be renewed on a schedule, which caused a deadlock. The EU’s new approach was based on Article 122 of the EU treaty, an emergency provision that allowed the Council to adopt emergency economic measures in crisis situations without requiring unanimous agreement. In practice, Article 122 now functions as the EU’s legal tool to treat the freezing of Russian state assets as an emergency measure justified by emergency conditions — rather than a routine element of sanctions that could be held hostage every six months.

Now, European governments will weigh whether and how these frozen funds can support long-term financing for Ukraine. With views to warn that With Kiev’s current funding likely to run out by April 2026, European leaders are looking for ways to maintain Ukraine’s defense and core state functions in 2026–2027. The EU’s move is widely seen as a step toward a larger issue: whether and how frozen Russian assets can support long-term financing for Ukraine and, ultimately, reconstruction. The stakes are high.

Euroclear Legal Matters

Most of the frozen funds are held at Euroclear, the Brussels-based central securities depository – bringing Belgium into focus. Belgium has repeatedly expressed concern about legal and financial risks if Russia retaliates through legal proceedings or asset seizures. These concerns are real. Russia’s central bank has already announced it is filing a lawsuit against Euroclear in a Moscow court, while Euroclear has admitted it is already dealing with more than 100 legal claims against it in Russian courts related to the seized Russian assets.

The result is a European policy dilemma: immobilization is one thing. Converting non-current assets into useful funding—without incurring consequential legal risk—is another. European officials argue that the risk can be managed with a structure where Russia remains the legal owner while the assets serve as collateral or the basis for loans to Ukraine.

Meanwhile in Washington

This European economic repositioning conflicts with what is being planned in Washington. For example, point 14 of Trump’s reported 28-point peace plan would have effectively ended Europe’s control over Russia’s frozen stockpiles. Instead, the funds would have been unfrozen and moved outside of European supervision, with most of the money going back to Russia. Trump’s plan would have earmarked about $100 billion to be used, in effect, as US-controlled funds invested in Ukraine for reconstruction, structured so that future net returns are split evenly between the United States and Ukraine. That has been a tough sell to European leaders trying to maintain leverage over Russia until it ends its war and compensates Ukraine.

European skepticism is justified based on the experience of dealing with Russia and Trump’s support of Putin. Over the past decades there have been many agreements and “procedures” with Russia, but no real enforcement. Which brings the debate back to the key strategic question: what security framework would prevent a later renewed Russian attack?

Options include NATO membership, coalition-based defense guarantees, long-term military aid commitments, and even proposals to denuclearize Ukraine. The bottom line is what exactly is going to stop Russia from further incursions into Ukraine and elsewhere?

Meanwhile, behind the scenes

There is also an undercurrent that Europe’s decision-makers understand well: this conflict is based on a strained macroeconomic environment and fragile alliances with America. The gross national debt of the United States has now surpassed $38 trillion, a milestone widely was mentioned by PBS in November 2025. Meanwhile, according to Reutersforeign holdings of US Treasuries have topped $9 trillion by 2025. Japan remains the largest foreign holder, with about $1.2 trillion recent US Treasury data. Many European custodian hubs and countries — such as the UK, Belgium, Luxembourg, France and Ireland — also appear among major holders in the Treasury’s country tables.

In May 2025, Le Monde was mentioned on the political sensitivity of the Treasury’s foreign holdings as a potential bargaining chip in a trade and security environment affected by US policy volatility. The main point was not that the allies want to “weaponize” US debt, since that would also hurt the debt holders financially, but that the financial infrastructure of the allied system is no longer protected by policy due to America’s realignment with Russia.

What matters is the credibility of Trump’s statements

In Washington, the debate has been clouded by President Trump’s exaggerated claims about the amount of US aid to Ukraine. But there is a simple way to clarify the debate.

Independent monitoring offers reliable resolution of doubts. The Kiel Institute’s Ukraine Support Tracker estimated US aid was delivered in Ukraine by mid-2025 to about $134 billion. This US aid pales in comparison to the $195 billion delivered to Europe and is far less than the $350 billion he argued as President Trump said. This does not even address the quality and types of aid being compared, a discussion that further diminishes the value of the US aid that has been delivered.

All this matters for alliance politics. When Trump cites figures that are not supported by credible sources, allies are led to conclude that America’s commitments are conditional, transactional and subject to domestic reinterpretation. This uncertainty has become a strategic vulnerability, especially as Europe is called upon to take on a greater share of deterrence.

Europe’s strategy

Europe’s decision to freeze Russian state assets indefinitely is a strategic move. It includes keeping pressure on Russia, securing funding for Ukraine, and making the West less likely to accept a settlement that smooths the conquest. It’s also an increasingly safe haven against Trump’s unpredictable politics. If Washington oscillates between support and disengagement, Europe’s ability to contain Ukraine—and maintain deterrence—becomes the key concern. This reality affects not only Europe and the US, but also the allied democracies with a direct stake in whether Russia’s aggression is rewarded: Canada, Japan and the other Five Eyes partners among them.

Choice is not abstract

The post-1945 system—imperfect, often unevenly enforced, and often violated—is still based on a fundamental principle: borders are not changed by force, and aggression does not lead to legitimate gains. If the West cannot support this principle in Europe, it becomes harder to defend it at home and elsewhere, especially in countries like Taiwan.

This is why the upcoming meetings on long-term support for Ukraine, and the structure of any asset-backed financing, should be seen as a critical moment. A durable peace requires more than paper. It also needs enforcement, deterrence and a structure that does not reward the attacker. Without these elements, the world does not become safer. it becomes more openly transactional — and more openly imperial.

Conclusion

The EU’s move against frozen Russian assets is not the bottom line. Russia disputes this. Belgium remains cautious. The legal framework is delicate and complex. But the message is clear: Europe is turning frozen Russian assets from a recurring political vulnerability into a stable strategic tool—one that preserves Ukraine, maintains leverage, and ensures that basic rules of state sovereignty remain fundamental to the world we live in.