Greece (Brussels Morning Newspaper) Since Russia’s full-scale invasion of Ukraine, the European Union has turned to its most powerful leverage—economic sanctions—in an effort to curb the Kremlin’s offensive and bring Moscow to the negotiating table. From the outset, EU leaders ruled out any direct military intervention, viewing it as both strategically unfeasible and politically untenable. Even proposals to position a peacekeeping mission along the Russia–Ukraine border were quickly dismissed, leaving Brussels with financial measures and political solidarity as its principal tools.
In practice, this has translated into an unprecedented package of aid commitments, arms deals, and budgetary support designed to keep Ukraine’s government and military afloat. The EU’s approach has underscored its determination to hold the political alliance with Kyiv together, while avoiding steps that might draw the bloc into direct confrontation with Moscow. Yet the longer the war drags on, the more pressing the question becomes of how Ukraine will rebuild and redefine itself once the fighting ends—particularly for a country that has spent over a decade attempting to escape the gravitational pull of the Kremlin.
On Saturday, EU foreign policy chief Kaja Kallas addressed one of the most sensitive issues facing the bloc: what to do with the hundreds of billions in frozen Russian assets held across Europe. Kallas confirmed that the EU will examine mechanisms to channel these assets into Ukraine’s defense and reconstruction. Still, she cautioned that outright confiscation remains politically unrealistic, reflecting the legal and diplomatic hurdles the bloc faces as it attempts to balance principle with pragmatism in one of its most consequential geopolitical tests.
Europe’s red line
President Vladimir Putin’s hold on power is reinforced not only by the weight of Russia’s bureaucratic state machine but also by the loyalty of a cadre of oligarchs whose fortunes are deeply intertwined with the Kremlin. For years, these wealthy elites have parked their assets abroad—in Switzerland, the United Kingdom, across Asia, on offshore islands, and within the European Union—whether as investments or as gateways to the lifestyle and security the West affords.
Today, an estimated €210 billion ($245.85 billion) in Russian state and private assets are frozen inside the EU, according to official figures. The question of what to do with this money has become one of the most divisive issues facing the bloc. Ukraine, backed by frontline states such as Estonia, Lithuania, and Poland, has pressed Brussels to move beyond symbolic freezes and seize the assets outright, redirecting them into Kyiv’s defense and reconstruction. Their argument has only sharpened as Ukraine stares at a looming budget shortfall of tens of billions of euros in the coming year.
But Europe’s largest economies have drawn a red line. France and Germany, along with Belgium—home to Euroclear, the securities depository where the bulk of these assets are held—have resisted calls for outright confiscation. Officials in Paris, Berlin, and Brussels argue that such a step would raise profound legal challenges, set a precedent that could spook global investors, and even undermine confidence in the euro. Belgian Foreign Minister Maxime Prévot was blunt: seizing the funds, he said, is “out of the question” for now.
Instead, the EU has pursued a middle path, channeling the profits generated from the frozen assets into Ukraine’s war effort. The arrangement is politically safer and legally less contentious, but it underscores the limits of European resolve. For Kyiv and its most ardent allies, the profits alone are insufficient; for Europe’s heavyweights, outright confiscation carries risks that could reverberate far beyond the battlefield.
What future holds
Ukraine’s strategy for survival and recovery increasingly hinges on two distinct pillars: financial lifelines from the European Union and military hardware from the United States and other allies. Yet that formula raises two critical, unresolved questions. First, what happens to the vast arsenal of weapons, armored vehicles, and advanced military systems pouring into the country if, at some stage, international actors press for disarmament or strict limits on Ukraine’s armed forces? Second, who will take on the enormous task of rebuilding Ukraine’s productive base—its heavy industry, agricultural sector, and core infrastructure—once the war ends?
On the economic front, European partners are already jockeying for position. Germany and the Nordic countries, in particular, have signaled their readiness to play a central role in Ukraine’s reconstruction. This would likely involve both state-backed initiatives and private-sector investment to restart factories, repair production chains, and modernize critical infrastructure. But such support will come with conditions. European capitals are expected to demand stronger transparency, sweeping anti-corruption measures, new elections, judicial reform, and a wholesale strengthening of the rule of law. For investors—and for European taxpayers—guarantees of accountability and democratic renewal will be the price of long-term engagement.
The military question is trickier. A future Ukraine constrained in its ability to produce or field high-grade weaponry might find itself reimagined as a strategic hub, not unlike Turkey’s role in drone manufacturing. With its Black Sea coastline likely reduced in scope, Kyiv could be pushed toward hybrid industrial models that blend its domestic resources—such as chemicals and metals—with defense production lines operated in partnership with American, European, and Canadian firms. Such an arrangement would keep Ukraine tethered to Western supply chains while limiting its independent capacity to manufacture cutting-edge arms, in line with potential postwar security agreements.
For the EU and the West more broadly, these twin issues—reconstruction and rearmament—will shape not just Ukraine’s future, but also Europe’s. At stake is whether the country emerges as a transparent, modern democracy embedded in Western structures, or as a semi-sovereign frontier state, dependent on foreign funding and constrained in its defense.
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