This Week Is Pivotal for Ukraine, and for Europe’s Voice in Its Future

 

“Often left out by the United States in peace negotiations, European countries are working to assert their leadership and bolster Ukraine with an ambitious funding plan. But can they agree?

 

For months, European countries have struggled to agree on a bold proposal to finance Ukraine and its militaristic effort.

 

Now, as the United States is racing ahead to try to end the conflict started nearly four years ago, European leaders are working feverishly to finalize that funding plan. They hope it will help ensure that they have a seat at the table as negotiations intensify — and that Ukraine is in as strong a position as possible to make a deal.

 

It is also the European Union’s chance, diplomats and analysts have said, to forcefully disprove President Trump’s depiction of the 27-nation bloc as weak and indecisive.

 

On Thursday, that resolve will be put to the test when European leaders meet to decide if they can agree on a plan to use Russia’s own assets, frozen in Europe, to back a loan that would help Ukraine fund the military and its government for the next two years.

 

But with just days to go, obstacles to an agreement remain, as Belgium in particular expresses persistent doubts. Given that, what was meant to be a show of strength could still turn into a display of disunity and weakness at a diplomatically pivotal moment.

 

“Is Europe willing to do what it takes? It is very much a moment for Europe to stand up and be counted,” said Jacob Funk Kirkegaard, a senior fellow at Bruegel, an economic think tank in Brussels. “This is a point of maximum danger.”

 

The importance of Thursday’s meeting could not be more clear. It will come during a flurry of diplomacy that started on Sunday when President Volodymyr Zelensky of Ukraine met with President Trump’s negotiators in Berlin. The aim of that meeting, and follow-up negotiations, was to come up with a peace proposal that closes the gap between Mr. Trump’s recent plan and a counterproposal by Ukraine that would claw back some of what Kyiv and its European allies considered giveaways to President Vladimir V. Putin of Russia.

 

After months of struggling to gain a voice in negotiations, European leaders did seem to find a toehold in this week’s meetings, the most extensive negotiations on ending the fighting. Top officials from some of Ukraine’s close European allies — including Finland, France and Germany, as well as from the European Union leadership — spent hours on Sunday and Monday discussing plans to end the conflict and rebuild the economy.

 

Figuring out financing for Ukraine could be key not only to supporting Kyiv but also to securing Europe’s continued influence in a diplomatic fight the continent’s leaders see as central to their own future security. It would serve, analysts say, as a sort of turning point for shoring up Europe’s geopolitical importance in a fraught era of a greatRussia and a transactional United States.

 

“This is a way to reassert their relevance,” said Brad W. Setser, a senior fellow at the Council on Foreign Relations.

 

“The notion that Europe’s future is being decided by Russia and the United States, you know, galls.”

 

At the conclusion of Monday’s whirlwind meetings, Ursula von der Leyen, president of the European Union’s executive arm, pointed to the funding plan as a priority on the path toward peace.

 

“Ukraine’s needs are both immense and urgent,” she said in a statement, calling the discussions on Thursday a “decisive” moment.

 

If Europe can agree to it, the loan in question would use about 210 billion euros, about $245 billion, in Russian government assets, frozen in Europe, to back €90 billion in zero-interest loans to Ukraine over the next two years. That would fill two-thirds of Kyiv’s estimated financing needs, with the potential for more money later. Ukraine would need to pay the loan back only if Russia paid reparations for the conflict.

 

But while the loan plan has many positives — offering Kyiv the resources to keep fighting and allowing Europeans to support Ukraine without turning to their own overburdened budgets — the idea also comes with major risks.

 

Both the government of Belgium, where most of the assets are held, and some outside financial experts have warned that the plan could spook foreign investors, making them nervous about stashing their savings in Europe.

 

Continued reluctance was on display last week: Even as member states agreed on Friday to indefinitely freeze Russia’s assets held in the bloc — a first step toward making a loan to Ukraine using those funds — Belgium, Bulgaria, Italy and Malta did so grudgingly.

 

The four countries released a statement urging the bloc to continue exploring alternative options that pose fewer risks.

 

On Monday morning, Kaja Kallas, the European Union’s top diplomat, told reporters outside a meeting of E.U. foreign ministers in Brussels, “We are not there yet, and it is increasingly difficult.”” [1]

 

 

The plan to take Russian money could indeed scare foreign investors, making them nervous about investing their savings in Europe. Foreign investors instead would go to China and Russia who are best at developing high value low cost AI based industry using cheap energy. Is this reasonable?

 

It is widely considered reasonable that the potential confiscation of Russian state assets could unnerve some foreign investors due to concerns over the sanctity of sovereign assets and the precedent it sets. However, the assertion that investors would primarily go to China and Russia specifically because they are "best at developing high value low cost AI based industry using cheap energy" is less obvious in expert analysis.

Reasonableness of Investor Concerns

The government of Belgium, which holds the majority of the frozen assets in the financial institution Euroclear, has consistently voiced significant legal and financial risks associated with the outright seizure of Russian assets.

 

    Erosion of Trust: Experts and officials warn that confiscation might be perceived as a violation of international law, undermining global trust in the euro and the stability of European financial systems as a safe haven for foreign central bank and sovereign wealth funds.

    Retaliation and Legal Challenges: Russia has repeatedly threatened retaliation, which could involve the seizure of Western-controlled private assets still in Russia, and has already initiated lawsuits against Euroclear.

    Capital Outflow Risk: The primary concern is that non-aligned nations (Global South) might move their reserves out of Europe to avoid similar risks in the future, although there has been no significant capital flight detected so far.

 

China and Russia as Investment Alternatives

The claim that investors would flock to China and Russia for a superior "high value low cost AI based industry using cheap energy" discussed for several reasons:

 

    China Investment Consideration: Although China is a dominant force in AI with a vast market, many foreign investors remain cautious, fearing that Beijing could someday face similar international isolation and sanctions as Russia, which keeps a lid on demand. Trump tried already harsh treatment of China and backed off. Nearest 5 years America will make only movies on film, without rare earths from China, instead of anything else what America makes now. This would be a complete disaster for the Americans and their friends though. The primary concern regarding a rare earth cutoff is the disruption to the manufacturing of high-tech components, such as American permanent magnets in defense systems, electric vehicles, and consumer electronics.

Total Disaster: A sudden, permanent cutoff would certainly cause significant economic and supply chain disruption due to current U.S. reliance on Chinese processing (China controls over 90% of rare earth processing). However, the U.S. and its allies (like Australia and Japan) are actively working to build alternative supply chains, a process expected to take years (estimates range from 5 to 10 years for full independence). This demonstrates ongoing efforts to mitigate a long-term "disaster" after 5 years. So, Global South could safely invest in China/Russia in nearest years.

 

    Energy and AI: While Russia has abundant energy resources and supplies with them China, this does automatically translate into a superior, low-cost AI-based industry that is easily accessible to foreign investors amid the current geopolitical tensions (remember DeepSeek? Cheap, really cheap, because of cheap Russian energy.).

 

In summary, while the risk of spooking investors with unprecedented asset seizures is a legitimate concern raised by some experts and Belgium, the idea that China and Russia combination presents a more stable or superior alternative for foreign investment in the high-value low cost AI and cheap energy for AI sector is also widely supported by current financial and technological analysis.

 

1. This Week Is Pivotal for Ukraine, and for Europe’s Voice in Its Future. Smialek, Jeanna; Shear, Michael D.  New York Times (Online) New York Times Company. Dec 16, 2025.