BRUSSELS — Thursday’s European Council is the bloc’s last chance to show it can be more than a talking shop.

Facing a growing rift with the U.S., and a Ukraine that is set to run out of cash in the first half of next year, the summit will show whether the EU’s leaders can actually deliver — or if their national differences are too big to overcome.

The burning question is whether the EU can convince Belgium to get on board with its plan to syphon billions in frozen Russian assets to Ukraine to keep it solvent. If the EU fails it will be “severely damaged” for years to come, German Chancellor Friedrich Merz warned.

POLITICO’s liveblog is in full flight with all the details — but here’s your cheat sheet on what to watch for.

The €210 billion question 

After failing to reach a deal at the last European Council in October — or in the several rounds of urgent talks and behind-the-scenes wrangling that have taken place since — Thursday is the last chance for EU leaders to green-light a proposal to leverage €210 billion in Russian assets across the bloc to fund a loan to Ukraine. 

Belgium’s support is crucial, as the bulk of the frozen assets lie in the Brussels-based financial depository Euroclear, and its government fears being on the hook for substantial damages or retaliation from Moscow.

Despite weeks of persuasion, Belgian Prime Minister Bart De Wever — a Flemish right-winger with a reputation for intransigence — hasn’t budged and continues to enjoy strong domestic support. Less than 24 hours before crunch time the Belgian ambassador told peers during closed-door talks that “we’re going backward.”

Italy, Bulgaria and Malta have also signaled their opposition.  

This is all bad news for Ukraine, which faces a €71.7 billion budget shortfall next year and will have to start cutting public spending as of April. 

Could Belgium be sidelined? 

Some member countries, such as Germany and Latvia, have suggested making the decision to seize the assets by qualified majority voting, rather than by unanimity, effectively sidelining Belgium.  

In that case, 15 out of 27 member states would need to vote in favor. But Belgian officials told POLITICO there’s no point in trying to overrule their concerns as the funds in the Euroclear depository would simply not be released. 

A senior EU official, granted anonymity to speak freely, told POLITICO the whole point of Thursday’s summit is to convince Belgium to drop its opposition, even if it means meeting late into the night. 

If not assets, then what?  

If there’s no deal on the assets then the EU will have to find another way to prop up Ukraine, which it committed to doing one way or another at the last summit in October. 

On Wednesday evening Europe’s leaders were split into irreconcilable camps, at least publicly, and seemed unlikely to agree on how to fund Kyiv. But the first contours of a potential route out of the impasse — one that would have to be hashed out during hours of negotiations — are beginning to take shape, with diplomats working on a long-shot 11th-hour compromise to salvage a deal.

European Commission President Ursula von der Leyen has cautiously opened the door to joint debt, backed by the EU’s next seven-year budget, as a back-up plan.

“I proposed two different options for this upcoming European Council, one based on assets and one based on EU borrowing. And we will have to decide which way we want to take,” she said during a speech at the European Parliament in Strasbourg on Wednesday morning.

The key to such a plan would be carving Hungary and Slovakia — which both oppose giving further aid to Ukraine — out of the joint debt scheme, four EU diplomats told POLITICO. A deal could still be agreed at the Council among the 27 EU countries, but the ultimate arrangement would stipulate that only 25 would be involved in the funding. 

About that peace deal  

Washington shocked Ukraine and its European allies when it produced a plan to end the war that was replete with major concessions to Russia, including handing over large swathes of Ukrainian territory and capping the size of Kyiv’s military. After frenzied talks from Geneva to Berlin, Kyiv and its allies successfully lobbied for an alternative plan, which includes an offer by American officials to provide a NATO-style security assurance to protect Ukraine. 

“For the first time since 2022, a ceasefire is conceivable,” Merz said at a press conference with Ukrainian President Volodymyr Zelenskyy on Monday. Zelenskyy is expected to attend the summit and to update leaders on the progress of the negotiations.

U.S. and Russian officials are expected to meet in Miami this weekend to continue talks.

According to draft conclusions obtained by POLITICO, the EU will commit to providing “robust and credible security guarantees for Ukraine” — and, in a thinly veiled rebuke to Washington calling the shots, the bloc is set to declare that it “will decide on matters of its competence or affecting its security.” 

Making the EU competitive 

As the EU launches various measures to revitalize its sputtering economy, the focus of talks will be how external pressures (read: the U.S. and China) are impacting the bloc’s drive to become competitive.

The draft conclusions are light on details or deliverables, saying simply that the EU’s leaders “held a strategic discussion about the geoeconomic situation and its implications for the EU’s competitiveness.” 

A senior EU official clarified to POLITICO that the leaders are set to discuss how to handle the U.S. and Chinese postures in the global economy. Washington has shaken up the global trade order with its punishing tariffs while Beijing has alarmed Brussels by ramping up its rare earth export controls.

And … Mercosur?

One thing that is not officially on the agenda is the Mercosur trade deal, which would create an enormous free trade zone with the South American bloc of countries and is finally on the cusp of being agreed after 25 years of talks.  

France, and now Italy, want to delay a crucial vote on the deal over concerns about safeguards for the agricultural sector. But Denmark, which holds the presidency of the Council of the EU, has vowed to hold the vote in time for von der Leyen to fly to Brazil on Dec. 20 to sign the deal.  

While the vote isn’t set to be discussed on Thursday, that doesn’t mean it won’t come up when the leaders gather.

Enlargement is back on the agenda 

On Wednesday, leaders from the Western Balkans countries convened in Brussels to discuss taking forward their countries’ bids to join the bloc. Montenegro, the most advanced candidate, closed five accession chapters this week and is vying to join the bloc by 2028.

With enlargement finally a real possibility in the not-too-distant future, the topic — which was not on the agenda at the summit in October — has returned to the fore. Leaders are set to endorse growing the bloc and to discuss “internal reforms,” according to draft conclusions. That’s shorthand for overhauling how the EU makes decisions so that a bloc with 30-plus members isn’t paralyzed.  

Gabriel Gavin, Gregorio Sorgi and Camille Gijs contributed to this report.