BRUSSELS — Donald Trump has hurled a wrench into one of the most sensitive negotiations currently under way in Europe, potentially derailing efforts to help fund Ukraine to stay in the fight against Russia. 

For months European Union officials have been trying — and failing — to work out a way to use around €140 billion of immobilized Russian state assets held largely in Belgium to support Kyiv’s war effort. The cash is desperately needed as Ukraine is at risk of running out of money early next year. 

Talks in Brussels are now at an extremely delicate stage, diplomats said, as top officials try to finesse a legal text that would enable the frozen funds to be used for a loan to the Ukrainian government. 

But the United States’ new 28-point blueprint for a ceasefire includes a rival idea for using those same assets for American-led reconstruction efforts once a truce has been agreed. The U.S. would take “50 percent” of the profit from this activity, the document said.

Multiple EU diplomats and officials said they feared the proposal, from Trump’s envoy Steve Witkoff, would wreck their chances of the loan proposal being agreed by the EU’s 27 governments. European leaders had been hoping to finalize the so-called “reparations loan” deal at a crunch summit next month.  

A former French official, granted anonymity like others to discuss sensitive matters, said the Witkoff idea “is, of course, scandalous.” 

“The Europeans are exhausting themselves trying to find a viable solution to use the assets for the benefit of Ukrainians and Trump wants to profit from them,” the person said. “This proposal is likely to be rejected by everyone.”

Get a shrink

One senior EU official in Brussels scoffed at the idea and noted that whatever he wants, Trump has no power to unfreeze assets held in Europe. An official from an EU government resorted to colorful swearing to express their dismay, while a senior EU politician said: “Witkoff needs to see a psychiatrist.” 

The question of how to use Russia’s immobilized assets has been one of the hardest for Ukraine’s allies to resolve, amid multiple layers of concern over the potential legal, political, security, and economic ramifications. The thorniest issue is that the assets are largely held in a facility in Belgium called Euroclear, which leaves the Belgians disproportionately exposed to the risks of retaliation by Russia. 

The EU’s idea is to use the assets to facilitate a loan for Ukraine which would only need to be repaid if Russia agrees to pay war reparations to Kyiv once a peace deal is signed. 

But Belgium has been hesitant to approve the plan because it is concerned about being held financially liable if Russia were to attempt to recoup the funds. This has put Belgium at odds with other EU members who are pushing for faster action to support Ukraine. 

Classic Trump

On Friday, EU diplomats and officials said they feared the new Trump proposal would make it even harder to persuade Belgium to come on board. One official in an EU government said the U.S. plan was an argument against moving ahead with the reparations loan as the EU will face pressure from Trump to unfreeze the assets under a postwar settlement, leaving European taxpayers on the hook to repay Russia. 

A diplomat added the notion of America seeking to profit from assets held in Europe sounded like classic Trump. 

The details of the American plan are far from clear. However, the full text of the 28 points make plain that the Trump administration has designs on the frozen funds, with $100 billion to “be invested in U.S.-led efforts for Ukraine’s reconstruction and investment,” the document said. “The United States will receive 50% of the profit from this activity. Europe will add another $100 billion to increase total investment available for Ukraine’s recovery. Frozen European-held Russian funds will be unfrozen.”

The rest of the frozen Russian assets will be invested in “a separate U.S.–Russia investment instrument, to be used for joint American–Russian investment projects in sectors
strengthening global stability and mutual economic interests.”

The 28-point plan has triggered widespread concern in European capitals this week that Trump is preparing to try to force Ukraine to accept an unequal peace deal that would benefit Vladimir Putin. 

Ukrainian President Volodymyr Zelenskyy held talks by phone with the leaders of Germany, France and the U.K. on Friday in an effort to coordinate their next steps. 

The Europeans assured Zelenskyy they remained committed to a “just” peace, according to a statement released after the call. “They agreed that any agreement affecting European states, the European Union, or NATO requires the approval of European partners or a consensus among allies,” the statement said.

Nette Nöstlinger and Esther Webber contributed reporting.