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Spain Suggests EU Use Frozen Russian Funds for Defense and Ukraine Aid
Spain has called on the European Union to create a new defense fund that would use immobilized Russian central bank assets to support Ukraine and strengthen Europe’s defense systems. The proposal comes as the EU faces growing pressure to invest in its own security amid doubts about long-term U.S. support.
Speaking at an EU finance ministers' meeting in Warsaw, Spain’s Economy Minister Carlos Cuerpo said the time has come for a united effort to protect Europe and its neighbors.
“We must invest together in defense. It is a European public good that keeps our citizens safe and supports economic security,” he said.
What Is Spain Proposing?
Spain is pushing for a temporary defense fund that would give out non-refundable grants to EU countries, especially those on the eastern border like Poland and the Baltics, which are more exposed to the Russian threat.
This fund would be supported by:
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Contributions from EU countries
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EU-issued debt
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The European Stability Mechanism (ESM)
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And part of the €200 billion in frozen Russian central bank assets held in European institutions
This marks a more ambitious approach than previous plans that relied mainly on soft loans.
Divided Opinions Among EU Nations
While some EU members are open to the idea, others — particularly Germany and Belgium — have concerns. They fear that directly using frozen Russian assets could harm financial stability and the euro’s global reputation.
Still, the European Commission said it is open to exploring new options. Valdis Dombrovskis, EU’s economic chief, said Spain’s proposal fits with the ongoing conversation about support for Eastern Europe.
Poland’s Finance Minister, who hosted the meeting, noted that many EU members now agree that additional defense funding tools are needed.
How the EU Has Used Russian Assets So Far
So far, the EU has used interest earned from frozen Russian funds to support Ukraine’s state budget, as part of a $50 billion aid package from the G7 nations. Spain’s proposal goes further by suggesting the actual assets be used for defense purposes — a move that is more controversial.
Broader EU Defense Plans
The EU is already planning to launch a €150 billion loan-based plan to support key defense industries across Europe. Brussels is also looking at:
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Adjusting its budget rules to allow more national defense spending
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Redirecting some of the €392 billion cohesion fund toward military projects
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Updating European Investment Bank policies to support defense companies
In addition, talks are ongoing about a European Defense Mechanism (EDM) — a joint initiative for procuring and managing military assets across the bloc.
