The pressure on EU leaders to seize Russia’s $300bn in frozen Central Bank of Russia (CBR) funds is building as the US threatens to withdraw its support for Ukraine completely, but there is no consensus on the move yet, Polish Prime Minister Donald Tusk said at the London summit on March 2.

"Everyone understands it would be best to transfer these funds for the purpose of defence and reconstruction of Ukraine," Tusk said during the summit, but admitted there is still no consensus on the decision amongst EU members.

Leaders from top EU countries met in an emergency meeting, called by UK Prime Minister Sir Keir Starmer after a press conference with US President Donald Trump and Ukrainian President Volodymyr Zelenskiy blew up into a shouting match between the two on February 28 that appears to have ended any possibility of further support by the White House. Zelenskiy left Washington without signing a harsh minerals deal with Washington, a key demand by Trump, and the Trump administration spokesperson announced that all military and financial aid has been suspended.

EU leaders are trying to rescue the relationship, but Trump has already indicated that he expects Europe to carry the can from now on as Ukraine’s worst fears come true.

Leading countries such as Germany have opposed the idea, which they fear will destabilise the European banking sector, provoke a storm of litigation by Russia, result in seizures of foreign assets stranded in Russia and undermine confidence in the euro.

While central bank reserves have been frozen in other wars, they are usually returned after the war, as there is no clear legal basis for confiscating another country’s reserves.

Kyiv is currently well funded following a surge in military and financial aid at the end of last year by the outgoing Biden administration.

For the first time in the war, Ukraine received its annual foreign aid in advance in January. Thanks to the $50bn Extraordinary Revenue Acceleration (ERA) backed by the profits from the frozen CBR money, Ukraine will fully cover its $38bn 2025 budget deficit, the Centre for Economic Strategy reported last month.

Consequently, the country's parliament can allocate an additional $5-7bn for defence using income received from frozen Russian assets.

In addition, the National Bank of Ukraine (NBU) has a comfortable $48bn in reserves.

However, the NBU expects that Ukraine's international aid will start to decrease going forward, particularly in 2025, as the country's economic situation stabilises: this year Ukraine is expecting $38.4bn; in 2026 it will receive $25bn, and $15bn in 2027.

The EU is holding its own summit on March 6 where it will discuss a new comprehensive defence package for Ukraine to allow it to continue to defend itself against Russian aggression.

European Commission President Ursula von der Leyen said during the London summit: “Europe needs to rapidly build up its own defences.”

The ERA has become the main financial backstop for the budget and unlike the loans from Ukraine’s partners that have driven up external debt to 87% of GDP, does not have to be repaid by Ukraine as the loans are severed by the income generated by frozen Russian assets.

In January, Ukraine secured $3.1bn in support from the EU through the ERA mechanism to contribute to funding a war that is costing an estimated $100bn a year that the US has played a key role in funding Ukraine.

The Ukrainian government also raised an additional $700mn in equivalent by issuing government bonds on the domestic market. Notably, an IMF mission is slated for the seventh review of the EFF programme. If the review goes well, Ukraine is set to receive $917.54mn.

In addition, eleven EU countries have agreed to individual support on a bilateral basis.

During the summit, ​Starmer announced a GBP1.6bn ($2bn) agreement to supply Ukraine with over 5,000 air defence missiles, enhancing Kyiv's defensive capabilities as part of a new “100-years partnership” between the UK and Ukraine announced last month.

The missile package includes advanced systems such as the Starstreak high-velocity missile, the Brimstone ground-attack missile and the powerful Storm Shadow cruise missile. The Starstreak system is designed to engage fast-moving aircraft and helicopters, offering a rapid-response defence mechanism. The Brimstone missile provides precision targeting against ground vehicles, while the Storm Shadow offers long-range strike capabilities against high-value targets. ​

Before the summit, the eleven countries announced military, financial, and humanitarian aid to Ukraine for the rest of this year. Not all of these packages are new: in some cases, they are supported for a year that was already announced last year. Some of the aid was announced on the anniversary of Russia's full-scale invasion of Ukraine on February 24.

The main elements of the new packages include:

1. The EU committed to providing €35bn in financial assistance through the G7 ERA credit initiative and the Ukraine Facility programme.
2. The US revealed its latest military aid package assembled under President Biden: The €500mn package includes additional air defence missiles, ammunition, and equipment for F-16s.
3. The UK will allocate €5.4bn in military assistance to Ukraine this year, with a €200mn package announced at the last Ramstein conference.
4. Canada will provide €3.4bn in financial support through the G7 package, and transfer 25 LAV II infantry fighting vehicles, a landing system for F-16 fighters, flight simulators, ammunition and military equipment.
5. Norway will spend over €2bn on military aid and more than €1bn on humanitarian aid.
6. Switzerland has approved €1.6bn for Ukraine’s reconstruction and development in 2025-2028. This programme is the first phase of a €5.3bn aid initiative announced last year.
7. Sweden has already announced military aid deliveries twice this year, making this the largest package in three years, at €1.2bn, along with a transfer air defence systems worth €100mn.
8. Spain will allocate €1bn for military aid this year.
9. Denmark confirmed the transfer of 12 of the 19 promised F-16 fighters and will deliver the remaining aircraft within the year. The country has also set aside €200mn for military aid and €50mn for humanitarian assistance.
10. Poland announced military aid totalling €200mn, while Finland pledged a matching amount of support.

During the upcoming EU summit this week, the EU foreign ministers are due to discuss an additional €20bn defence package, but that has already proved controversial as member states begin to wrangle over “load sharing.” The package was discussed in London, but little progress was made, according to reports.

Despite the European largess, a lot more money will be needed. The World Bank recently increased its estimate for what is needed to rebuild the country.

“The total cost of reconstruction and recovery in Ukraine is $524bn (€506bn) over the next decade, which is approximately 2.8 times the estimated nominal GDP of Ukraine for 2024,” the World Bank said in a statement on February 25.

The leaders from 18 countries are looking for a way out of the war that keeps the US on board as a partner. Starmer and French President Emmanuel Macron proposed a one-month truce covering air, sea and infrastructure, aimed at building trust and assessing Russia's commitment to de-escalation at the conference and as part of a ceasefire plan the EU intends to present to the White House later this month. For his part, Trump has said that he wants to end this war “quickly, or not at all.”

The London summit also addressed the need for a "coalition of the willing" to enforce any potential peace agreements and provide peacekeepers to Ukraine. This coalition would involve European nations committing troops, led by the UK and France, to uphold the terms of any ceasefire and ensure Ukraine's sovereignty is maintained. ​