Kiev is reportedly seeking a flexible use of the funds, while some EU states want spending limited to European-made weapons

Ukraine has pushed back against EU plans to impose conditions on a proposed multi-billion-euro loan backed by frozen Russian central-bank assets. Reuters sources indicate that the dispute has exposed divisions within the EU over how the money should be spent.

EU officials, who are meeting in Brussels on Thursday, are debating the proposed "reparations loan" worth about 140 billion ($162 billion) for Kiev. The loan would be secured by the Russian assets immobilized by the West after the escalation of the Ukraine conflict in 2022. Under the plan, Kiev would only repay the money if Moscow covers the damages incurred in the conflict. Russia has denounced the proposal as a "theft." 

Kiev insists it must be free to decide how it can use the funds. A senior official told Reuters that the money was needed before year-end, and while Kiev supports cooperation with European defense industries, it "would insist on autonomy in deciding how to allocate resources." 

Some EU nations are pushing to direct most of the money toward the purchase of European-made weapons, while others urge greater flexibility. The European Commission has reportedly proposed a compromise where most of the funds would go to Ukrainian and EU arms purchases, with a smaller share available for Ukraine's general budget support, including weapons bought outside the bloc.

Bloomberg has reported the US will not join the EU-led initiative, warning that the move could unsettle global markets. Western officials have also cautioned that seizing Russian assets outright - estimated at around $300 billion - would be illegal and undermine the West's credibility.

Belgium, which holds most of the immobilized assets, has voiced concern over risks to Euroclear, the Brussels-based clearinghouse where the funds are kept. Prime Minister Bart De Wever has set three conditions for backing the loan, one of which is that the potential risks be shared, warning that otherwise he would "do everything" to stop the decision.

Moscow has condemned the freeze and any attempt to repurpose the funds. Finance Minister Anton Siluanov has promised a reciprocal response, and President Vladimir Putin has said that the "smarter" governments oppose the seizure of Russian assets.