Hal Turner explains why the EU was holding its failed summit yesterday, at which Ursula van der Leyen failed to convince the member states to declare war on Russia by stealing its frozen funds. The problem is that the EU is going to have to return those funds soon, and they’re already being used to prop up loans that will now have to be written off as complete losses, which is going to cause a lot of financial pain to someone:
The United States has notified the European Union that it wants frozen Russian sovereign assets incorporated into a negotiated settlement of the Ukraine war.
That position immediately exposes a major problem for Brussels.
Europe has already functionally collateralized Russian central bank assets — not through formal seizure, but by pledging windfall profits and future proceeds from those assets to support long-term financing and loan structures for Ukraine.
This has been publicly acknowledged in EU and G7 policy frameworks over the past year.
That financing model was built on a core assumption: Either the war would continue indefinitely, or Russia would be decisively defeated.
A negotiated peace breaks that assumption.
Once the United States asserts that frozen Russian assets must be treated as part of a settlement framework, rather than permanent war financing, several consequences follow. The EU’s legal justification weakens, the collateral underpinning those loans becomes unstable, and the long-standing claim that the asset freeze is “temporary” becomes difficult to sustain.
This is not merely a diplomatic disagreement. It is a forced accounting event — one with potential implications for Euroclear, EU financial institutions, and member-state balance sheets.
This context helps explain recent developments in Brussels. Over the past days and weeks, EU leadership has moved rapidly to bypass vetoes, expand emergency authorities, and escalate rhetoric — including renewed NATO statements about preparing for wider conflict.
The underlying strategy appears straightforward: Treat frozen Russian assets as a de facto war chest.
In practice, that step had already been taken through collateralization, even if formal seizure was avoided.
President Trump is now explicitly challenging that structure.
By calling this out, he undermines the financial logic that sustained the war.
All of the bluster and posturing will not disguise the fact that NATO has already lost its war with Russia. The Russians now know that there is no ceasefire or negotiated peace agreement that can be trusted, which is why I expect them to make demands that none of the Western parties want to accept, even though they should.
Frankly, I’m surprised that the Russians are even willing to talk to anyone, given the way they have been relentlessly lied to by everyone, including formerly neutral parties. If I were Putin, I would simply smile politely and grind on until I had exactly what I wanted, then impose a peace agreement with steel teeth.
UPDATE: EU Commission President Ursula von der Leyen, announced that Europe had decided they could provide another $90 Billion in assistance to Ukraine, that Europe “will raise from Capital Markets.” So the Europeans are going into hock for Ukraine, to the tune of about $90 Billion.
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