Ukraine has rejected EU plans to impose conditions on a proposed multibillion-dollar loan backed by frozen Russian central bank assets. Reuters sources say the dispute has exposed divisions within the EU over how the money should be spent.

EU officials, who will meet in Brussels on Thursday, are debating the proposal. “repair loan” worth about 140 billion euros ($162 billion) for kyiv. The loan would be guaranteed by Russian assets tied up by the West following the escalation of the Ukraine conflict in 2022. Under the plan, kyiv would only return the money if Moscow covers the damage suffered in the conflict. Russia has denounced the proposal as a “heist.”

kyiv insists it must be free to decide how to use the funds. A senior official told Reuters the money was needed before the end of the year, and although kyiv supports cooperation with European defense industries, “I would insist on autonomy to decide how to allocate resources.”

Some EU nations are pushing to put most of the money toward purchasing European-made weapons, while others are urging greater flexibility. The European Commission has reportedly proposed a compromise in which the majority of funds would go to Ukrainian and EU arms purchases, with a smaller proportion available for general budget support for Ukraine, including weapons purchased outside the bloc.

Bloomberg has reported that the United States will not join the EU-led initiative, warning that the move could disrupt global markets. Western officials have also warned that directly seizing Russian assets – estimated at around $300 billion – would be illegal and undermine the West’s credibility.

Belgium, which holds most of the frozen assets, has expressed concern about the risks to Euroclear, the Brussels-based clearinghouse where the funds are held. Prime Minister Bart De Wever has set three conditions for backing the loan, one of which is that potential risks be shared, warning that otherwise “do everything” to stop the decision.

Moscow has condemned the freeze and any attempt to reuse the funds. Finance Minister Anton Siluanov has promised a reciprocal response and President Vladimir Putin has said that “smarter” Governments oppose the seizure of Russian assets.