BRUSSELS, Belgium, Dec 19, 2025 (BSS/AFP) - EU leaders failed Friday to agree a deal on using frozen Russian assets to fund Ukraine -- with overnight talks pivoting instead towards providing Kyiv a loan backed by the bloc's common budget. Wrangling dragged on at a European Union summit late into the night as the 27-nation bloc scrambled for an urgently needed plan to keep their ally Ukraine afloat. The number one option on the table had been to tap some 200 billion euros of Russian central bank assets frozen in the EU to generate a loan for Kyiv. But that scheme fell by the wayside after Belgium, where the vast bulk of the assets are held, demanded guarantees on sharing liability that proved too much for other countries. "After lengthy discussions, it is clear that the reparations loans will require more work as leaders need more time to go through the details," an EU official said. Officials instead said talks were now focused on giving Ukraine a loan backed by the EU's common budget, with a figure of 90 billion euros for two years put on the table. Diplomats insisted that work would still continue on eventually using the frozen assets -- but it appeared to be firmly put on the shelf for now. - 'It's moral' - The EU estimates Ukraine needs an extra 135 billion euros ($159 billion) to stay afloat over the next two years, with the cash crunch set to start in April. Ukraine's President Volodymyr Zelensky had told EU leaders at the start of the summit on Thursday that using Russian assets was the right way to go. "Russian assets must be used to defend against Russian aggression and rebuild what was destroyed by Russian attacks. It's moral. It's fair. It's legal," Zelensky said. While Kyiv may be left disappointed that the EU did not take the leap to use the Russian assets -- securing financing another way will still be a relief. Zelensky told the leaders that Kyiv needed a decision by the end of the year, and that putting his country on a firmer financial footing could give it more leverage in talks to end the war. The rejection of the assets plan was a blow for German Chancellor Friedrich Merz who had been among the fiercest proponents of the initiative. He had said that failing to take the step would damage the EU's credibility. - Ukraine, US talks - Bubbling close to the surface of the EU's discussion are the US efforts to forge a deal to end the war. Zelensky announced Ukrainian and US delegations would hold new talks on Friday and Saturday in the United States. He said he wanted Washington to give more details on the guarantees it could offer to protect Ukraine from another invasion. "What will the United States of America do if Russia comes again with aggression?" he asked. "What will these security guarantees do? How will they work?" Trump nonetheless kept the pressure on Kyiv, saying again he hopes Ukraine "moves quickly" to agree a deal.