Portugal Colonial - Crunch time for EU leaders on tapping Russian assets for Ukraine

The 27-nation bloc was scrambling to bolster its ally Kyiv as US President Donald Trump pushes for a deal with his Russian counterpart Vladimir Putin to end the fighting.

Officials have insisted the summit in Brussels would last as long as it takes to hammer out an agreement, saying both Ukraine's survival -- nearly four years into the war -- and Europe's credibility are at stake.

Belgium, where international deposit organisation Euroclear holds the bulk of the assets, has so far been resisting the move over fears it could face crippling legal and financial reprisals from Russia.

But after a day of last-ditch negotiations on the sidelines of the summit, a new draft plan that appeared to cover most of Belgium's worries was put to the leaders.

Among the key concessions it made to Belgian leader Bart De Wever was to float other EU countries giving "uncapped" guarantees they would share any liabilities if Moscow sues.

Diplomats said that would be an unacceptable pill for many to swallow -- and reaching a final deal was far from assured.

"The devil is in the details, and it remains to be seen whether the other member states are willing to grant open guarantees," one EU diplomat told AFP on condition of anonymity.

- '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.

The unprecedented scheme on the table would see an initial 90 billion euros from the Russian assets loaned to the EU, which would then loan them on to Ukraine.

Kyiv would then only pay back the "reparations loan" once the Kremlin compensates it for the damage.

Zelensky told the leaders that Kyiv needed a decision on its financing by the end of the year, and that the move could give it more leverage in talks to end the war.

"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.

He warned that one effect of Ukraine not getting the funding would be that it might have to cut its vital drone production.

A raft of EU leaders argued strongly in favour of tapping the assets, saying propping up Ukraine was key to protecting the rest of Europe.

"We have a simple choice: either money today, or blood tomorrow. I'm not talking about Ukraine only, I'm talking about Europe," Polish Prime Minister Donald Tusk said.

The EU has also floated a back-up plan for the bloc to raise the money itself for the loan -- but that was put on the back-burner as officials focused on getting the assets scheme over the line.

- 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.

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.

X.M.Francisco--PC