US’s “Frenemy Fund” for Frozen Russian Assets

US’s “Frenemy Fund” for Frozen Russian Assets: A Geopolitical Gambit Leaving the EU on Read

Brussels just got a notification from the group chat, and let’s just say it was left on “read.” In a geopolitical chess move worthy of a Netflix drama you’d binge at 2 AM, the US has reportedly floated a plan for frozen Russian assets that has European leaders searching for the nearest strong drink.

The idea? To create a joint investment fund with both Moscow and Kyiv to finance Ukraine’s reconstruction.

Let’s be real, this isn’t just a different strategy; it’s like showing up to a chess match with a Super Soaker. Brussels was carefully building a legal Jenga tower to skim profits off Russia’s frozen cash to help Ukraine. The American proposal doesn’t just nudge the tower—it kicks the whole table over, potentially letting Russia, the guest who started the food fight, get a slice of the apology cake. This bonkers US proposal raises some juicy questions about whether the transatlantic alliance is still BFFs, how Ukraine is supposed to rebuild, and if international justice is having a bit of a mid-life crisis. So grab your popcorn. Or a notepad. Or both. We’re breaking it down.

A shocking American proposal to create a $100 billion investment fund using frozen Russian assets to rebuild Ukraine, with profits controversially split between the US (50%), Ukraine (25%), and Russia (25%).

What is This Bonkers US Proposal?

Alright, let’s get into the weeds of these US-led efforts. But don’t worry, I brought a weed-whacker and some terrible puns. According to the rumor mill (and, you know, Reuters), the US has been whispering about a new financial arrangement that is, to put it mildly, audacious. It’s supposedly part of a larger, hush-hush potential peace deal.

Now, before your eyes glaze over like a Krispy Kreme, here’s the gist of how they’d handle the nearly $300 billion in Russian assets that have been sitting in timeout since the 2022 invasion.

The Three-Way Financial Frenemy Fund: The plan suggests scooping up a giant pile of the frozen money—we’re talking a cool $100 billion—and dropping it into an investment fund designed to rebuild and invest in Ukraine.
The Profit-Sharing Model That Made Everyone Spit Out Their Coffee: And here’s the kicker. The profits from this fund would be split. The United States would allegedly take a whopping 50%. The other half? Split evenly between Ukraine (for reconstruction) and… Russia. Yes, that Russia.
“Trust Us, We’ll Watch Them”: The money for Kyiv and Moscow wouldn’t just be handed over in a duffel bag. The plan says the US would keep a tight leash on the funds to make sure they’re used for “approved” projects.

To call this a curveball is an insult to curveballs everywhere. The idea of Russia getting any financial gain from assets frozen because of its invasion is so politically radioactive in Europe it glows in the dark. It’s like grounding your kid for breaking a window, then offering them a commission on the repair job.

The European Union's cautious and legally distinct strategy to only skim the interest and profits from the frozen assets to fund Ukraine, a plan which is now threatened by the more aggressive and legally questionable US proposal.

Brussels in the Dark: Why the EU Plan is Under Threat

Meanwhile, across the pond, the entire European Union is collectively asking, “Um, did anyone run this by us?” Officials in Brussels feel like they meticulously planned a surprise party, only for the US to show up a day early with a different birthday boy and a pony. A mean pony.

The EU holds most of Russia’s frozen assets (around $280 billion worth) and has spent over a year tiptoeing through a legal minefield to help with Ukraine funding.

Their strategy was way more cautious, kind of like a dad trying to assemble a trampoline on Christmas Eve without waking the kids. It hinged on one key difference:

Principal vs. Profits: European leaders have been adamant that to seize frozen Russian assets—the principal—is a big no-no under international law, as they are sovereign assets. It could set a scary precedent and make other countries think twice about parking their cash in Europe.
The “Windfall” Loophole: Their clever solution was to target the unexpected interest and profits these assets were generating while just sitting there. The plan was to skim these billions off the top each year and use them to buy arms for Ukraine’s military and other aid.

The American proposal basically ignores all of that hard work. By suggesting they use the principal and—cue dramatic pause—give Russia a cut, Washington is seen as trashing the EU’s homework.

“We have spent months debating legalities… To learn that the US is floating a completely different idea, one that rewards Russia, without any meaningful consultation, is deeply concerning.”

You feel me? The vibe in Brussels is that Uncle Sam is going rogue, driven by its own goals, and isn’t worried about the diplomatic mess it leaves behind.

The difficult position of Ukraine, which is being offered a massive sum for reconstruction but at the unacceptable political price of partnering with its aggressor, Russia, in a joint venture, representing a 'poisoned chalice'.

A Poisoned Chalice for Kyiv?

For Ukraine, this proposal is like being offered a lifetime supply of your favorite food, but you have to eat it while sitting next to the guy who burned your house down. It’s a poisoned chalice.

On one hand, the idea of unlocking $100 billion for Ukraine reconstruction is incredibly tempting. The World Bank says Ukraine needs nearly half a trillion dollars to rebuild. This fund could be a massive shortcut.

But the fine print is a killer.

Partnering with the Enemy: Can you imagine President Zelenskyy shaking hands on a deal that puts Ukraine on equal footing with Russia in a joint venture? It would be a catastrophic blow to national morale and a betrayal of everyone who has fought for their country’s survival. It also circumvents the path of justice through war reparations.
The “Other” Conditions: Oh, and there’s more. Reports suggest this whole fund is tied to a bigger peace deal where Ukraine would have to ditch its dream of joining NATO and possibly accept losing territory. These are the very things they’ve been fighting against.

Accepting this plan would mean swapping long-term security for short-term cash. Even with their desperate need for funds, the political price is just too high. It basically gives the bully his lunch money back, plus interest, instead of making him pay for the damages.

An analysis of the potential US motives behind the proposal, suggesting a mix of pragmatic peacemaking, significant financial self-interest (securing 50% of profits), and a strategic power play to assert dominance over the EU and gain leverage over both Kyiv and Moscow.

Unpacking the Geopolitical Chessboard

Hot take coming in 3…2…1… Why would the US even suggest something this chaotic? While nobody in Washington is officially copping to it, we can read between the lines. It’s a classic game of geopolitical chess, or maybe just a clumsy game of checkers. Here are a few possibilities.

The Pragmatic Peacemaker: The most generous take is that the White House sees a never-ending war and is trying to get creative. Offer both sides a financial cookie—reconstruction money for Ukraine, some assets back for Russia—and maybe, just maybe, they’ll stop fighting and reach an eventual peace agreement.
The “Show Me the Money” Angle: Let’s not ignore that massive 50% profit share for the US. This isn’t just about making peace; it’s about securing a prime seat at the reconstruction table and a hefty financial return.
A Transatlantic Power Play: This could also be a not-so-subtle reminder to the EU about who really runs the show in the transatlantic alliance. By proposing a bold, unilateral plan, Washington flexes its muscles and shows it won’t wait for Europe’s slow, 27-member consensus.
The Puppet Master Strategy: Control the money, control everybody. As the manager of this fund, the US would have enormous leverage over both Kyiv and Moscow’s economic futures for decades.

The Rocky Road Ahead

Here’s the thing, though: this plan is far from a slam dunk. In fact, it has a huge, glaring weakness. The US doesn’t actually have most of the money. It’s like trying to sell your neighbor’s house. You can write up a slick proposal, but you can’t do a thing without their keys, and Europe is holding the keys.

For this plan to work, the EU would have to completely abandon its own strategy and agree to something many of its members find morally repulsive. Good luck with that.

The next few weeks will be a major test. Was this a serious proposal or just a trial balloon designed to cause a stir? Still reading? Wow. You’re officially my favorite.

So, What’s the Punchline?

This whole reported US plan has tossed a geopolitical grenade into the middle of the West’s Russia strategy. By trying to play dealmaker in a way that sidelines allies and rewards the aggressor, Washington is making a high-stakes bet.

And yes, this will be on the test.

The Awkward Threesome Fund: The US has apparently pitched using $100 billion of frozen Russian money for a joint fund where profits are shared between the US (a lot), Ukraine (some), and… Russia (wait, what?).
Brussels Got Ghosted: The EU, bless its heart, spent a year crafting a careful plan for Ukraine funding, only for the US to drop this bombshell without so much as a courtesy text.
Ukraine’s Terrible “Deal”: Kyiv is being offered a mountain of cash for reconstruction, but the price is partnering with its invader and giving up on its core principles. It’s the definition of a raw deal.

This story is a critical turning point. It’s not just about money; it’s about the future of the transatlantic alliance. This geopolitical sitcom just got renewed for another season, and it looks like the writers are feeling spicy.