EU proposes using frozen Russian assets to finance Ukraine via a new reparations loan
The European Union has stepped up its efforts to explore innovative financial tools to support Ukraine amid its ongoing conflict with Russia.
According to internal sources, the European Commission has devised a plan to utilize frozen Russian assets to fund a substantial loan package totaling 140 billion euros.
This initiative, under detailed discussion prior to the upcoming EU diplomatic meeting in Belgium, aims to provide Ukraine with much-needed financial support during the war in the form of an interest-free loan on favorable terms.
A key condition is that Ukraine will repay the amount after the conclusion of hostilities and following reparations payments, while European authorities can recover the frozen assets held by the Belgian financial institution Euroclear.
The plan stipulates that the loan will be disbursed in installments, intended for strengthening defense capabilities, covering essential government expenditures, and stabilizing the Ukrainian economy amidst ongoing hostilities.
Furthermore, the European Commission suggests changing the decision-making process for sanctions — shifting from unanimous approval to a qualified majority vote, to prevent blockages by individual countries, notably Hungary.
German Chancellor Friedrich Merz supported this idea, emphasizing that the funds should be allocated solely for military aid.
European Council President Emmanuel Macron underscored that confiscation of Russian assets during the war is impossible under international law, hence the proposed mechanisms enable Ukraine to access necessary funding immediately, with reparations and compensation paid by Russia after the conflict ends.
This approach exemplifies modern innovative solutions in international financial policy, transforming frozen assets into a tool for regional security and stability, and reflecting Europe’s united support for Ukraine’s sovereignty and future.