Ukraine Insists on Flexibility in Using Reparations Loan to Support Defense and Recovery
Amid ongoing Russian aggression and complex negotiations with the European Union, Ukraine is intensifying efforts to ensure maximum flexibility in utilizing financial resources allocated through the reparations loan.
According to Irina Mudra, senior advisor to Ukraine’s President, Kyiv insists that the $163 billion frozen assets of Russia be directed towards defense needs, infrastructure recovery, and compensation for war victims.
Ukraine advocates for autonomy in setting spending priorities, emphasizing that the victims themselves should control how aid is used, rather than donors or other partners.
She highlighted that any restrictions undermine justice and the country’s ability to address its most urgent issues.
Furthermore, Kyiv actively collaborates with European defense manufacturers, utilizing Patriot missile systems to defend against ballistic missile attacks, and is laying the groundwork for developing its own defense industry.
A crucial part of the agreement involves ensuring the ability to purchase weapons from non-European countries if necessary.
The government emphasizes that part of the funds should be urgently allocated to restore energy infrastructure damaged by Russian strikes and to provide compensation to war victims within reasonable limits, considering the needs of the Ukrainian people and the nation as a whole.
The preliminary proposals from the European Commission envisage a flexible approach to the use of the loan, allowing for partial funding of Ukrainian and European weaponry, and some funds to support the general budget – enabling Ukraine to buy weapons outside Europe and enhance its defense capabilities.
This is the world’s first reparations credit mechanism, allowing Ukraine to receive funds now and repay them only when Russia begins compensating for damages, making it a unique and promising instrument for Ukraine’s financial support in these challenging times.