The European Union is considering a plan to provide Ukraine with a new loan totaling €140 billion, using frozen assets of the Russian central bank. The proposal, which is currently being discussed among EU ambassadors, aims to conclude a loan agreement by the end of the year and start disbursing funds to Ukraine in 2026. The frozen assets, valued at approximately €200 billion, have been immobilized in the EU since Russia’s invasion of Ukraine.
The plan involves redirecting funds generated from these frozen assets, held at Euroclear, to the EU, which would then issue loans to Ukraine. The repayment terms are conditional, meaning Ukraine would only need to repay the loan if Moscow agrees to finance reconstruction and reparations or if EU sanctions against Russia are lifted. This approach aims to ensure the support doesn’t increase Ukraine’s debt and isn’t considered a direct seizure of Russian assets.
The European Commission is working on a “reparation loan” proposal, which would be guaranteed by member states. However, not all EU member states are in agreement, with Belgium, where most of the Russian assets are located, resisting the move. Belgian Prime Minister Bart De Wever has expressed concerns, stating that the country won’t take on the risks. Despite these challenges, the EU hopes to finalize the plan, which would require a qualified majority of member states to implement.
The loan plan is part of a broader effort to support Ukraine amid ongoing conflict with Russia. The EU has previously agreed to provide Ukraine with €45 billion in loans through the G7 initiative, which uses profits generated from Russian assets. The new proposal would provide additional funding, helping to sustain Ukraine’s economy and support its recovery efforts.
