Brussels is pressing ahead with a plan to use €170 billion of Russia’s frozen sovereign assets to back “reparation loans” for Ukraine, the Financial Times has reported. The EU faces growing pressure to find additional funding for Kiev as US cuts back its support.
Moscow has condemned the asset freeze and warned that any seizure of its money would amount to “theft.”
Western nations froze an estimated $300 billion in Russian funds after the escalation of the Ukraine conflict in 2022 – some €200 billion of which is held by Brussels-based clearinghouse Euroclear. The funds have accrued billions in interest, and the West has explored ways to use this revenue to finance Ukraine. While refraining from outright seizure, the G7 last year backed a plan to provide Kiev with $50 billion in loans to be repaid using the profits generated by the funds. The EU pledged $21 billion.
European Commission chief Ursula von der Leyen has proposed going further by creating a ‘reparation loans’ mechanism, which she described as urgently needed to finance Kiev.
People familiar with discussions said the plan involves channeling cash balances from Russia’s immobilized assets into EU-issued bonds, with the proceeds transferred to Ukraine in tranches. Brussels argues the system would provide Kiev with immediate support while sidestepping a formal seizure.
Hellbound and Down 