The European Union is considering issuing a reparations loan to Ukraine of up to €130 billion, using frozen Russian financial assets in the West totaling around €175 billion, Reuters reports.
Source: OBOZREVATEL
The initiative comes from European Commission President Ursula von der Leyen, who proposed creating a financial instrument based on funds frozen after Russia’s 2022 invasion of Ukraine. According to her, Ukraine would repay the loan only after Russia pays reparations under a potential peace agreement.
Most Russian assets in Europe are estimated at approximately €210 billion, of which €175 billion have already matured and could form the basis for the new loan.
Before launching the reparations loan, the previous G7 loan of €45 billion granted to Ukraine last year is planned to be repaid. After that, about €130 billion would remain for the new financial instrument.
Credit risks would be borne collectively by EU countries and possibly some G7 states. The European Commission is developing a mechanism to use the frozen Russian assets without confiscating them, which is a key condition for many EU governments and the ECB.
According to EU Commissioner for Economic Affairs Valdis Dombrovskis, the final size of the loan will be determined after the IMF assesses Ukraine’s financial needs for 2026–2027. Consultations between European and international financial institutions are currently ongoing.
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