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EU Proposes $227 Billion Reparations Loan to Ukraine Backed by Frozen Russian Assets
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The European Commission has proposed a “Reparations Loan to Ukraine” of about $227 billion, backed by cash balances from immobilized Russian state assets held in the EU, according to The Moscow Times on December 3.
Under the draft regulation, the limited recourse loan would be repaid only once Ukraine receives war reparations from Russia and would draw on cash generated by sanctions on the Central Bank of Russia’s reserves in the EU.
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It would include about $151 billion linked to assets at the Euroclear depository in Belgium, along with additional funds frozen in other member states.
The Commission plans to channel approximately $103 billion into macro-financial and budget support, including $49 billion to help repay G7-era loans and about $54 billion for broader budget needs. Additionally, approximately $124 billion would support Ukraine’s defense industrial capacity and its integration with Europe’s defense technological and industrial base.
The proposal includes guarantees from member states, an EU-level liquidity mechanism and, as a last resort, the option to issue Union debt.
It also sets temporary measures to block the return of immobilized Russian assets and to bar enforcement in the EU of foreign court rulings involving those assets, with the package to be approved by qualified majority voting to avoid a potential veto from Hungary.
Earlier, it was reported that the European Commission was developing up to $180 billion in “reparations loans” for Ukraine, financed by using frozen Russian central bank cash held at Euroclear to issue EU bonds, with proceeds transferred to Kyiv and repayment contingent on future Russian reparations, while the risks are shared among EU member states.
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