EU 'reparations loan' for Ukraine could reach 130 billion euros from frozen Russian assets
The European Union is considering a "reparations loan" for Ukraine that could amount to up to 130 billion euros, funded by the cash balances of Russian assets immobilized in the West.
24 sept 2025 - 21:54 • 2 min read
The European Union is exploring a "reparations loan" for Ukraine that could reach up to 130 billion euros, leveraging the cash generated from Russian assets frozen after Moscow's invasion in 2022. EU officials close to the discussions indicated that the final sum will be determined after the International Monetary Fund assesses Ukraine's financing needs for 2026 and 2027.
The concept, floated by European Commission President Ursula von der Leyen on September 10, envisions a loan designed to assist Kyiv in funding its war effort. This loan would reportedly be repaid by Ukraine only after it receives reparations from Russia as part of a peace agreement. The financial risk associated with the loan would be borne collectively by European nations and potentially other G7 countries.
Most of the approximately 210 billion euros in Russian assets held within Europe are managed by the Belgian central securities depository, Euroclear. Officials noted that 175 billion euros of these assets have already matured and converted into cash, providing a potential basis for the new loan.
However, before proceeding with the reparations loan, EU officials stated that the bloc would want to repay a 45 billion euro ($50 billion) loan previously agreed upon by the G7 last year. This repayment would leave an estimated 130 billion euros from the available cash balance for the new financial instrument, according to three individuals familiar with the talks.
EU Economy Commissioner Valdis Dombrovskis confirmed that the European Commission is currently working on the specifics, including the modalities, timeline, and volume of the proposed loan. Senior EU finance ministry officials have indicated that detailed agreements are still pending.
The Commission is reportedly developing a mechanism that would allow for the use of these frozen Russian assets without resorting to formal confiscation, a move that has presented a "red line" for several EU governments and the European Central Bank. This reparations lending mechanism is likely to involve a special purpose vehicle. Under this arrangement, frozen Russian funds from Euroclear could be transferred in exchange for zero-coupon bonds issued by the European Commission, backed by guarantees from EU and possibly G7 governments.