EU considers $100 billion “reparations loan” for Ukraine from Russian assets

The European Union is preparing a mechanism that would make it possible to provide Ukraine with up to €130 billion in the form of a so-called reparations loan. Brussels will decide on the final amount after the International Monetary Fund assesses Kiev's financial needs in 2026 and 2027, according to European representatives familiar with the negotiations.

The loan would be covered by cash reserves of around €210 billion in Russian assets frozen in the West after the 2022 invasion. Most of this is held in the Belgian depository Euroclear, where €175 billion in cash is already available.

After repaying last year's €45 billion G7 loan, about €130 billion would remain from this amount.
The Union plans to create a special purpose vehicle (SPV) to which the funds from Euroclear would be transferred in exchange for interest-free bonds issued by the European Commission with guarantees from the EU and, if necessary, the G7.

The use of the assets without their seizure is intended to ensure compliance with legal restrictions and take into account the concerns of member states and the European Central Bank.

(reuters, sab)