Ukraine rejects European conditions for loan from Russian assets

Ukraine rejects the EU's proposal to tie a $163 billion loan, which would be secured by frozen Russian assets, primarily to the purchase of weapons manufactured in Europe.

Kyiv emphasizes that it must be able to decide independently how the funds are used—the money should also be used for the reconstruction of war-torn areas, compensation for victims, and the purchase of non-European weapons, especially if European production capacities are insufficient.

According to legal advisor Iryna Mudra, the priorities should be “decided by the victim, not the donors.” The European Commission has now proposed a compromise: most of the funds would be used for European and Ukrainian weapons, with the rest going toward flexible budget support.

The proposal is supported by EU heads of state and government, but faces legal hurdles – state assets cannot be confiscated, which is why it would be a loan that Ukraine would only have to repay with future reparations.

The Kremlin has described the plan as theft. Kyiv, meanwhile, warns that without the payment by the end of 2026, it faces a fiscal abyss – the budget is short $18 billion.

(reuters, lup)