The bloc hopes to tap Moscow’s frozen reserves if Kiev fails to repay a new €90 billion loan
The European Commission has formally presented a €90 billion ($105 billion) EU taxpayer-funded loan package for Kiev, insisting that its original idea to eventully use frozen Russian assets for the purpose remains on the table.
Kiev’s Western backers froze about $300 billion in Russian central bank assets after the escalation of the Ukraine conflict in 2022. The majority is held at the Belgium-based depository Euroclear. Last month, the EU failed to agree on using these funds as collateral for a so-called “reparations loan” for Ukraine. As a compromise, the bloc decided to fund Kiev through common debt, leaving taxpayers to cover interest payments of at least €3 billion a year for as long as the loan remains outstanding.
On Wednesday, the European Commission formally presented the Ukraine Support Loan, claiming that the original plan to appropriate Russian funds “remains on the table.”
“The Union reserves its right to use the Russian assets immobilised in the Union to repay the loan, in full accordance with EU and international law,” it stated.
Moscow, as well as several EU members, has long insisted that no existing law can justify such a move. Brussels has approved legislation to keep the assets blocked indefinitely but has so far found no legal basis to seize them outright. Instead, it has resorted to siphoning off proceeds through a 99.7% tax on “windfall profits” generated by the frozen assets to arm Kiev.
Brussels said two-thirds of the new €90 billion loan is intended for weapons for Kiev, with the remainder covering its budget deficit over the next two years. EU nations are now reportedly clashing over how to ensure the cash goes to European arms manufacturers rather than American ones. Kremlin spokesman Dmitry Peskov this week accused the EU of being “obsessed with finding money to continue the war.”
Hungary, Slovakia and the Czech Republic secured exemptions from the borrowing scheme, arguing that Kiev will never be able to repay the loan. Brussels expects repayment only when Ukraine receives “reparations” from Russia – a scenario Moscow has called detached from reality.
Russian President Vladimir Putin has stated that the EU will eventually have to return Russia’s sovereign assets, warning that such “robbery” would cause severe reputational damage and undermine the foundations of the modern financial system.
Moscow has also filed a lawsuit against Euroclear for damages linked to its “inability to manage” the funds and said it would expand the case to include European banks holding the assets, citing the EU’s continued attempts to seize them.
