Translated with AI
The European Commission has put forward a proposal to provide Ukraine with a €140 billion "reparations loan" financed by using frozen Russian assets in Western countries, Politico reports.
According to the source, the proposal has already been communicated to EU member states and will be discussed at ambassadorial level on Friday, before being presented to European leaders at the upcoming meeting in Copenhagen. According to the plan, the funds will be allocated in tranches and could be used for both "military cooperation" and budget support for Kyiv.
The idea of using frozen Russian assets as a source of financing is not new: previously, the EU only accepted the proceeds from these funds; an example is using the interest to repay the $50 billion G7 loan to Ukraine.
The EC proposes not confiscating the assets themselves, but rather using their "cash balances" after they have been converted into liquid assets. This approach is intended to circumvent legal obstacles and preserve Russia's legal rights to these funds.
The proposal is causing controversy and concerns among a number of EU countries and financial institutions, who fear possible lawsuits from Russia, a loss of confidence in the European currency, or precedents of similar practices.
If adopted, the proposal could fundamentally change Ukraine's support mechanisms and help strengthen its financial resilience in the face of declining international aid.
