EU's von der Leyen floats new Ukraine reparations loan funded by Russian assets
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The EU could provide Ukraine with a reparations loan funded by cash balances associated with the frozen Russian assets, European Commission President Ursula von der Leyen said on Sept. 10.
The proposed solution would stop short of confiscating Russian sovereign assets but provide additional funding to Ukraine as it faces Moscow's ongoing all-out invasion.
Speaking in her annual State of the Union address in Strasbourg, von der Leyen said that no partner has contributed to Ukraine as much as Europe, which has devoted almost 170 billion euros ($200 billion) since 2022.
"More will be needed," the top EU official said in an address to the European Parliament, adding that "it should not only be European taxpayers who bear the brunt of this. This is Russia’s war. And it is Russia that should pay."
According to von der Leyen, Ukraine would receive the money now but would have to pay it back only once Russia pays for war reparations. She did not name the sum of the proposed loan.
Kyiv's Western allies and other partners immobilized around $300 billion in Russian sovereign assets at the outbreak of the full-scale war, with roughly two-thirds held in Europe.
Brussels has been reluctant to confiscate assets outright due to potential fiscal and legal pitfalls. Instead, it uses the profits generated by the assets to fund Ukraine's defense and reconstruction via the $50 billion G7 loan and a separate EU program.
In recent months, there have been mounting calls for the EU to pursue more radical ways of using the profits for Ukraine's benefit, such as through riskier investments.
Kyiv faces a budget shortfall of at least $8 billion next year as the war continues to take its economic toll and support from the U.S. grows increasingly uncertain.
Ukraine's former Prime Minister Denys Shmyhal said in July that Ukraine would need roughly $1 trillion to restore its economy and rebuild infrastructure damaged in Russian attacks.
