Germany leads push for new Ukraine loan using frozen Russian assets
A group of EU countries is reviving plans to use frozen Russian funds for a new loan to Kyiv, aiming to cut EU long-term budget spending.
Quick Look
Germany leads a group of EU countries reviving plans to fund Ukraine with a new loan backed by frozen Russian assets, aiming to reduce EU long-term budget spending despite Belgian legal concerns.
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Why It Matters
EU nations hold billions in frozen Russian assets following sanctions over the invasion of Ukraine. Belgium previously blocked similar asset-backed loan plans over legal risks.
A group of countries led by Germany is reviving the row over using frozen Russian assets to fund Ukraine, pitching a new loan for Kyiv supported by the assets.
Such a loan would replace at least some of the €100 billion planned for Ukraine in the EU’s upcoming long-term budget, in line with Berlin’s aim of cutting the budget, according to four EU diplomats and officials, granted anonymity to speak freely.
Some countries, including Sweden, Poland, the Netherlands and Spain, are pushing to use the €210 billion in Russian frozen assets to finance another Ukraine loan.
However, Belgium, which hosts the bulk of the frozen funds, fears it would bear the brunt of any legal challenge by Russia and shot down a similar plan last year.
One of the diplomats said the new move is seen as preferable to slashing planned spending elsewhere.
“It confronts countries like Belgium with the question whether they want to finance Ukraine support via the [budget], meaning there may be less money for farmers and regions, or whether they free up many billions by using the Russian assets instead,” they said.
Open Questions
- How will Belgium's legal liability concerns be addressed?
- Will other EU member states agree to replace budget spending with asset-backed loans?
