European Commission President Ursula von der Leyen on Wednesday proposed a new mechanism to help finance Ukraine’s defence, suggesting that the European Union use cash balances linked to frozen Russian assets as the basis for a “reparations loan.”
Speaking to the European Parliament, von der Leyen stressed that the principal of the assets, part of an estimated $300 billion immobilised in G7 countries, would remain untouched.
Instead, the plan would leverage the financial flows generated by the frozen funds, with the risks shared collectively among EU member states.
“This is Russia’s war. And it is Russia that should pay,” she said. “With the cash balances associated to these Russian assets, we can provide Ukraine with a Reparations Loan. The assets themselves will not be touched. And the risk will have to be carried collectively.”
Von der Leyen did not specify an amount for the proposed loan, but the plan follows the G7’s recent agreement to provide Kyiv with $50 billion in financial support, to be repaid using windfall profits from the frozen Russian holdings.
Under the Commission’s idea, Ukraine would access funds immediately, with repayment contingent on Russia eventually paying reparations for its invasion.
The proposal comes as the EU faces increasing pressure to secure sustainable, long-term financing for Ukraine’s war effort amid waning support in parts of the West and Russia’s continued offensive.
Source: Reuters
Written By Rodney Mbua
