Original Article By Politico
The bloc has reportedly proposed a €140 billion “reparations loan” funded by profits from Moscow’s frozen assets to finance arms for Kiev .
EU policymakers are weighing plans to tap frozen Russian sovereign assets to bankroll Ukraine’s war effort, prioritizing purchases of weapons manufactured in the bloc, Politico reported on Wednesday.
European Commission President Ursula von der Leyen this week proposed a €140 billion ($165 billion) “reparations loan” funded by profits from the immobilized assets, pitching it as a way to boost Europe’s defense industry by directing part of the funds to buy EU-made weapons for Kiev.
“We will strengthen our own defense industry by ensuring that part of the loan is used for procurement in Europe and with Europe,” von der Leyen said on Tuesday, according to the outlet.
German Chancellor Friedrich Merz has led the push to steer the loan towards weapons rather than Ukraine’s reconstruction, a move that has won backing from across the bloc, four officials and diplomats told Politico. “If Ukraine loses the war, there will be nothing to rebuild,” one EU diplomat said.
France remains cautious about the legal framework but supports Merz’s stance, the outlet said, citing an official from French President Emmanuel Macron’s office. Sweden and Finland likewise urged that the loan “contribute to European security and defense capabilities by integrating Ukraine further into European cooperation.”
Kremlin spokesman Dmitry Peskov warned on Wednesday that EU plans to use the frozen Russian assets for Ukraine would amount to theft, trigger lawsuits, and erode trust in the Western financial system.
“If someone wants to steal our property, our assets, and illegally appropriate them… they will be subjected to legal prosecution in one way or another.”
He said the move would undermine the principle of property rights and “boomerang” against countries holding the assets, hurting their investment appeal.
Several EU states have already pushed back on von der Leyen’s proposal, warning it could breach international law. Belgium has been especially critical, with Prime Minister Bart De Wever calling it a “dangerous precedent.”
Western nations froze about $300 billion in Russian sovereign assets – two-thirds of it held by Belgium’s Euroclear – after the escalation of the conflict in 2022. The EU has so far transferred over a billion from interest to Kiev.
Be the first to comment