Reparations loan is most effective way to support Ukraine, - von der Leyen
European Commission President Ursula von der Leyen said that among the three options for covering Ukraine's financial needs in 2026–2027, the most promising is a reparations loan mechanism based on frozen Russian assets.
This was reported by Censor.NET with reference to Ukrinform.
"I welcome the European Council's very clear commitment to cover Ukraine's financial needs for the next two years," von der Leyen stressed, adding that assistance will be provided in any case, and the main issue remains the choice of a financing mechanism.
Financing options
The President of the European Commission noted that three options are currently being considered:
- using budgetary space to raise funds on capital markets;
- an intergovernmental agreement under which member states will raise capital independently;
- Reparation loan - that is, the withdrawal of cash balances from frozen Russian assets and their transfer to Ukraine in the form of a loan, which Kyiv will repay only after Russia pays reparations.
"This is the most effective way to support Ukraine's defense and its economy. And the clearest way to make Russia understand that time is not on their side," von der Leyen said.
Russian assets to help Ukraine
- We would like to remind you that earlier, European Commission President Ursula von der Leyen proposed using frozen Russian assets as collateral for providing Ukraine with "reparation loans." Formally, Russian assets subject to sanctions will not be confiscated, but Ukraine will repay such loans only after Russia pays reparations.
- According to various estimates, the European Union's "reparations loan" to Ukraine, secured by Russian assets, could amount to €130-140 billion. Its final size will be determined after the International Monetary Fund assesses Ukraine's financing needs in 2026 and 2027.
- In total, Euroclear currently holds more than €175 billion in cash from frozen Russian assets, which could be used to secure a new loan. But before the EU agrees to grant a reparations loan, it will want to repay the G7 loan to Ukraine of €45 billion ($50 billion) agreed last year, which was to be repaid from the proceeds of frozen Russian assets.
