The European Union plans to use €140 billion in frozen Russian state assets to finance a large loan to Ukraine, but the European Commission wants more.
According to a document seen by Politico, most of the frozen assets are held in the Belgian financial depository Euroclear, while an additional €25 billion is in private bank accounts across the EU.
The EU executive wants to consider using those funds to issue loans to Kiev.
“It should be considered whether the Reparations Loan initiative could be extended to other frozen assets within the EU,” the document, which the Commission distributed to European capitals ahead of a meeting of ambassadors on Friday, said.
“The legal feasibility of extending the Reparations Loan’s access to such assets has not yet been assessed in detail. Such an assessment must precede a decision on the next steps,” it added.
The document contains a “design principle” for a Reparations Loan initiative for Ukraine, which will be discussed at the next EU summit in Brussels.
EU leaders are expected to hold a broad discussion on the initiative and invite the Commission to present a proposal for a loan.
EU officials expect the draft law to arrive quickly and serve as a basis for further discussions on the financial model needed for implementation.
Finance ministers will discuss the draft law at their next meeting in November. Other principles include national guarantees for the loan, a key demand of Belgium, which fears that Moscow could send a legal team to recover the sanctioned funds.
“A robust guarantee and liquidity structure should be established so that the EU can always meet its obligations to Euroclear,” the document continues.
“To this end, it is proposed to build a system of bilateral guarantees by member states towards the Union. These guarantees would ensure access to the necessary liquidity when needed to meet the guarantee call, i.e. allow for immediate disbursement,” it adds.
The next seven-year EU budget, starting in 2028, would take over national guarantees with adequate coverage under the budgetary reserve, a financial backstop that allows Brussels to meet its obligations.
After the loan is issued, the funds would be directed towards the development of Ukraine’s defense technological and industrial base and its integration into the European defense industry, as well as supporting Ukraine’s national budget, subject to appropriate conditions.
