Reduction of the plan for using frozen Russian assets
The European Union has reduced the plan for using frozen Russian assets for loans to Ukraine from $186 billion to approximately $105 billion over the next two years. This decision was driven by concerns from Belgium and the potential use of assets by the administration of former U.S. President Donald Trump. It is noted that Belgium holds the majority of the Russian assets that are under sanctions.
As of now, the EU holds about $245 billion of Russian central bank assets under sanctions, while $55 billion is frozen in the U.S. and other countries. The loan mechanism implies that the EU lends assets to Ukraine with a guarantee from Euroclear. According to the new plan, €90 billion, which will be allocated in tranches over two years, should cover two-thirds of Ukraine's financial gap in 2026-2027.
Conditions for using Russian assets
Belgium has put forward three conditions for using Russian assets:
- Euroclear holds about €190 billion of Russian funds;
- The reparations loan scheme implies the return of funds only after receiving reparations from Russia;
- Reducing the plan to €90 billion leaves over €100 billion as a reserve.
President of the European Commission Ursula von der Leyen stated: 'With today's proposals, we will provide Ukraine with means for self-defense and conducting peace negotiations from a position of strength.'
The reduction of the plan for using frozen Russian assets to loan to Ukraine reflects the EU's cautious approach to financing issues in the context of geopolitical risks. The Belgian conditions and commitments regarding reparations indicate the European Union's intent to provide financial support to Ukraine while leaving a certain reserve for possible changes in the situation. This decision may also affect the EU's future financial strategies for supporting Ukraine amid war and economic instability.